| Article ID: | iaor1993475 |
| Country: | United States |
| Volume: | 10 |
| Issue: | 4 |
| Start Page Number: | 297 |
| End Page Number: | 315 |
| Publication Date: | Sep 1991 |
| Journal: | Marketing Science |
| Authors: | Chiang Jeongwen |
| Keywords: | demand, decision theory, commerce, agriculture & food |
Consumer’s purchase decisions of whether to buy, what to buy and how much to buy are examined simultaneously. Based on a consumer utility maximization problem, an unobservable threshold price, about which a consumer pivots from nonpurchase to purchase, can be deduced. With any model specification, the interrelationships between purchase decisions can be explicitly derived. The model is applied to coffee purchasing data. In addition, by suppressing the nonpurchase options the model is compared with an alternative approach appearing in the marketing literature.