Context-Dependent Heterogeneous Preferences: A Comment on Barseghyan and Molinari (2023)

Abstract

Abstract–Barseghyan and Molinari give sufficient conditions for semi-nonparametric point identification of parameters of interest in a mixture model of decision-making under risk, allowing for unobserved heterogeneity in utility functions and limited consideration. A key assumption in the model is that the heterogeneity of risk preferences is unobservable but context-independent. In this comment, we build on their insights and present identification results in a setting where the risk preferences are allowed to be context-dependent.KEYWORDS: Discrete choiceRandom limited considerationRandom utilitySemi-nonparametric identification AcknowledgmentsWe thank Francesca Molinari and the participants at the 2023 ASSA meetings (JBES Session: Risk Preference Types, Limited Consideration, and Welfare) for comments.Disclosure StatementThe authors report there are no competing interests to declare.Additional informationFundingCattaneo gratefully acknowledges financial support from the National Science Foundation through grants SES-1947805 and SES-2241575.