A model for multiple brand choice

This paper considers a simultaneous choice model that describes consumer selection of multiple brands. The proposed model considerably extends research possibilities in the demand area by relaxing the restrictive assumption of mutually exclusive alternatives, which characterizes multinomial discrete choice methods. An essential contribution lies in the explicit treatment of stochastic dependencies among latent brand utilities. Two empirical applications illustrate how the model determines brand demand functions and yields quantitative insights into the competitive structure of the examined markets. An alternative specification of the multivariate, simultaneous probit model assuming independent covariance structure is also addressed.