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Discrete choice with large choice sets

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  • Bordley, Robert

Abstract

Modeling product demand with discrete choice models requires specifying how all competing products rate on various attributes, which becomes difficult when the choice set is large. As a result, this paper approximates the ratings for the various product offerings with a parameterized distribution. When applied to the mixed multinomial logit model with a Gaussian parameterized distribution, this leads to an easily estimable, ‘anti-ideal point’ choice model.

Suggested Citation

  • Bordley, Robert, 2013. "Discrete choice with large choice sets," Economics Letters, Elsevier, vol. 118(1), pages 13-15.
    • Handle: RePEc:eee:ecolet:v:118:y:2013:i:1:p:13-15
    DOI: 10.1016/j.econlet.2012.05.010
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    References listed on IDEAS

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    1. K. Sudhir, 2001. "Competitive Pricing Behavior in the Auto Market: A Structural Analysis," Marketing Science, INFORMS, vol. 20(1), pages 42-60, January.
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    3. Hansen, Eric R., 1987. "Industrial location choice in Sao Paulo, Brazil : A nested logit model," Regional Science and Urban Economics, Elsevier, vol. 17(1), pages 89-108, February.
    4. K. Sudhir, 2001. "Competitive Pricing Behavior in the US Auto Market: A Structural Analysis," Yale School of Management Working Papers ysm228, Yale School of Management.
    5. John M. Quigley, 1976. "Housing Demand in the Short Run: An Analysis of Polytomous Choice," NBER Chapters, in: Explorations in Economic Research, Volume 3, number 1, pages 76-102, National Bureau of Economic Research, Inc.
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    Cited by:

    1. Lu, Zhentong & Shi, Xiaoxia & Tao, Jing, 2023. "Semi-nonparametric estimation of random coefficients logit model for aggregate demand," Journal of Econometrics, Elsevier, vol. 235(2), pages 2245-2265.

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