Single-Crossing Random Utility Models

Jose Apesteguia, Miguel A. Ballester, Jay Lu

Econometrica · 2017 · Volume 85 · Issue 2

Abstract

We propose a novel model of stochastic choice: the single-crossing random utility model (SCRUM). This is a random utility model in which the collection of preferences satisfies the single-crossing property. We offer a characterization of SCRUMs based on two easy-to-check properties: the classic Monotonicity property and a novel condition, Centrality. The identified collection of preferences and associated probabilities is unique. We show that SCRUMs nest both single-peaked and single-dipped random utility models and establish a stochastic monotone comparative result for the case of SCRUMs.

Keywords

Stochastic choice, single-crossing property, single-peaked preferences, single-dipped preferences, random utility models, monotone comparative statics

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