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Individual choices are often inconsistent with economic theories, which has motivated a variety of ways to measure how far choices are from a given theory. Recent work has investigated the correlation between measures of rationality and observable information such as education or income. This...
Persistent link: https://www.econbiz.de/10012869086
Persistent link: https://www.econbiz.de/10012620965
This paper presents a cardinal measure of choice consistency for perturbed utility models. The measure of choice consistency is built on additive errors to the model. The additive errors are meaningful since the perturbed utility model is cardinal and utility differences are meaningful. We...
Persistent link: https://www.econbiz.de/10014237253