Conjunctive Screening in Models of Multiple Discreteness

25 Pages Posted: 29 Apr 2016 Last revised: 1 Apr 2020

See all articles by Youngju Kim

Youngju Kim

Korea University Business School (KUBS)

Nino Hardt

Ohio State University (OSU) - Fisher College of Business

Jaehwan Kim

Korea University Business School (KUBS)

Greg M. Allenby

Ohio State University (OSU) - Department of Marketing and Logistics

Date Written: March 31, 2020

Abstract

Consumer demand for products often result in the purchase of multiple goods at the same time. Corner solutions, or the non-purchase of items, occur when consumers have strong preference for some goods that do not satiate and weak preference for other goods. However, if non-purchase arises because a consumer finds particular brands and attributes unacceptable, leading to the formation of a consideration set, then estimates of preference will be too extreme and measures of preference and satiation will be biased. In this paper we develop a model of multiple discreteness, or horizontal variety, with conjunctive screening of the alternatives that remove offers from consideration. We find that conjunctive screening accounts for many of the observed corner solutions in our data and leads to estimates of preference and satiation that differs from traditional, compensatory model estimates. We explore implications for disentangling non-purchase due to consideration set formation using a conjoint data set of frozen pizza purchases.

Keywords: Product attributes, Direct utility, Constraints, Screening rules, Multiple Discreteness, Choice modeling, Conjoint Analysis

JEL Classification: M3, C8, C9

Suggested Citation

Kim, Youngju and Hardt, Nino and Kim, Jaehwan and Allenby, Greg M., Conjunctive Screening in Models of Multiple Discreteness (March 31, 2020). Available at SSRN: https://ssrn.com/abstract=2770025 or http://dx.doi.org/10.2139/ssrn.2770025

Youngju Kim

Korea University Business School (KUBS) ( email )

Anam-Dong, Seongbuk-Gu
Seoul 136-701, 136701
Korea

Nino Hardt (Contact Author)

Ohio State University (OSU) - Fisher College of Business ( email )

2100 Neil Avenue
Columbus, OH 43210-1144
United States

Jaehwan Kim

Korea University Business School (KUBS) ( email )

Anam-Dong, Seongbuk-Gu
Seoul 136-701, 136701
Korea
822.3290.2603 (Phone)
822.922.7220 (Fax)

Greg M. Allenby

Ohio State University (OSU) - Department of Marketing and Logistics ( email )

Fisher Hall 524
2100 Neil Ave
Columbus, OH 43210
United States

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