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A latent choice model to analyze the role of preliminary preferences in shaping observed choices

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  • Mahmud, Asif
  • Gayah, Vikash V.
  • Paleti, Rajesh

Abstract

When selecting among a set of alternatives, individuals often compare each alternative with reference to some preliminary preference (PP). The preliminary preference could be the individual's preferred global option (i.e., their ideal choice) or the most ideal option within the current choice set. Previous research has shown that loss of an attribute relative to that of the PP has a stronger impact on the individual's choice compared to gain of that attribute—a phenomenon commonly known as loss aversion. To incorporate this loss aversion into choice modeling, the PP of the individuals must then be known; however, such information is generally not available when observing individual's choice behavior.

Suggested Citation

  • Mahmud, Asif & Gayah, Vikash V. & Paleti, Rajesh, 2022. "A latent choice model to analyze the role of preliminary preferences in shaping observed choices," Transportation Research Part B: Methodological, Elsevier, vol. 161(C), pages 95-108.
    • Handle: RePEc:eee:transb:v:161:y:2022:i:c:p:95-108
    DOI: 10.1016/j.trb.2022.05.008
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