A note on the invariance of the distribution of the maximum

Publisher's full text
Mogens Fosgerau
Per Olov Lindberg
Lars-Göran Mattsson
Jörgen Weibull

Many models in economics involve discrete choices where a decision-maker selects the best alternative from a finite set. Viewing the array of values of the alternatives as a random vector, the decision-maker draws a realization and chooses the alternative with the highest value. The analyst is then interested in the choice probabilities and in the value of the best alternative. The random vector has the invariance property if the distribution of the value of a specific alternative, conditional on that alternative being chosen, is the same, regardless of which alternative is considered. This note shows that the invariance property holds if and only if the marginal distributions of the random components are positive powers of each other, even when allowing for quite general statistical dependence among the random components. We illustrate the analytical power of the invariance property by way of examples.

MEET US


5-6
Dec

Vision Zero for Sustainable Road Safety in the Baltic Sea Region

The conference Vision Zero for Sustainable Road Safety in the Baltic Sea Region is held i Vilnius, Lithuania. VTI is part of the organisation committé and also one of the speakers.

LATEST NEWS


2018-10-05

Users contribute to the development of train simulators

Apart from advanced driving simulators, VTI has developed several variations of train simulators which are used for training, education and research. In recent years, interest has increased drastically among major actors in the railway sector, and VTI has...


2018-10-03

VR study to contribute to a better working environment for bus drivers

A study where bus drivers test autonomous driving in a VR environment may contribute to a better working environment with reduced stress on the driver and safer driving.


2018-10-02

Non-native plant species spread via transport systems

Researchers at VTI have compiled a report on non-native invasive plant species in Sweden and how they spread via transport systems.


2018-09-20

EU-project VIRTUAL: improving road safety with virtual crash tests

Crash tests are used to improve safety on roads. Therefore the EU now funds a research project to develop virtual methods of crash testing. VTI coordinates the project, called VIRTUAL. The project now invites experts interested in Human Body Modeling to join...


2018-08-28

EU project protects cyclists and pedestrians

According to the World Health Organisation, more than one quarter of road traffic fatalities in 2010 were pedestrians and cyclists. Every year, about 335,000 unprotected road users die because of traffic accidents, which shows the scale of the problem. The EU...


2018-08-21

Swedish organisations in EU project on traffic safety and crash testing

Crash safety testing is one of the tools used to improve safety on roads. The EU is therefore funding a research project that started recently to develop virtual methods of crash testing. The long-term goal is to supplement the physical evaluation of crash...