State dependence and alternative explanations for consumer inertia

• 成果类型: Article
• 署名作者: Dube, Jean-Pierre; Hitsch, Guenter J.; Rossi, Peter E.
• 署名单位: University of Chicago; National Bureau of Economic Research; University of California System; University of California Los Angeles
• 刊物名称: RAND JOURNAL OF ECONOMICS
• ISSN/ISSBN: 0741-6261
• DOI: 10.1111/j.1756-2171.2010.00106.x
• 发表日期: 2010
• 页码: 417-445
• 关键词: DECISION-MAKING; choice dynamics; switching costs; brand choice; uncertainty; COMPETITION; inference; MARKETS; models

摘要

For many consumer packaged goods products, researchers have documented inertia in brand choice, a form of persistence whereby consumers have a higher probability of choosing a product that they have purchased in the past. We show that the finding of inertia is robust to flexible controls for preference heterogeneity and not due to autocorrelated taste shocks. We explore three economic explanations for the observed structural state dependence: preference changes due to past purchases or consumption experiences which induce a form of loyalty, search, and learning. Our data are consistent with loyalty, but not with search or learning. This distinction is important for policy analysis, because the alternative sources of inertia imply qualitative differences in firm's pricing incentives and lead to quantitatively different equilibrium pricing outcomes.