Multiple-Constraint Choice Models with Corner and Interior Solutions
Takuya Satomura, Jaehwan Kim, Greg M. Allenby
Marketing Science · 2011 · Volume 30 · Issue 3
Abstract
A choice model based on direct utility maximization subject to an arbitrary number of constraints is developed and applied to conjoint data. The model can accommodate both corner and interior solutions, and it provides insights into the proportion of respondents bound by each constraint. Application to volumetric choice data reveals that the majority of respondents make choices consistent with price and quantity restrictions. Estimates based on a single monetary-constraint choice model are shown to lead to biased estimates of the monetary value of attribute levels.
Keywords
multiple constraints, choice model, corner and interior solutions, quantity restriction
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