Nested Choice Model
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In the logit model, we assumed independent error term with extreme value distributions.
make sense？
Why？
•The i.i.d assumption essentially created the IIA property of Logit model. •This is not completely correct, because other distributions for the unobserved, say with normal errors, we would not get IIA exactly, but something pretty close to it. •We need to relax the independence between the unobserved error term ε
####Solution to IIA
簇与簇之间是独立的，但是簇的内部有相关性
Properties of Nested Logit Model
Ink 是内部方案的吸引力
一般用前者，渐进有效；后者一致但不有效
