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Author: Robert P. Rooderkerk
Publisher:
ISBN:
Category :
Languages : en
Pages : 0
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Book Description
The behavioral literature provides ample evidence that consumer preferences are partly driven by the context provided by the set of alternatives. Three important context effects are the compromise, attraction, and similarity effect. As these context effects affect choices in a systematic and predictable way, it should be possible to incorporate them in a choice model. However, the literature does not offer such a choice model. This study fills this gap by proposing a discrete-choice model that decomposes a product's utility into a context-free partworth utility and a context-dependent component capturing all three context effects. Model estimation results on choice-based conjoint data concerning digital cameras provide convincing statistical evidence for context effects. The estimated context effects are consistent with the predictions from the behavioral literature, and accounting for context effects leads to better predictions both in and out-of-sample. To illustrate the benefit from incorporating context effects in a choice model, the authors illustrate how firms could utilize the context sensitivity of consumers to design more profitable product lines.
Author: Robert P. Rooderkerk
Publisher:
ISBN:
Category :
Languages : en
Pages : 0
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Book Description
The behavioral literature provides ample evidence that consumer preferences are partly driven by the context provided by the set of alternatives. Three important context effects are the compromise, attraction, and similarity effect. As these context effects affect choices in a systematic and predictable way, it should be possible to incorporate them in a choice model. However, the literature does not offer such a choice model. This study fills this gap by proposing a discrete-choice model that decomposes a product's utility into a context-free partworth utility and a context-dependent component capturing all three context effects. Model estimation results on choice-based conjoint data concerning digital cameras provide convincing statistical evidence for context effects. The estimated context effects are consistent with the predictions from the behavioral literature, and accounting for context effects leads to better predictions both in and out-of-sample. To illustrate the benefit from incorporating context effects in a choice model, the authors illustrate how firms could utilize the context sensitivity of consumers to design more profitable product lines.
Author: Juyoung Kim
Publisher:
ISBN:
Category :
Languages : en
Pages : 21
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Book Description
This paper presents a multidimensional scaling model that is estimated on pick any/N choice data, and accommodates a broad range of context effects. The methodology estimates a set of parameters capturing the direction and magnitude of the context effects, as well as the locations of brands and consumers' ideal points in a joint multidimensional space. Numerical simulation suggests that our approach can recover the true configuration of brands and ideal points in the presence of context effects with greater accuracy than a `baseline' model that does not incorporate any context effects. To illustrate the methodology and its implications, we provide an empirical application based on choice of supermarkets, from a consumer study conducted in the Netherlands.
Author: Raymond J. Dolan
Publisher: Academic Press
ISBN: 0123814316
Category : Business & Economics
Languages : en
Pages : 357
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Book Description
One of the most pressing questions in neuroscience, psychology and economics today is how does the brain generate preferences and make choices? With a unique interdisciplinary approach, this volume is among the first to explore the cognitive and neural mechanisms mediating the generation of the preferences that guide choice. From preferences determining mundane purchases, to social preferences influencing mating choice, through to moral decisions, the authors adopt diverse approaches to answer the question. Chapters explore the instability of preferences and the common neural processes that occur across preferences. Edited by one of the world's most renowned cognitive neuroscientists, each chapter is authored by an expert in the field, with a host of international contributors. Emphasis on common process underlying preference generation makes material applicable to a variety of disciplines - neuroscience, psychology, economics, law, philosophy, etc. Offers specific focus on how preferences are generated to guide decision making, carefully examining one aspect of the broad field of neuroeconomics and complementing existing volumes Features outstanding, international scholarship, with chapters written by an expert in the topic area
Author: Stephane Hess
Publisher: Edward Elgar Publishing
ISBN: 1800375638
Category : Business & Economics
Languages : en
Pages : 797
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Book Description
This thoroughly revised second edition Handbook provides an authoritative and in-depth overview of choice modelling, covering essential topics range from data collection through model specification and estimation to analysis and use of results. It aptly emphasises the broad relevance of choice modelling when applied to a multitude of fields, including but not limited to transport, marketing, health and environmental economics.
Author: Sandeep R. Chandukala
Publisher: Now Publishers Inc
ISBN: 1601981643
Category : Business & Economics
Languages : en
Pages : 100
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Book Description
Choice Models in Marketing examines recent developments in the modeling of choice for marketing and reviews a large stream of research currently being developed by both quantitative and qualitative researches in marketing. Choice in marketing differs from other domains in that the choice context is typically very complex, and researchers' desire knowledge of the variables that ultimately lead to demand in marketplace. The marketing choice context is characterized by many choice alternatives. The aim of Choice Models in Marketing is to lay out the foundations of choice models and discuss recent advances. The authors focus on aspects of choice that can be quantitatively modeled and consider models related to a process of constrained utility maximization. By reviewing the basics of choice modeling and pointing to new developments, Choice Models in Marketing provides a platform for future research.
Author: Andrei Barbos
Publisher:
ISBN:
Category :
Languages : en
Pages : 0
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Book Description
This paper studies a model of reference-dependent choice from sets of options grouped into categories. The proposed model is consistent with experimental evidence documenting context effects in a variety of choice situations. In our model, the reference point for any given category is subjective, and corresponds to the least preferred element in the category under consideration. Every object in a category is evaluated relative to the corresponding reference point; this may distort the objective ranking of options across different categories, and thus possibly give rise to a context-effects bias. The resulting representation is essentially unique. We also provide an economic application of the preferences that we axiomatize to principal agent models. We show how sellers facing consumers exhibiting the context-effects bias can increase their profits by exploiting their bounded rationality.
Author: Thomas S. Wallsten
Publisher: Taylor & Francis
ISBN: 1040025560
Category : Psychology
Languages : en
Pages : 299
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Book Description
Decision theory is a uniquely interdisciplinary field of study with contributions from economics, statistics, mathematics, philosophy, operations research, and psychology. The 1970s had seen important changes in research on behavioral decision theory in terms of a shift from a reliance on economic and statistical models to an emphasis on concepts drawn from cognitive psychology. Originally published in 1980, Cognitive Processes in Choice and Decision Behavior contains papers that explore the reasons why these changes had come about and discuss the future directions to which they pointed. It was clear at the time that research in behavioral decision theory was changing dramatically. The chapters in this book represent a good assessment of the reasons the changes were coming about and some of the merits and problems of the directions in which it was moving. Today it can be read in its historical context.
Author: Juyoung Kim
Publisher:
ISBN:
Category : Consumers' preferences
Languages : en
Pages : 302
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Book Description
Author: Ran Kivetz
Publisher:
ISBN:
Category :
Languages : en
Pages : 0
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Book Description
The compromise effect denotes the finding that brands gain share when they become the intermediate rather than an extreme option in a choice set (Simonson 1989). Despite the robustness and importance of this phenomenon, choice modelers have neglected to incorporate the compromise effect within formal choice models and to test whether such models outperform the standard value maximization model. In this article, we suggest four context-dependent choice models that can conceptually capture the compromise effect. Although these models are motivated by theory from economics and behavioral decision research, they differ with respect to the particular mechanism that underlies the compromise effect (e.g., contextual concavity vs. loss aversion). Using two empirical applications, we (1) contrast the alternative models and show that incorporating the compromise effect by modeling the local choice context leads to superior predictions and fit relative to the traditional value maximization model and a stronger (naive) model that adjusts for possible biases in utility measurement; (2) generalize the compromise effect by demonstrating that it systematically affects choice in larger sets of products and attributes than previously shown; (3) show the theoretical and empirical equivalence of loss aversion and local (contextual) concavity; and (4) demonstrate the superiority of models that use a single reference point over "tournament models" in which each option serves as a reference point. We discuss the theoretical and practical implications of this research, as well as the ability of the proposed models to predict other behavioral context effects.
Author: Berend Wierenga
Publisher: Springer
ISBN: 3319569414
Category : Business & Economics
Languages : en
Pages : 598
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Book Description
The Second Edition of this book presents the state of the art in this important field. Marketing decision models constitute a core component of the marketing discipline and the area is changing rapidly, not only due to fundamental advances in methodology and model building, but also because of the recent developments in information technology, the Internet and social media. This Handbook contains eighteen chapters that cover the most recent developments of marketing decision models in different domains of marketing. Compared to the previous edition, thirteen chapters are entirely new, while the remaining chapters represent complete updates and extensions of the previous edition. This new edition of the Handbook has chapters on models for substantive marketing problems, such as customer relationship management, customer loyalty management, website design, Internet advertising, social media, and social networks. In addition, it contains chapters on recent methodological developments that are gaining popularity in the area of marketing decision models, such as structural modeling, learning dynamics, choice modeling, eye-tracking and measurement. The introductory chapter discusses the main developments of the last decade and discusses perspectives for future developments.
