Discrete and Continuous Representations of Unobserved Heterogeneity in Choice Modeling

Marketing Letters 10:3 (1999): 219-232

15 Pages Posted: 15 Feb 2014

See all articles by Michel Wedel

Michel Wedel

University of Maryland - Robert H. Smith School of Business, Marketing Department; University of Groningen - Faculty of Economics and Business

Wagner A. Kamakura

Rice University

Neeraj Arora

University of Wisconsin - Madison - Department of Marketing

Albert C. Bemmaor

ESSEC Business School

Jeongwen Chiang

Hong Kong University of Science & Technology (HKUST) - Department of Marketing

Terry Elrod

affiliation not provided to SSRN

Rich Johnson

Sawtooth Software

Peter Lenk

University of Michigan, Stephen M. Ross School of Business

Scott Neslin

Dartmouth College - Tuck School of Business

Carsten Stig Poulsen

Aalborg University - Faculty of Social Sciences

Date Written: 1999

Abstract

We attempt to provide insights into how heterogeneity has been and can be addressed in choice modeling. In doing so, we deal with three topics: Models of heterogeneity. Methods of estimation and Substantive issues. In describing models we focus on discrete versus continuous representations of heterogeneity. With respect to estimation we contrast Markov Chain Monte Carlo methods and (simulated) likelihood methods. The substantive issues discussed deal with empirical tests of heterogeneity assumptions, the formation of empirical generalisations, the confounding of heterogeneity with state dependence and consideration sets, and normative segmentation.

Keywords: Mixing Distributions, Multinomial Logit, Multinomial Probit, Markov-Chain Monte Carlo, Simulated Likelihood

Suggested Citation

Wedel, Michel and Kamakura, Wagner A. and Arora, Neeraj and Bemmaor, Albert C. and Chiang, Jeongwen and Elrod, Terry and Johnson, Rich and Lenk, Peter and Neslin, Scott and Poulsen, Carsten Stig, Discrete and Continuous Representations of Unobserved Heterogeneity in Choice Modeling (1999). Marketing Letters 10:3 (1999): 219-232. Available at SSRN: https://ssrn.com/abstract=2395474

Michel Wedel (Contact Author)

University of Maryland - Robert H. Smith School of Business, Marketing Department ( email )

College Park, MD 20742
United States
301.405.2162 (Phone)
301.405.0146 (Fax)

HOME PAGE: http://www.rhsmith.umd.edu/marketing/faculty/wedel.html

University of Groningen - Faculty of Economics and Business ( email )

Postbus 72
9700 AB Groningen
Netherlands

Wagner A. Kamakura

Rice University ( email )

6100 South Main Street
P.O. Box 1892
Houston, TX 77005-1892
United States
(713) 348-6307 (Phone)

Neeraj Arora

University of Wisconsin - Madison - Department of Marketing ( email )

975 University Avenue
Madison, WI 53706
United States
(608) 262-1990 (Phone)
(608) 262-0394 (Fax)

Albert C. Bemmaor

ESSEC Business School ( email )

3 Avenue Bernard Hirsch
CS 50105 CERGY
CERGY, CERGY PONTOISE CEDEX 95021
France

Jeongwen Chiang

Hong Kong University of Science & Technology (HKUST) - Department of Marketing ( email )

Department of Marketing
Clear Water Bay, Kowloon
Hong Kong

Terry Elrod

affiliation not provided to SSRN

Rich Johnson

Sawtooth Software ( email )

1457 East 840 North
Orem, UT 84097-5486
United States

Peter Lenk

University of Michigan, Stephen M. Ross School of Business ( email )

701 Tappan Street
Ann Arbor, MI MI 48109
United States

Scott Neslin

Dartmouth College - Tuck School of Business ( email )

Hanover, NH 03755
United States

Carsten Stig Poulsen

Aalborg University - Faculty of Social Sciences ( email )

Fibigerstraede 4
DK-9100 Aalborg
Denmark

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