Econometrica: May, 2016, Volume 84, Issue 3
Menu-Dependent Stochastic Feasibility
Richard L. Brady, John Rehbeck
We examine the role of stochastic feasibility in consumer choice using a (RCCSR) and uniquely characterize the model from conditions on stochastic choice data. Feasibility is modeled to permit correlation in availability of alternatives. This provides a natural way to examine substitutability/complementarity. We show that an RCCSR generalizes the of [Manzini and Mariotti, 2014]. We then relate this model to existing literature. In particular, an RCCSR is not a random utility model.
Supplement to "Menu-Dependent Stochastic Feasibility"
Appendix B contains a discussion on an alternative form of conditioning for feasible set probabilities. Appendix C replaces IFO with a condition which restricts the support of π to sets of at most two elements. Appendix D examines differences between the regular Perception Adjusted Luce Model and an RCCSR.