Service-choice behaviour modelling constructed with multiple decision-making processes

Takeshi Kurosawa, Ken Nishimatsu, Motoi Iwashita, Akiya Inoue, Moshe E. Ben-Akiva and Denis Bolduc ()

International Journal of Services, Economics and Management, 2011, vol. 3, issue 3, 301-322

Abstract: Several models have been proposed to express customer preference variation. In this paper, we express it not by customer segmentation but by latent class. Not only decision-making factors but also decision-making processes differ according to the class. We propose a service-choice behaviour modelling constructed with multiple decision-making processes using an estimation method based on the expectation-maximisation algorithm. As an empirical experiment, we constructed a model of telephone service choice with optional services. We assume that there are two typical decision-making processes for this choice. One is to choose an optional service type first. The other is to choose a telephone company first. A nested structure model for the classified customer segment is constructed for each process. Namely, the model has two types of nested models which correspond to two decision-making processes. In a comparison with conventional models, we showed that the proposed model can improve the accuracy of the model.

Keywords: discrete choice analysis; expectation-maximisation algorithm; decision making; consumer behaviour; service choice; behaviour modelling; customer preferences; customer segmentation; latent class; telephone services; phone services. (search for similar items in EconPapers)
Date: 2011
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Persistent link: https://EconPapers.repec.org/RePEc:ids:injsem:v:3:y:2011:i:3:p:301-322

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