The Focal Luce Model

B-Tier
Journal: American Economic Journal: Microeconomics
Year: 2022
Volume: 14
Issue: 3
Pages: 378-413

Authors (2)

Matthew Kovach (Purdue University) Gerelt Tserenjigmid (not in RePEc)

Score contribution per author:

1.005 = (α=2.01 / 2 authors) × 1.0x B-tier

α: calibrated so average coauthorship-adjusted count equals average raw count

Abstract

We introduce the Focal Luce Model (FLM), a random choice model that generalizes Luce's (1959) model (multinomial logit) to account for menu-dependent focality of alternatives. In the FLM, focal alternatives are relatively more likely to be chosen even after taking utilities into account. The FLM captures a variety of bounded rationality models while behaviorally distinguishing between what is focal and the magnitude of the bias from focality. We show how to identify utilities, focal sets, and bias terms from choice frequencies; behaviorally characterize the FLM by weakening Luce's (1959) independence from irrelevant alternatives; and apply our model to choice data and games.

Technical Details

RePEc Handle
repec:aea:aejmic:v:14:y:2022:i:3:p:378-413
Journal Field
General
Author Count
2
Added to Database
2026-01-25