Home > Research > Publications & Outputs > Time will tell: Recovering preferences when cho...

Links

Text available via DOI:

View graph of relations

Time will tell: Recovering preferences when choices are noisy

Research output: Contribution to Journal/MagazineJournal articlepeer-review

Published
<mark>Journal publication date</mark>1/06/2021
<mark>Journal</mark>Journal of Political Economy
Issue number6
Volume129
Number of pages50
Pages (from-to)1828-1877
Publication StatusPublished
Early online date28/04/21
<mark>Original language</mark>English

Abstract

When choice is stochastic, revealed preference analysis often relies on random utility models. However, it is impossible to infer preferences without assumptions on the distribution of utility noise. We show that this difficulty can be overcome by using response time data. A simple condition on response time distributions ensures that choices reveal preferences without distributional assumptions. Standard models from economics and psychology generate data fulfilling this condition. Sharper results are obtained under symmetric or Fechnerian noise, where response times allow uncovering preferences or predicting choice probabilities out of sample. Application of our tools is simple and generates remarkable prediction accuracy.