LOGIT-MODELS AND CHAOTIC BEHAVIOR - A NEW PERSPECTIVE

Chaos theory and discrete choice theory have been developed as two separate analytical tools from various disciplinary backgrounds. In this paper the aim is to link chaos theory (emerging mainly from physics) to discrete choice theory (emerging mainly from geography and economics) by showing the formal conditions under which a dynamic logit model can exhibit chaotic behaviour. It will be shown that under certain conditions a generalized predator - prey model arises from a dynamic logit model. Furthermore, the analysis will be extended by developing a time-delayed logit model related to a modal (or route) choice problem in which congestion effects are incorporated in a dynamic framework. The analysis will be illustrated by means of simulation experiments, in which it is shown that different types of behaviour (including chaotic movements) can emerge depending on critical values of the utility function. -Authors