Discrete and Continuous Representations of Unobserved Heterogeneity in Choice Modeling
Marketing Letters 10:3 (1999): 219-232
15 Pages Posted: 15 Feb 2014
Date Written: 1999
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
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