We consider random choice rules that, by satisfying a weak form of Luce's choice axiom, embody a form probabilistic rationality. We show that for this important class of stochastic choices, the law of demand for normal goods-arguably the main result of traditional consumer theory-continues to hold on average when strictly dominated alternatives are dismissed.

Law of demand and stochastic choice

Cerreia Vioglio, Simone;Maccheroni, Fabio
;
Marinacci, Massimo;Rustichini, Aldo
2022-01-01

Abstract

We consider random choice rules that, by satisfying a weak form of Luce's choice axiom, embody a form probabilistic rationality. We show that for this important class of stochastic choices, the law of demand for normal goods-arguably the main result of traditional consumer theory-continues to hold on average when strictly dominated alternatives are dismissed.
2021
Cerreia Vioglio, Simone; Maccheroni, Fabio; Marinacci, Massimo; Rustichini, Aldo
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Utilizza questo identificativo per citare o creare un link a questo documento: https://hdl.handle.net/11565/4052145
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