- Buchanan 1930
Title: Multinomial logit processes and preference discovery: inside and outside the blackbox
We provide both an *axiomatic* and a *neuropsychological* characterization of the dependence of choice probabilities on deadlines in the softmax form, with time independent utility function and time dependent accuracy parameter.
The softmax model (also known as Multinomial Logit Model or Power Luce Model) is the most widely used model of preference discovery in all fields of decision making, from Quantal Response Equilibria to Discrete Choice Analysis, from Psychophysics to Neuroscience. Our axiomatic characterization of softmax permits to empirically test its descriptive validity and to better understand its conceptual underpinnings as a theory of agents rationality. Our neuropsychological foundation provides a computational model that may explain softmax emergence in human multialternative choice behavior and that naturally extends the dominant Diffusion Model paradigm of binary choice.
Fabio Maccheroni is a Professor at Department of Decision Sciences at Università Bocconi.