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A Choice Model with Conjunctive, Disjunctive, and Compensatory Screening Rules

2004; Institute for Operations Research and the Management Sciences; Volume: 23; Issue: 3 Linguagem: Inglês

10.1287/mksc.1030.0032

1526-548X

Timothy J. Gilbride, Greg M. Allenby,

Decision-Making and Behavioral Economics

Many theories of consumer behavior involve thresholds and discontinuities. In this paper, we investigate consumers' use of screening rules as part of a discrete-choice model. Alternatives that pass the screen are evaluated in a manner consistent with random utility theory; alternatives that do not pass the screen have a zero probability of being chosen. The proposed model accommodates conjunctive, disjunctive, and compensatory screening rules. We estimate a model that reflects a discontinuous decision process by employing the Bayesian technique of data augmentation and using Markov-chain Monte Carlo methods to integrate over the parameter space. The approach has minimal information requirements and can handle a large number of choice alternatives. The method is illustrated using a conjoint study of cameras. The results indicate that 92% of respondents screen alternatives on one or more attributes.