Newman, J. P

Pieces of Choices: Alternative Allocations in Network-GEV Models

Speaker: Newman Jeffrey

Workshop on Discrete Choice Models, EPFL

August 26, 2008

Generalized extreme value (GEV) models provide a convenient way to model choice behavior that is consistent with utility maximization theory, but the development of specific new models within the GEV family has been slow, due to the difficulty of ensuring new formulations comply with all the GEV rules. The network GEV structure provides a tool to quickly generate new models in the GEV family, without the burden of complex analysis of the new model to ensure its properties. However, such models contain an unwieldy number of parameters, and require numerous restrictions to allow for model identification. This paper will examine an upside-down logit methodology for imposing normalization restrictions on allocations, which can also incorporate disaggregate data into the structure of the correlation among alternatives. We will also explore a “all zero nests” model, where the logsum parameters of every nest are zero, and the levels of correlation are entirely controlled by the allocation parameters.