We analyze the use of discrete choice models for the estimation of risk aversion and show a fundamental flaw in the standard random utility model which is commonly used in the literature. Specifically, we find that given two gambles, the probability of selecting the riskier gamble may be larger...

Discrete choice methods are often used for the estimation of time preferences. We show that these methods have pervasive problems when based on random utility models, for which cases our results establish that the probability of selecting a later option over an earlier one may be greater for...

Leniency clauses, offering cartelists legal immunity if they blow the whistle on each other, is a recent anti-trust innovation. The authorities wish to thwart cartels and promote competition. This effect is not evident, however; whistle-blowing may enforce trust and collusion by providing a tool...

There is extensive field and experimental evidence in a wide variety of environments showing that behavior depends on a reference point. This paper provides an axiomatic characterization for such behavior. Our approach is dual, we study choice behavior and preference relations. We proceed by...

We introduce a generalized theoretical approach to study imitation models and subject the models to rigorous experimental testing. In our theoretical analysis we find that the different predictions of previous imitation models are due to different informational assumptions, not to different...

Kalai, Rubinstein, and Spiegler (2002) propose the rationalization of choice functions that violate the “independence of irrelevant alternatives” axiom through a collection (book) of linear orders (rationales). In this paper we present an algorithm which, for any choice function, gives (i)...