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A New brand choice model incorporating a choice set formation process

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This paper develops an individual-level choice model wich embeds a rational choice set generation process. The choice set generation process is motivated by a goal-derived categorization paradigm where consumers make uncertain judgments about the ability of brands to meet the consumption or usage goal motivating the choice decision. Recognising this uncertainty, brand selection is modeled as a decision under uncertainty within a random utility framework. The modeling of the process builds on previously suggested formalizations based on search-theory and decision costs. Derivations are provided for a flexible and parsimonious representation of the choice probabilities which are characterized neither by IIA nor the regularity property. Some initial empirical results using scanner data are reported

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en

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application/pdf

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http://flora.insead.edu/fichiersti_wp/Inseadwp1994/94-03.pdf

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Copyright INSEAD. All rights reserved