Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/309067 
Year of Publication: 
2024
Citation: 
[Journal:] Economic Theory Bulletin [ISSN:] 2196-1093 [Volume:] 12 [Issue:] 2 [Publisher:] Springer [Place:] Berlin [Year:] 2024 [Pages:] 199-209
Publisher: 
Springer, Berlin
Abstract: 
We study the relationship between imperfect discrimination, similarity, and stochastic transitivity in generalized versions of Perturbed Utility (Fudenberg et al. in Econometrica 83(6):2371–2409, 2015) and Fechnerian models (Debreu in Econometrica 26(3):440–444, 1958). We show that these models are equivalent and that, within them, the properties of a similarity function can characterize all notions of stochastic transitivity (as Weak, Moderate, and Strong). Specifically, He and Natenzon (Am Econ Rev Insights 6(2):176–195, 2024) have recently shown that choice probabilities are moderately transitive if and only if the similarity function is a metric. We provide a counterpoint and show that unless choice probabilities are strongly transitive, the similarity function can violate the triangle inequality.
Subjects: 
Stochastic choice
Imperfect discrimination
Perturbed utility & Fechnerian models
Similarity hypothesis
JEL: 
D00
D9
Persistent Identifier of the first edition: 
Creative Commons License: 
cc-by Logo
Document Type: 
Article
Document Version: 
Published Version

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