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Categories shape preferences: A model of taste heterogeneity arising from categorization of alternatives

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  • Swait, Joffre
  • Brigden, Neil
  • Johnson, Richard D.

Abstract

We propose and test a choice model based on the notion that the category an alternative is perceived to fall into determines the attribute importance weights used to evaluate that alternative. For example, space is more important than fuel economy for an SUV, but the opposite is true for a commuter car. In our model, the weights associated with different categories are stable, but categorization decisions can be subject to significant context effects; that is to say, we suggest that context effects are due to task interpretation rather than to preference construction. We demonstrate that the model can correctly detect experimental manipulations of product categorizations, supporting its suitability as a tool to capture preference heterogeneity arising from categorizations outcomes. The model is then employed to analyze data from a discrete choice experiment and the results provide rich behavioral insights into how categorization influences choice processes.

Suggested Citation

  • Swait, Joffre & Brigden, Neil & Johnson, Richard D., 2014. "Categories shape preferences: A model of taste heterogeneity arising from categorization of alternatives," Journal of choice modelling, Elsevier, vol. 13(C), pages 3-23.
  • Handle: RePEc:eee:eejocm:v:13:y:2014:i:c:p:3-23
    DOI: 10.1016/j.jocm.2014.05.003
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    References listed on IDEAS

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    1. repec:eee:ecolet:v:159:y:2017:i:c:p:46-52 is not listed on IDEAS
    2. Santi, Éverton & Aloise, Daniel & Blanchard, Simon J., 2016. "A model for clustering data from heterogeneous dissimilarities," European Journal of Operational Research, Elsevier, vol. 253(3), pages 659-672.
    3. Aguiar, Victor H., 2017. "Random categorization and bounded rationality," Economics Letters, Elsevier, vol. 159(C), pages 46-52.
    4. Guyt, Jonne, 2015. "Consumer choice models on the effect of promotions in retailing," Other publications TiSEM c310f652-d725-4764-aac7-b, Tilburg University, School of Economics and Management.

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