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The Dynamics of the consideration set formation process: a rational modelling perspective and some numerical results

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The notion of a consideration set describing a subset of brands from which an individual consumer will select or choose has received considerable attention in the recent literature. This paper develops a rational model of the consideration set formation process which is characterized by a sequential search balancing incremental benefit with decision costs. In contrast to previous work, the operationalization defines both incremental benefit and decision costs in the utility domain recognising the existence of perceptual complexity, preference differences, involvement, search economies, and inertia effects once a brand belongs to the consideration set. The model enables full analysis of the dynamics of consideration set formation over time. Extensive numerical results add validity to the process and its operationalization, and provide important insights into the likelihood of expansion and contraction of consideration sets

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en

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application/pdf

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http://flora.insead.edu/fichiersti_wp/Inseadwp1992/92-02.pdf

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Copyright INSEAD. All rights reserved