Factorial Preference Structures

Abstract

This article presents a way to model individual preferences and purchase intentions under the assumption that the pattern of relative similarity or substitutability among brands can be represented factorially. Factorial preference structures represent a compromise between the Luce model, which assumes that none of the alternatives share any common features, and EBA, which assumes that each possible subset of a choice set has a unique set of common features. Factorial preference structures are compared to several hierarchical structures and to one that assumes that preferences are simply scalable.