Projects

We propose a random quasi-linear utility model (RQUM) where stochastic choices maximize quasi-linear utility functions that are randomly drawn via some probability distribution π. Utility ties are allowed and broken by a convenient lexicographic rule. Our main result characterizes RQUM and identifies the probability measure π uniquely and explicitly in terms of stochastic choice data. McFadden’s (1973) additive random utility model is obtained as a special case where ties have probability zero. Another distinct case captures finite populations and derives π with a finite support. Our main axioms constrain aggregate effects of cost variations on choice probabilities. In particular, context and reference dependence are prohibited. We also characterize RQUM through a suitable version of McFadden and Richter’s (1990) axiom of revealed stochastic preferences (ARSP). This approach extends to incomplete datasets.

In this paper, I refine the random utility model (RUM) of Block and Marschak (1959) to represent stochastic choice data with quasi-linear types. In my framework, choices are observed across pairs of goods and money. The random quasi-linear utility function is identified uniquely in my model. This identification implies a unique social welfare aggregator that is consistent with the Pareto efficiency criteria. In general, the uniqueness of the quasi-linear tie-breaking rule is not guaranteed, but it can be obtained in a special case where the tie-breaking is uniform. I also characterize a special case where the set of possible types is binary.

To delegate future choices, planners can influence doers in various ways. In the intrapersonal case, a planner can motivate her future self by commitments, promises, deadlines etc. In the interpersonal case, doers can be selected and/or persuaded to change their beliefs.

This article models litigation in signaling games with an imperfectly informed victim and a perfectly informed defendant. I compare a two-agent game and a three-agent extension where the victim can hire a lawyer who is perfectly informed but who pursues a selfish objective in his advice.