Multiple‐Constraint Choice Models with Corner and Interior Solutions

Multiple‐Constraint Choice Models with Corner and Interior Solutions

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Article ID: iaor20116020
Volume: 30
Issue: 3
Start Page Number: 481
End Page Number: 490
Publication Date: May 2011
Journal: Marketing Science
Authors: , ,
Keywords: choice models
Abstract:

A choice model based on direct utility maximization subject to an arbitrary number of constraints is developed and applied to conjoint data. The model can accommodate both corner and interior solutions, and it provides insights into the proportion of respondents bound by each constraint. Application to volumetric choice data reveals that the majority of respondents make choices consistent with price and quantity restrictions. Estimates based on a single monetary‐constraint choice model are shown to lead to biased estimates of the monetary value of attribute levels.

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