Single-Crossing Random Utility Models

Mar 2017

Econometrica, 85(2):661-674

DOI: https://doi.org/10.3982/ECTA14230

Jose Apesteguia, Miguel A. Ballester, Jay Lu

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.