Attributes Of Choice Alternatives Research Articles

Dual choice axiom and probabilistic choice

A decision maker chooses in a probabilistic manner if she does not necessarily prefer the same choice alternative when repeatedly presented with the same choice set. Probabilistic choice may occur for a variety of reasons such as unobserved attributes of choice alternatives, imprecision of preferences, or random errors/noise in decisions. The Luce choice model (also known as strict utility or multinomial logit) is derived from the choice axiom (also known as the independence from irrelevant alternatives). This axiom postulates that the relative likelihood of choosing one choice alternative A over another choice alternative B is not affected by the presence or absence of other choice alternatives in the choice set. This paper presents a dual choice axiom: the relative probability of NOT choosing A over the probability of NOT choosing B is independent from irrelevant alternatives. A new model of probabilistic choice is derived from this dual axiom. This model coincides with Luce’s choice model only in the case of a binary choice. The new model has similar properties as the Luce choice model: the higher is the utility of a choice alternative, the higher is the probability that a decision maker chooses this alternative and the lower is the probability that he or she chooses any other alternative. The new model differs from the Luce choice model in two aspects: utility of choice alternatives is bounded (from above and below) and choice probabilities are more sensitive to differences in utility of choice alternatives.

Probabilistic independence axiom

One of the most well-known theories of decision making under risk is expected utility theory based on the independence axiom. The independence axiom postulates that decision maker’s preferences between two lotteries are not affected by mixing both lotteries with the same third lottery (in identical proportions). The probabilistic independence axiom (also known as the cancelation axiom) extends this classic independence axiom to situations when a decision maker chooses in a probabilistic manner (i.e., she does not necessarily prefer the same choice alternative when repeatedly presented with the same choice set). Probabilistic choice may occur for a variety of reasons such as unobserved attributes of choice alternatives, imprecision of preferences, random errors/noise in decisions. According to probabilistic independence axiom, the probability that a decision maker chooses one lottery over another does not change when both lotteries are mixed with the same third lottery (in identical proportions). This paper presents a model of probabilistic binary choice under risk based on this probabilistic independence axiom. The presented model generalizes an incremental expected utility advantage model of Fishburn (Int Econ Rev 19(3):633–646, 1978) and stronger utility model of Blavatskyy (Theory Decis 76(2):265–286, 2014).

Is \u2018referencing\u2019 a remedy to hypothetical bias in value of time elicitation? Evidence from economic experiments

This paper demonstrates that commonly used methods for eliciting value of time can give downward bias and investigates whether this can be reversed by ‘referencing’ as has been suggested (e.g., by Hensher in Transp Res B 44:735–752, 2010), i.e. with attributes of choice alternatives pivoted around a recently made journey. Value-of-time choice experiments were conducted in two rounds. In the first round, real and hypothetical purchases of performance of a simple time-consuming task were done to assess hypothetical bias; in the second round, participants were asked to do hypothetical travel choices with and without ‘referencing’ to a specific occasion, to be able to test ‘referencing’ as a remedy to the bias confirmed in the first round. A negative hypothetical bias was found for allocation of time at another occasion than the present (but not for a decision concern allocation of time ‘here and now’). A striking result was held from the second round experiments: ‘referencing’ indeed affects responses, but by reducing the elicited implicit value of time, so any negative hypothetical bias that would exist without ‘referencing’ would have been further magnified by the ‘referencing’ design.

Examining the mechanisms underlying contextual preference reversal: Comment on Trueblood, Brown, and Heathcote (2014).

Trueblood, Brown, and Heathcote (2014) provide a new model of multiattribute choice, which accounts for 3 contextual reversal effects (similarity, attraction and compromise). We review the details of the model and highlight some novel predictions. First, we show that the model works by setting a "fine balance" between 2 opposing factors that influence choice. As a result, small changes in the attributes of choice alternatives can disturb this balance. Second, we show that the model gives a partial account of the compromise effect. We describe a number of experiments that could distinguish the MLBA from other models of multiattribute choice.

Car Drivers’ Compliance with Route Advice and Willingness to Choose Socially Desirable Routes

This study describes the results of a stated choice experiment conducted to analyze route choice behavior of car drivers under the influence of advice and feedback on environmental consequences of their trips. Framing of the route advice is varied in regard to the goal of the agency providing the advice (system or individual optimality) and extent to which it is generic or tailored to the specific preferences of the person. Findings suggest that under conditions of rich information about the attributes of choice alternatives, advice is discarded when it is supposed to serve the driver's own interests, and information allows the individuals to evaluate outcomes independently, but advice is taken into account when it is said to serve traffic management objectives. In line with expectations, the effect of advice is larger when it is labeled as personal compared with when it is labeled as generic. Another finding is that the effect of advice on evaluations of route alternatives is not uniform across attributes. Whereas some attributes become suppressed in the evaluation, others become more salient. The study further provides evidence that travelers are willing to trade social objectives against individual-level objectives. Implications of these findings for the design and use of travel information systems as an instrument for traffic management are discussed and problems for future research are identified.

Commentary—On the Interpretation of Temporal Inflation Parameters in Stochastic Models of Judgment and Choice

The implications of Salisbury and Feinberg's (2010) paper [Salisbury, L. C., F. M. Feinberg. 2010. Alleviating the constant stochastic variance assumption in decision research: Theory, measurement, and experimental test. Marketing Sci. 29(1) 1–17] for the process of model development and testing in the field of intertemporal choice analysis is explored. Although supporting the overall thrust of Salisbury and Feinberg's critique of previous empirical work in the area, we also see their paper as illustrating the dangers of drawing strong inferences about the behavioral interpretation of statistical model parameters without seeking convergent empirical evidence. In particular, we are skeptical about the extent to which the reported effects of temporal distance on the estimated scale parameter, σc, are uniquely, or even primarily, due to unobserved error inflation that reflects consumer's uncertainty about future utility. This interpretation is brought into question by several lines of reasoning. Conceptually, we note that “uncertainty” is different from “error” and that, for choice data, the error inflation model is mathematically identical to a model in which the scale parameter is a deterministic function of the temporal discount rate. Empirically, a reanalysis of data from previously published experiments does not consistently support temporal error inflation, temporal convergence of choice shares, or the scale parameter as an explanation of variety seeking in choice sequences. In our opinion, the cumulative results of research on intertemporal choice require models in which the attributes of choice alternatives are differentially discounted over time. Despite these findings, we advocate that choice researchers should indeed follow Salisbury and Feinberg's advice to not assume that error variances will be unaffected by experimental manipulations, and such effects should be explicitly modeled. We also agree that uncovering effects on error variance is just the first step, and the ultimate goal should be to rigorously explain the reasons for such effects.

Pairwise Conjoint Analysis of Activity Engagement Choice

Information overload is a well-known problem of conjoint choice models when respondents have to evaluate a large number of attributes and/or attribute levels. In this paper we develop an alternative conjoint modelling approach, called pairwise conjoint analysis. It differs from conventional conjoint choice and preference models in that the attributes of choice alternatives or choice contexts are not varied simultaneously, but in pairs. Properties of the design strategy are discussed. The new approach is illustrated by using activity engagement choice as an example.

Hierarchical Information Integration Applied to Residential Choice Behavior

The method of hierarchical information integration can be applied to the study of complex decision‐making processes in which preference formation is influenced by many attributes of choice alternatives. In this paper, we extend Louviere's (1984) original approach to include the modeling choice processes in addition to judgment processes. Assumptions underlying the original and our extension are discussed and the new method is applied in an analysis of residential choice behavior.