On the Distinction between Consideration and Utility

43 Pages Posted: 6 May 2014 Last revised: 21 Aug 2018

See all articles by Keyvan Dehmamy

Keyvan Dehmamy

University of Groningen - Department of Marketing & Marketing Research

Thomas Otter

Goethe University Frankfurt - Department of Marketing

Date Written: August 20, 2018

Abstract

We investigate the distinction between consideration and utility in a context where consumers not only optimize which brand to choose, but also how much to choose from each brand. We show analytically how utility maximization in quantities based on twice-continuously differentiable utility functions motivates the distinction between consideration and utility. We also explain how drivers of consideration may spuriously appear to exert a negative influence on demand when included as covariates to expected utility, resulting in models that lack face validity as a basis for decision making. We illustrate our theoretical arguments using data from a choice experiment designed to measure the influence of shelf-facings on demand.

Keywords: Two-stage decisions, consideration-sets, discrete-continuous demand, data augmentation, hierarchical Bayes

JEL Classification: C11, C51, M31, M37

Suggested Citation

Dehmamy, Keyvan and Otter, Thomas, On the Distinction between Consideration and Utility (August 20, 2018). Available at SSRN: https://ssrn.com/abstract=2433145 or http://dx.doi.org/10.2139/ssrn.2433145

Keyvan Dehmamy

University of Groningen - Department of Marketing & Marketing Research ( email )

Netherlands
+31503637065 (Phone)

HOME PAGE: http://www.rug.nl/staff/k.dehmamy/

Thomas Otter (Contact Author)

Goethe University Frankfurt - Department of Marketing ( email )

Frankfurt
Germany
++49.69.798.34646 (Phone)

HOME PAGE: http://www.marketing.uni-frankfurt.de/index.php?id=97?&L=1

Here is the Coronavirus
related research on SSRN

Paper statistics

Downloads
160
Abstract Views
1,031
rank
202,065
PlumX Metrics