https://macropaperwarehouse.com/authors/haruki-kono/Haruki KonoHugo -- gohugo.ioen-ushttps://macropaperwarehouse.com/papers/random-utility-with-unobservable-alternatives/https://macropaperwarehouse.com/papers/random-utility-with-unobservable-alternatives/<p>This paper addresses a foundational gap in the random utility model (RUM) literature: existing axiomatizations by Falmagne (1978) and McFadden and Richter (1990) assume that whenever a menu is observed, the choice frequencies of all alternatives in that menu are observable. In practice, the choice frequencies of some alternatives are routinely missing. The paper derives the full testable implications of the random utility model for such incomplete datasets, delivering a finite, nonredundant system of linear inequalities as a necessary and sufficient condition for RU-rationalizability.</p>