A Model of Probabilistic Choice Satisfying First-Order Stochastic Dominance

作者：Blavatskyy Pavlo R^*

来源：Management Science, 2011, 57(3): 542-548.

DOI：10.1287/mnsc.1100.1285

• probabilistic choice
• first-order stochastic dominance
• random utility
• strong utility

This paper presents a new model of probabilistic binary choice under risk. In this model, a decision maker always satisfies first-order stochastic dominance. If neither lottery stochastically dominates the other alternative, a decision maker chooses in a probabilistic manner. The proposed model is derived from four standard axioms (completeness, weak stochastic transitivity, continuity, and common consequence independence) and two relatively new axioms. The proposed model provides a better fit to experimental data than do existing models. The baseline model can be extended to other domains such as modeling variable consumer demand.

• 出版日期2011-3