Risk, Uncertainty and Discrete Choice Models.

A. de Palma*, M. Ben-Akiva, D. Brownstone, T. Magnac, D. McFadden, P. Moffatt, N. Picard, K. Train, P.P. Wakker, J. Walker

*Corresponding author for this work

Research output: Contribution to journalArticleAcademicpeer-review

67 Citations (Web of Science)


This paper examines the cross-fertilizations of random utility models with the study of decision making under risk and uncertainty. We start with a description of the expected utility (eu) theory and then consider deviations from the standard eu frameworks, involving the allais paradox and the ellsberg paradox, inter alia. We then discuss how the resulting non-eu framework can be modeled and estimated within the framework of discrete choices in static and dynamic contexts. Our objectives in addressing risk and ambiguity in individual choice contexts are to understand the decision choice process and to use behavioral information for prediction, prescription, and policy analysis.
Original languageEnglish
Pages (from-to)269-285
Number of pages17
JournalMarketing Letters
Publication statusPublished - 1 Jan 2008

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