Investigating the Competitive Assumption of Multinomial Logit Models of Brand Choice by Nonparametric Modeling
AbstractThe Multinomial Logit (MNL) model is still the only viable option to study nonlinear responsiveness of utility to covariates nonparametrically. This research investigates whether MNL structure of inter-brand competition is a reasonable assumption, so that when the utility function is estimated nonparametrically, the IIA assumption does not bias the result. For this purpose, the authors compare the performance of two comparable nonpara-metric choice models that differ in one aspect: one assumes MNL com-petitive structure and the other infers the pattern of brands' competition nonparametrically from data.
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Bibliographic InfoPaper provided by CIRJE, Faculty of Economics, University of Tokyo in its series CIRJE F-Series with number CIRJE-F-193.
Length: 21 pages
Date of creation: Feb 2003
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Other versions of this item:
- Makoto Abe & Yasemin Boztug & Lutz Hildebrandt, 2004. "Investigating the competitive assumption of Multinomial Logit models of brand choice by nonparametric modeling," Computational Statistics, Springer, vol. 19(4), pages 635-657, December.
- NEP-ALL-2003-02-24 (All new papers)
- NEP-DCM-2003-02-24 (Discrete Choice Models)
- NEP-ECM-2003-02-26 (Econometrics)
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