Please correct answer and don't use hand rating A discrete choice model of travel mode to work includes twoalternatives:driving alone (alternative 1) and taking transit (alternative 2)The model is based onthe following utility functions:U1 =\phi 1 − t + \xi 1U2=\phi 2 - t^ + \xi 2where \phi 1 and \phi 2 are model parameters. Both errorterms \xi 1 and \xi 2 follow a uniformdistribution between -b and b(a) Develop an analytical expression for P1 as a function of\phi 1, \phi 2, t. t^, and b..(b) Assume that \phi 1-\phi 2 == 1 and plot P1 versus t^- tfor several values of b. Discussthe effect of b on the choice probability and draw generalconclusions.

~we will use the multinomial logit model framework. The choice probability for alternative 1…

Answered: A discrete choice model of travel mode…

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter7: Uncertainty

Section: Chapter Questions

Problem 7.11P

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Estimate the following model: purchase = β0 + β1traditional + β2aggregator + β3substack
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39
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