Modeling the Intra Household Behavioral Interaction

Abstract:     
Quantitative models in marketing typically focus on the household as the unit of analysis while ignoring the individual family members' behavior and behavioral interactions among household members. However, knowledge of such intra-household behavioral interaction enables marketers to target their communications more effectively. In this paper, we propose a modeling framework to capture the intra-household behavioral interaction based on family members' actual consumption behavior over time. We develop a model to capture multiple agents' (more than two individuals') simultaneous choice decisions over more than two choice alternatives. This is extremely difficult with other previously developed modeling approaches. We apply the proposed model to a context of family member's television viewing, and simultaneously model whether TV is on, which type of programs is playing and which family member(s) is(are) watching. The proposed model allows us to estimate the individual's intrinsic preference and the extrinsic preference from a joint consumption with other members. These estimates allow us to test several alternative group decision-making heuristics that may operate in those joint consumption occasions and conduct managerially useful counterfactual simulations.

Keywords: Autologistic choice model, Joint Consumption, Behavioral interaction, Family member decision-making, and Hierarchical Bayesian analysis

JEL Classifications: C11, C35, M31

Working Paper Series