Empirical Models of Consumer Behavior

Empirical Models of Consumer Behavior

Models of consumer behavior play a key role in modern empirical Industrial Organization. In this paper, I survey some of the models used in this literature. In particular, I discuss two commonly used demand systems: multi-stage budgeting approaches and discrete choice models. I motivate their use and highlight some key modeling assumptions. I next brie‡y discuss key issues of estimation, and co...

Adaptive Learning Models of Consumer Behavior

In a model of dynamic duopoly, optimal price policies are characterized assuming consumers learn adaptively about the relative quality of the two products. A contrast is made between belief-based and reinforcement learning. Under reinforcement learning, consumers can become locked into the habit of purchasing inferior goods. Such lock-in permits the existence of multiple history-dependent asymm...

An Empirical Study of Factors Related to Consumer Complaint Behavior

This paper focuses on factors related to consumer complaint behavior tendency in Internet. Current literatures from home and abroad focus on how to improve consumer’s satisfaction and loyalty, while there are still relatively few researches on consumer dissatisfaction and complaint behavior. Based on the analysis of consumer complaint behavior tendency in Internet, this paper discusses the fact...

A Critical Review of Online Consumer Behavior: Empirical Research

Comparing Alternative Models of Heterogeneity in Consumer Choice Behavior

While there is general agreement that consumer taste heterogeneity is crucially important in marketing, there is no consensus on a preferred approach to modeling heterogeneity. In this paper, we assess the performance of five alternative choice models, using ten empirical data sets. We include the popular latent class (LC) model, and the mixed logit (MIXL) model where utility weights are assume...