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Compensatory versus noncompensatory models for predicting consumer preferences

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  • Anja Dieckmann
  • Katrin Dippold
  • Holger Dietrich
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    Abstract

    Standard preference models in consumer research assume that people weigh and add all attributes of the available options to derive a decision, while there is growing evidence for the use of simplifying heuristics. Recently, a greedoid algorithm has been developed (Yee, Dahan, Hauser \& Orlin, 2007; Kohli \& Jedidi, 2007) to model lexicographic heuristics from preference data. We compare predictive accuracies of the greedoid approach and standard conjoint analysis in an online study with a rating and a ranking task. The lexicographic model derived from the greedoid algorithm was better at predicting ranking compared to rating data, but overall, it achieved lower predictive accuracy for hold-out data than the compensatory model estimated by conjoint analysis. However, a considerable minority of participants was better predicted by lexicographic strategies. We conclude that the new algorithm will not replace standard tools for analyzing preferences, but can boost the study of situational and individual differences in preferential choice processes.

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    Bibliographic Info

    Article provided by Society for Judgment and Decision Making in its journal Judgment and Decision Making.

    Volume (Year): 4 (2009)
    Issue (Month): 3 (April)
    Pages: 200-213

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    Handle: RePEc:jdm:journl:v:4:y:2009:i:3:p:200-213

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    Related research

    Keywords: Conjoint analysis; greedoid algorithm; choice modeling; lexicographic heuristics; noncompensatory heuristics; consumer choice; consumer preferences.;

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    Cited by:
    1. Hauser, John R., 2014. "Consideration-set heuristics," Journal of Business Research, Elsevier, vol. 67(8), pages 1688-1699.
    2. Konstantinos V. Katsikopoulos & Cherng-Horng (Dan) Lan, 2011. "Herbert Simon’s spell on judgment and decision making," Judgment and Decision Making, Society for Judgment and Decision Making, vol. 6(8), pages 722-732, December.
    3. Su, Yin & Rao, Li-Lin & Li, Xingshan & Wang, Yong & Li, Shu, 2012. "From quality to quantity: The role of common features in consumer preference," Journal of Economic Psychology, Elsevier, vol. 33(6), pages 1043-1058.
    4. John Hauser, 2011. "A marketing science perspective on recognition-based heuristics (and the fast-and-frugal paradigm)," Judgment and Decision Making, Society for Judgment and Decision Making, vol. 6(5), pages 396-408, July.
    5. Ishizaka, Alessio & Balkenborg, Dieter & Kaplan, Todd R, 2010. "Does AHP help us make a choice? - An experimental evaluation," MPRA Paper 24213, University Library of Munich, Germany.

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