Development and estimation of a semi-compensatory model with flexible error structure

Sigal Kaplan (Invited author), Yoram Shiftan (Invited author), Shlomo Bekhor (Invited author)

    Research output: Contribution to conferencePaperResearch

    Abstract

    Semi-compensatory models, representing a sequence of an elimination-based choice set formation and a utility-based choice, show promise in increasing the behavioral realism of discrete choice models by integrating the choice set specification within the representation of the choice process. Alas, a disadvantage of current semi-compensatory models versus compensatory models is their behaviorally non-realistic assumption of an independent error structure. This study proposes a novel semi-compensatory model incorporating a flexible error structure. Specifically, the model represents a sequence of a conjunctive heuristic assuming correlated cut-off thresholds for choice set formation, and a utility-based choice assuming a substitution pattern with a nested structure across alternatives. Mathematically, the model jointly represents the conjunctive heuristic by a multidimensional mixed ordered-response model and the utility-based choice by alternatively (i) a nested-logit model and (ii) an error-component logit. In order to test the suggested methodology, the model was estimated for a sample of 1,893 ranked choices and respective threshold values from 631 students who participated in a web-based two-stage choice experiment of rental apartment choice. The estimated semi-compensatory models were compared to their compensatory counterparts. Results demonstrate the applicability and feasibility of representing flexible substitution patterns with the proposed semi-compensatory model, as well as promote the comprehension of the differences between semi-compensatory and compensatory models.
    Original languageEnglish
    Publication date2009
    Publication statusPublished - 2009
    EventFifth Workshop on Discrete Choice Models - Ecole Polytechnique Federale de Lausanne, Lausanne, Switzerland
    Duration: 1 Jan 2009 → …
    Conference number: 5

    Conference

    ConferenceFifth Workshop on Discrete Choice Models
    Number5
    CityEcole Polytechnique Federale de Lausanne, Lausanne, Switzerland
    Period01/01/2009 → …

    Cite this

    Kaplan, S., Shiftan, Y., & Bekhor, S. (2009). Development and estimation of a semi-compensatory model with flexible error structure. Paper presented at Fifth Workshop on Discrete Choice Models, Ecole Polytechnique Federale de Lausanne, Lausanne, Switzerland, .
    Kaplan, Sigal ; Shiftan, Yoram ; Bekhor, Shlomo. / Development and estimation of a semi-compensatory model with flexible error structure. Paper presented at Fifth Workshop on Discrete Choice Models, Ecole Polytechnique Federale de Lausanne, Lausanne, Switzerland, .
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    abstract = "Semi-compensatory models, representing a sequence of an elimination-based choice set formation and a utility-based choice, show promise in increasing the behavioral realism of discrete choice models by integrating the choice set specification within the representation of the choice process. Alas, a disadvantage of current semi-compensatory models versus compensatory models is their behaviorally non-realistic assumption of an independent error structure. This study proposes a novel semi-compensatory model incorporating a flexible error structure. Specifically, the model represents a sequence of a conjunctive heuristic assuming correlated cut-off thresholds for choice set formation, and a utility-based choice assuming a substitution pattern with a nested structure across alternatives. Mathematically, the model jointly represents the conjunctive heuristic by a multidimensional mixed ordered-response model and the utility-based choice by alternatively (i) a nested-logit model and (ii) an error-component logit. In order to test the suggested methodology, the model was estimated for a sample of 1,893 ranked choices and respective threshold values from 631 students who participated in a web-based two-stage choice experiment of rental apartment choice. The estimated semi-compensatory models were compared to their compensatory counterparts. Results demonstrate the applicability and feasibility of representing flexible substitution patterns with the proposed semi-compensatory model, as well as promote the comprehension of the differences between semi-compensatory and compensatory models.",
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    year = "2009",
    language = "English",
    note = "Fifth Workshop on Discrete Choice Models ; Conference date: 01-01-2009",

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    Kaplan, S, Shiftan, Y & Bekhor, S 2009, 'Development and estimation of a semi-compensatory model with flexible error structure' Paper presented at Fifth Workshop on Discrete Choice Models, Ecole Polytechnique Federale de Lausanne, Lausanne, Switzerland, 01/01/2009, .

    Development and estimation of a semi-compensatory model with flexible error structure. / Kaplan, Sigal (Invited author); Shiftan, Yoram (Invited author); Bekhor, Shlomo (Invited author).

    2009. Paper presented at Fifth Workshop on Discrete Choice Models, Ecole Polytechnique Federale de Lausanne, Lausanne, Switzerland, .

    Research output: Contribution to conferencePaperResearch

    TY - CONF

    T1 - Development and estimation of a semi-compensatory model with flexible error structure

    AU - Kaplan, Sigal

    AU - Shiftan, Yoram

    AU - Bekhor, Shlomo

    PY - 2009

    Y1 - 2009

    N2 - Semi-compensatory models, representing a sequence of an elimination-based choice set formation and a utility-based choice, show promise in increasing the behavioral realism of discrete choice models by integrating the choice set specification within the representation of the choice process. Alas, a disadvantage of current semi-compensatory models versus compensatory models is their behaviorally non-realistic assumption of an independent error structure. This study proposes a novel semi-compensatory model incorporating a flexible error structure. Specifically, the model represents a sequence of a conjunctive heuristic assuming correlated cut-off thresholds for choice set formation, and a utility-based choice assuming a substitution pattern with a nested structure across alternatives. Mathematically, the model jointly represents the conjunctive heuristic by a multidimensional mixed ordered-response model and the utility-based choice by alternatively (i) a nested-logit model and (ii) an error-component logit. In order to test the suggested methodology, the model was estimated for a sample of 1,893 ranked choices and respective threshold values from 631 students who participated in a web-based two-stage choice experiment of rental apartment choice. The estimated semi-compensatory models were compared to their compensatory counterparts. Results demonstrate the applicability and feasibility of representing flexible substitution patterns with the proposed semi-compensatory model, as well as promote the comprehension of the differences between semi-compensatory and compensatory models.

    AB - Semi-compensatory models, representing a sequence of an elimination-based choice set formation and a utility-based choice, show promise in increasing the behavioral realism of discrete choice models by integrating the choice set specification within the representation of the choice process. Alas, a disadvantage of current semi-compensatory models versus compensatory models is their behaviorally non-realistic assumption of an independent error structure. This study proposes a novel semi-compensatory model incorporating a flexible error structure. Specifically, the model represents a sequence of a conjunctive heuristic assuming correlated cut-off thresholds for choice set formation, and a utility-based choice assuming a substitution pattern with a nested structure across alternatives. Mathematically, the model jointly represents the conjunctive heuristic by a multidimensional mixed ordered-response model and the utility-based choice by alternatively (i) a nested-logit model and (ii) an error-component logit. In order to test the suggested methodology, the model was estimated for a sample of 1,893 ranked choices and respective threshold values from 631 students who participated in a web-based two-stage choice experiment of rental apartment choice. The estimated semi-compensatory models were compared to their compensatory counterparts. Results demonstrate the applicability and feasibility of representing flexible substitution patterns with the proposed semi-compensatory model, as well as promote the comprehension of the differences between semi-compensatory and compensatory models.

    M3 - Paper

    ER -

    Kaplan S, Shiftan Y, Bekhor S. Development and estimation of a semi-compensatory model with flexible error structure. 2009. Paper presented at Fifth Workshop on Discrete Choice Models, Ecole Polytechnique Federale de Lausanne, Lausanne, Switzerland, .