On substitutability and complementarity in discrete choice models
In this paper, we propose the concepts of substitutability and complementarity in discrete choice models. These concepts concern whether the choice probability of one alternative in a choice model increases or decreases with the utility of another alternative, and they play important roles in captur...
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| Main Authors: | , , |
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| Format: | text |
| Language: | English |
| Published: |
Institutional Knowledge at Singapore Management University
2018
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| Subjects: | |
| Online Access: | https://ink.library.smu.edu.sg/lkcsb_research/6499 https://ink.library.smu.edu.sg/context/lkcsb_research/article/7498/viewcontent/Substitutability_Complementarity_DCM_sv.pdf |
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| Institution: | Singapore Management University |
| Language: | English |
| Summary: | In this paper, we propose the concepts of substitutability and complementarity in discrete choice models. These concepts concern whether the choice probability of one alternative in a choice model increases or decreases with the utility of another alternative, and they play important roles in capturing certain practical choice patterns, such as the halo effect. We study conditions on discrete choice models that will lead to substitutability and complementarity. We also present ways of constructing choice models that exhibit complementary property. |
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