Template-Type: ReDIF-Paper 1.0
Author-Name: Vroomen, B.L.K.
Author-Name-Last: Vroomen
Author-Name-First: Björn
Author-Name: Franses, Ph.H.B.F.
Author-Name-Last: Franses
Author-Name-First: Philip Hans
Author-Person: pfr226
Author-Name: van Nierop, J.E.M.
Author-Name-Last: van Nierop
Title: Modeling Consideration Sets and Brand Choice Using Artificial Neural Networks
Abstract: The concept of consideration sets makes brand choice a two-step process. House-holds first construct a consideration set which not necessarily includes all available brands and conditional on this set they make a final choice. In this paper we put forward a parametric econometric model for this two-step process, where we take into account that consideration sets usually are not observed. It turns out that our model is an artificial neural network, where the consideration set corresponds with the hidden layer. We discuss representation, parameter estimation and inference. We illustrate our model for the choice between six detergent brands and show that the model improves upon a one-step multinomial logit model, in terms of fit and out-of-sample forecasting.
Creation-Date: 2001-03-20
File-URL: https://repub.eur.nl/pub/79/erimrs20010320164414.pdf
File-Format: application/pdf
Series: RePEc:ems:eureri
Number: ERS-2001-10-MKT
Classification-JEL: C44, C45, M, M31
Keywords: artificial neural network, brand choice, consideration set
Handle: RePEc:ems:eureri:79