Theoretical Economics 17 (2022), 651–686

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### Indifference, indecisiveness, experimentation and stochastic choice

*Efe A. Ok, Gerelt Tserenjigmid*

#### Abstract

Among the reasons behind the choice behavior
of an individual taking a stochastic form are her potential indifference or
indecisiveness between certain alternatives, and/or her willingness to
experiment in the sense of occasionally deviating from choosing a best
alternative in order to give a try to other options. We introduce methods of
identifying if, and when, a stochastic choice model may be thought of as
arising due to any one of these three reasons. Each of these methods
furnishes a natural way of making deterministic welfare comparisons within
any model that is rationalized as such.
In turn, we apply these methods, and characterize the associated welfare
orderings, in the case of several well-known classes of stochastic choice
models.

Keywords: Stochastic choice, indifference, incomplete preferences, experimentation, the general Luce model, random utility, additive perturbed utility, individual welfare

JEL classification: D01, D11, D81, D91

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