Discrete choice models with multiplicative error terms

  title={Discrete choice models with multiplicative error terms},
  author={Mogens Fosgerau and Michel Bierlaire},
We propose a multiplicative speci cation of a discrete choice model that renders choice probabilities independent of the scale of the utility. The scale can thus be random with unspeci ed distribution. The model mostly outperforms the classical additive formulation over a range of stated choice data sets. In some cases, the improvement in likelihood is greater than that obtained from adding observed and unobserved heterogeneity to the additive speci cation. The multiplicative speci cation makes… CONTINUE READING

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