A Satisficing Choice Model

• Activity Number: 604
• Type: Topic Contributed
• Date/Time: Thursday, August 4, 2011 : 8:30 AM to 10:20 AM
• Sponsor: Section on Statistics and Marketing
• Author(s): Peter Stuettgen*+
• Companies: Carnegie Mellon University

Abstract

In addition to the standard compensatory choice models, a new stream of research has recently proposed several non-compensatory choice models, most of them variants of the conjunctive choice rule. We contribute to this new stream by formulating a consumer choice model based on Simon's (1955) idea of "satisficing" decision making, in which alternatives are evaluated sequentially and the first satisfactory alternative is chosen. This requires knowledge (or probabilistic modeling) of the sequence of evaluation, a part of decision making that does not appear in previous models. We estimate our model using data from a conjoint-like experiment, in which the stimuli are pictorials of supermarket shelves and the participants' gaze is recorded via eye-tracking equipment. Eye-tracking not only allows us to know the order of evaluation, but also to only include information into the decision making process that the decision maker was actually aware of. Finally, modeling the observed eye path and the decision making jointly let's us (1) differentiate between variable that affect attention vs. variables that affect choice and (2) explore interactions of how choice variables may affect search.