Choice Set Confounding in Discrete Choice
- URL: http://arxiv.org/abs/2105.07959v1
- Date: Mon, 17 May 2021 15:39:02 GMT
- Title: Choice Set Confounding in Discrete Choice
- Authors: Kiran Tomlinson, Johan Ugander, and Austin R. Benson
- Abstract summary: Existing learning methods overlook how choice set assignment affects the data.
We adapt methods from causal inference to the discrete choice setting.
We show that accounting for choice set confounding makes choices observed in hotel booking more consistent with rational utility-maximization.
- Score: 29.25891648918572
- License: http://arxiv.org/licenses/nonexclusive-distrib/1.0/
- Abstract: Standard methods in preference learning involve estimating the parameters of
discrete choice models from data of selections (choices) made by individuals
from a discrete set of alternatives (the choice set). While there are many
models for individual preferences, existing learning methods overlook how
choice set assignment affects the data. Often, the choice set itself is
influenced by an individual's preferences; for instance, a consumer choosing a
product from an online retailer is often presented with options from a
recommender system that depend on information about the consumer's preferences.
Ignoring these assignment mechanisms can mislead choice models into making
biased estimates of preferences, a phenomenon that we call choice set
confounding; we demonstrate the presence of such confounding in widely-used
choice datasets.
To address this issue, we adapt methods from causal inference to the discrete
choice setting. We use covariates of the chooser for inverse probability
weighting and/or regression controls, accurately recovering individual
preferences in the presence of choice set confounding under certain
assumptions. When such covariates are unavailable or inadequate, we develop
methods that take advantage of structured choice set assignment to improve
prediction. We demonstrate the effectiveness of our methods on real-world
choice data, showing, for example, that accounting for choice set confounding
makes choices observed in hotel booking and commute transportation more
consistent with rational utility-maximization.
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