Taboo trade-off aversion: a discrete choice model and empirical analysis

Citation

Chorus C, Pudane B, Mouter N & Campbell D (2018) Taboo trade-off aversion: a discrete choice model and empirical analysis. Journal of Choice Modelling, 27, pp. 37-49. https://doi.org/10.1016/j.jocm.2017.09.002

Abstract
An influential body of literature in moral psychology suggests that decision makers consider trade-offs morally problematic, or taboo, when the attributes traded off against each other belong to different ‘spheres’, such as friendship versus market transactions. This study is the first to model and empirically explore taboo trade-off aversion in a discrete choice context. To capture possible taboo trade-off aversion, we propose to extend the conventional linear in parameters logit model by including penalties for taboo trade-offs. Using this model, we then explore the presence (and size) of taboo trade-off aversion in a data set specifically collected for this purpose. Results, based on estimation of a variety of (Mixed) Logit models with and without taboo trade-off penalties, suggest that there is indeed a significant and sizeable taboo trade-off aversion underlying choice behaviour of respondents.

Journal
Journal of Choice Modelling: Volume 27

People

Professor Danny Campbell

Professor, Economics