A Model of Balanced Choice Behavior

Abstract

In some product categories, consumers appear to alternate among items in a consistent and purposeful, though not entirely deterministic, fashion. Such alternation occurs even in the absence of any apparent external influences on choice. To explain such balanced choice behavior, we present a model based upon the premise that past consumption influences the utility of items on subsequent choice occasions. Individuals may seek variety on certain product attributes and exhibit loyalty toward others. The model specification yields a logit choice model which may be calibrated using consumption diary panel data at the individual or cross-sectional level.