Classical consumer theory assumes that products are infinitely divisible and consumers may purchase fractional quantities as dictated by their preferences and budget sets. However,for many goods and services individuals purchase only a few and sometimes at most one. Thus classical models of discrete choice in economics were developed to extend consumer choice theory to model demand of discrete ...

Researchers frequently use Latent Class (LC) choice models for strategic segmentation and targeting purposes to 1) find meaningful segments of respondents having different preferences, and 2) estimate part-worth utilities for these segments. However, LC models can form spurious segments that mainly differ in terms of scale (response error) but don’t differ much in terms of real preference patte...

Researchers frequently use Latent Class (LC) choice models for strategic segmentation and targeting purposes to 1) find meaningful segments of respondents having different preferences, and 2) estimate part-worth utilities for these segments. However, LC models can form spurious segments that mainly differ in terms of scale (response error) but don’t differ much in terms of real preference patte...

JEL Classification:

Applying theory from behavioural psychology, we demonstrate that product preferences are not “found” in people, but rather constructed by people on an as-needed basis. The demonstration explores the relationship between crux product attributes, which are both important and difficult for people to assess, and sentinel attributes, which are easy for people to assess and have a perceived associati...

Article history: Received 17 March 2011 Available online xxxx JEL classification: C72 C73