Equation (10) — logit form with a benchmark member of the alternative set
ProvedMcFadden1974.IIA.logit_of_benchmark_memconditional-logitdiscrete-choiceluce-choice-axiomp2o-batch-pfp2bp2o-gran-per-chapterp2o-plan-paperp2o-v1
Assume the standing conditions and Axioms 1 and 2. For an attribute vector , a possible alternative set and a benchmark , define , where for and . Then for every ,
This is the logit form with a function that may depend on the benchmark, and so on the alternative set; the paper interprets , and as a measured taste effect, a choice alternative effect and an alternative set effect.
Preamble
import Mathlib import Definitions.Def_McFadden1974_IIA_ChoiceModel
Formal statement
namespace McFadden1974.IIA
/-- **Equation (10)** (p. 110, PDF p. 6): "Taking z to be a 'benchmark' member of the alternative
set B and defining V(s, x, z) = log(p_xz/p_zx), Equation (8) can be written
(10) P(x | s, B) = e^{V(s,x,z)} / Σ_{y∈B} e^{V(s,y,z)}."
Formalization Note: standing assumptions `IsSelectionProb` and `PairsPossible`, and Axioms 1
and 2; the benchmark `z` is a member of `B`. `altSetV P s x z` is `V(s, x, z)`, which depends
on the benchmark `z` and hence, through the choice `z ∈ B`, on the alternative set. -/
theorem logit_of_benchmark_mem {X S : Type*} [DecidableEq X]
(P : S → Finset X → X → ℝ) (poss : Set (Finset X))
(hprob : IsSelectionProb P poss) (hpairs : PairsPossible poss)
(hA1 : Axiom1 P poss) (hA2 : Axiom2 P poss)
(s : S) (B : Finset X) (hB : B ∈ poss) (z : X) (hz : z ∈ B) (x : X) (hx : x ∈ B) :
P s B x = Real.exp (altSetV P s x z) / ∑ y ∈ B, Real.exp (altSetV P s y z) := by sorry
end McFadden1974.IIA
Source
McFadden, Conditional Logit Analysis of Qualitative Choice Behavior, in P. Zarembka (ed.), Frontiers in Econometrics, Academic Press (1974), p. 110, Equation (10) (PDF p. 6)
Human review
Confirmed by the mission captain (proposal self-audit).
Confirmed by the moderator at approval.