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Anna Conte and John Hey

Rehabilitating the Random Utility Model. A comment on Apesteguia and Ballester (2018)

Abstract

The Random Utility Model (RUM) and the Random Preference Model (RPM) are important tools in the economist’s toolbox when estimating preference functionals from experimental data. In an important recent paper in this journal, Apesteguia and Ballester (2018) cautioned decision theorists against using the RUM, suggesting that the RPM may be preferable. This short note comments on this paper, and concludes that RUM does not suffer from the drawbacks suggested in their paper.

 The Comment (PDF , 1,863kb) can be found here.

The Matlab codes for simulation (zip , 8kb) are here.