Cumulative Discrete Choice

Itzhak Gilboa and Amit Pazgal

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Abstract: We present a discrete choice model in which a consumer's impression of each alternative is based on her memory of past experience with this choice, and is stochastically updated whenever the alternative is chosen. The consumer remembers a cumulative utility index per alternative, and, when an alternative is chosen, the index is updated by the addition of a random variable, interpreted as instantaneous utility. We prove that the frequencies of choice converge, with probability 1, to limit frequencies, which can be computed from the model's parameters.

Keywords: cumulative; discrete; choice (search for similar items in EconPapers)
Date: 2001-05
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Citations: View citations in EconPapers (7)

Published in Marketing Letters, 2001, vol. 12, n°2, pp. 119-130. ⟨10.1023/A:1011134718403⟩

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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-00752291

DOI: 10.1023/A:1011134718403

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