Choice modelling | Econometric modeling

Choice modelling

Choice modelling attempts to model the decision process of an individual or segment via revealed preferences or stated preferences made in a particular context or contexts. Typically, it attempts to use discrete choices (A over B; B over A, B & C) in order to infer positions of the items (A, B and C) on some relevant latent scale (typically "utility" in economics and various related fields). Indeed many alternative models exist in econometrics, marketing, sociometrics and other fields, including utility maximization, optimization applied to consumer theory, and a plethora of other identification strategies which may be more or less accurate depending on the data, sample, hypothesis and the particular decision being modelled. In addition, choice modelling is regarded as the most suitable method for estimating consumers' willingness to pay for quality improvements in multiple dimensions. (Wikipedia).

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If you are interested in learning more about this topic, please visit http://www.gcflearnfree.org/ to view the entire tutorial on our website. It includes instructional text, informational graphics, examples, and even interactives for you to practice and apply what you've learned.

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From playlist Thematic Program on Stochastic Modeling: A Focus on Pricing & Revenue Management​

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Zermelo Fraenkel Choice

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Related pages

Choice set | Orthogonality | Utility | Design of experiments | Multinomial logistic regression | Discrete choice | Consumer choice | Likert scale | Ordinal data | Normal distribution | Econometrics | Conjoint analysis | Best–worst scaling | Latin square