Department of Economics and Business - Universitat Pompeu Fabra

Title:: Stochastic representatitve agent
Authors:: Jose Apesteguia and Miguel A. Ballester
Date:: September 2016
Abstract:: Consider the aggregation of a collection of individual stochastic behaviors that fit a given stochastic choice model. We say that such a model has a representative agent if their aggregate stochastic behaviour also fits the model. We show that the Luce model and several prominent extensions thereof do not have a representative agent. On the positive side, we show that the random utility model and several domain-specific restrictions thereof do have a representative agent.
Keywords:: Representative agent; Stochastic choice.
JEL codes:: D0; D7; E1.
Area of Research:: Behavioral and Experimental Economics / Microeconomics

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