Random Utility Theory

Random Utility Theory suggests that when people make choices among alternatives, they aim to select the option with the highest perceived benefit or utility. However, because individual preferences, perceptions, and external factors vary and are often uncertain, there is some randomness in decision-making. This means that each choice can be influenced by both known preferences and unpredictable elements. The theory models this behavior by assuming that choices are probabilistic, allowing researchers to predict the likelihood of selecting certain options based on their attributes and how individuals value them, acknowledging both predictable and random influences on decisions.