The profile structure for Luce’s choice axiom.pdfVIP

ARTICLE IN PRESS Journal of Mathematical Psychology 49 (2005) 226–253 /locate/jmp The profile structure for Luce’s choice axiom Donald G. Saari Department of Economics, University of California, 3151 Social Science Plaza, Irvine CA 92697-5100, USA Received 30 May 2003; received in revised form 17 July 2004 Abstract A geometric approach is introduced to explain phenomena that can arise with Luce’s choice axiom; e.g., differences occur when determining the likelihood of a ranking by starting with the ‘‘best-first,’’ or ‘‘worst-first’’ alternative. As shown, the problem is caused by the way we compute pairwise probabilities: it forces ‘‘best-first’’ and ‘‘worst-first’’ computations to use different information from a profile. Thus agreement holds only should the different information agree: this happens only with complete indifference. An alternative ‘‘best-first’’ and ‘‘worst-first’’ comparison, which always holds, is developed. Ways to increase the applicability of the choice axiom are introduced; e.g., profiles admitted by Luce’s formulation for ten alternatives have nine degrees of freedom; the approach described here allows millions of degrees of freedom. New ways to compute probabilities, which combine ‘‘best-first’’ and ‘‘worst-first’’ computations, are given: their properties are identified with a profile decomposition. A new way to compute pairwise probabilities, which eliminates all profile restrictions and problems associated with the choice axiom, is introduced; e.g., ‘‘best-first’’ and ‘‘worst-first’’ computations now agree.