Discrete choice in marketing through the lens of rational inattention

Sergey Turlo (), Matteo Fina (), Johannes Kasinger (), Arash Laghaie () and Thomas Otter
Additional contact information
Sergey Turlo: Johann Wolfgang Goethe University Frankfurt
Matteo Fina: Johann Wolfgang Goethe University Frankfurt
Johannes Kasinger: Tilburg University
Arash Laghaie: Nova School of Business and Economics

Quantitative Marketing and Economics (QME), 2025, vol. 23, issue 1, No 2, 45-104

Abstract: Abstract Models derived from random utility theory represent the workhorse methods to learn about consumer preferences from discrete choice data. However, a large body of literature documents various behavioral patterns that cannot be captured by basic random utility models and require different non-unified adjustments to accommodate these patterns. In this article, we discuss strategies how to apply rational inattention theory—which explains a large variety of such departures—to the analysis of discrete choice among multiple alternatives described along multiple attributes. We first review existing applications that make restrictive belief assumptions to obtain choice probabilities in closed multinomial logit form. We then propose a model that allows for general consumer beliefs and demonstrate its empirical identification. Further, we illustrate how this model naturally motivates stylized empirical results that are hard to reconcile from a random utility perspective.

Keywords: Choice modeling; Rational inattention; Conjoint analysis; Discrete choice experiments (search for similar items in EconPapers)
JEL-codes: C00 C35 D83 M31 (search for similar items in EconPapers)
Date: 2025
References: Add references at CitEc
Citations:

Downloads: (external link)
http://link.springer.com/10.1007/s11129-025-09292-9 Abstract (text/html)
Access to the full text of the articles in this series is restricted.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:kap:qmktec:v:23:y:2025:i:1:d:10.1007_s11129-025-09292-9

Ordering information: This journal article can be ordered from
http://www.springer. ... ng/journal/11129/PS2

DOI: 10.1007/s11129-025-09292-9

Access Statistics for this article

Quantitative Marketing and Economics (QME) is currently edited by Pradeep Chintagunta

More articles in Quantitative Marketing and Economics (QME) from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().