Capturing Consumption Flexibility in Assortment Choice from Scanner Panel Data
This study develops and estimates a model to empirically identify two behavioral effects (namely consumption flexibility and state dependence) that may underlie temporal and horizontal assortment choice, using scanner panel data where consumption information is unavailable. The proposed approach permits a consumer's consumption utility to be dependent on previous consumptions, thus capturing state dependence both across purchase occasions and within horizontal assortments. Moreover, consumers' purchase and consumption decisions are modeled at two distinctive and sequentially related stages, which allows for incorporating the effect of consumption flexibility. The model is estimated on scanner panel data of yogurt purchase. It is found that the two captured effects provide strong empirical support with face validity for the temporal and horizontal assortment choice patterns observed in the data. The behavioral insights derived from estimating the proposed model can also be translated into significant managerial implications.
Volume (Year): 56 (2010)
Issue (Month): 10 (October)
|Contact details of provider:|| Postal: 7240 Parkway Drive, Suite 300, Hanover, MD 21076 USA|
Web page: http://www.informs.org/
More information through EDIRC
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Liang Guo, 2006. "Consumption Flexibility, Product Configuration, and Market Competition," Marketing Science, INFORMS, vol. 25(2), pages 116-130, 03-04.
- Tülin Erdem, 1996. "A Dynamic Analysis of Market Structure Based on Panel Data," Marketing Science, INFORMS, vol. 15(4), pages 359-378.
- Jinhong Xie & Steven M. Shugan, 2001. "Electronic Tickets, Smart Cards, and Online Prepayments: When and How to Advance Sell," Marketing Science, INFORMS, vol. 20(3), pages 219-243, June.
- Mayhew, Glenn E & Winer, Russell S, 1992. " An Empirical Analysis of Internal and External Reference Prices Using Scanner Data," Journal of Consumer Research, Oxford University Press, vol. 19(1), pages 62-70, June.
- Jean-Pierre Dubé, 2004. "Multiple Discreteness and Product Differentiation: Demand for Carbonated Soft Drinks," Marketing Science, INFORMS, vol. 23(1), pages 66-81, September.
- James M. Lattin, 1987. "A Model of Balanced Choice Behavior," Marketing Science, INFORMS, vol. 6(1), pages 48-65.
- Peter M. Guadagni & John D. C. Little, 1983. "A Logit Model of Brand Choice Calibrated on Scanner Data," Marketing Science, INFORMS, vol. 2(3), pages 203-238.
- John W. Walsh, 1995. "Flexibility in Consumer Purchasing for Uncertain Future Tastes," Marketing Science, INFORMS, vol. 14(2), pages 148-165.
- Tülin Erdem & Michael P. Keane, 1996. "Decision-Making Under Uncertainty: Capturing Dynamic Brand Choice Processes in Turbulent Consumer Goods Markets," Marketing Science, INFORMS, vol. 15(1), pages 1-20.
- Igal Hendel, 1999. "Estimating Multiple-Discrete Choice Models: An Application to Computerization Returns," Review of Economic Studies, Oxford University Press, vol. 66(2), pages 423-446.
- McAlister, Leigh, 1982. " A Dynamic Attribute Satiation Model of Variety-Seeking Behavior," Journal of Consumer Research, Oxford University Press, vol. 9(2), pages 141-50, September.
- Hauser, John R & Wernerfelt, Birger, 1990. " An Evaluation Cost Model of Consideration Sets," Journal of Consumer Research, Oxford University Press, vol. 16(4), pages 393-408, March.
When requesting a correction, please mention this item's handle: RePEc:inm:ormnsc:v:56:y:2010:i:10:p:1815-1832. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Mirko Janc)
If references are entirely missing, you can add them using this form.