A Measure of Behavioral Heterogeneity

• Authors: Miguel Ángel Ballester and Jose Apesteguia.
• BSE Working Paper: 1373 | December 22
• Keywords: heterogeneity , intra-personal , inter-personal , axiomatic foundations
• JEL codes: D01
• heterogeneity
• intra-personal
• inter-personal
• axiomatic foundations

In this paper we propose a novel way to measure behavioral heterogeneity in a population of stochastic individuals. Our measure is choice-based; it evaluates the probability that, over a sampled menu, the sampled choices of two sampled individuals differ. We provide axiomatic foundations for this measure, and a decomposition result that separates heterogeneity into its intra- and inter-personal components.