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Alternative Cost Specification in Economic Models of Choice

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2022, Doctor of Philosophy, Ohio State University, Business Administration.
Consumers face monetary and non-monetary costs when purchasing goods. Non-monetary costs take different forms beyond money that constrain consumer demand. For example, if the performance of choice outcomes are uncertain, consumers worry that their choices may not be optimal and the associated anticipated regret may constrain the demand. In other cases, experience goods require consumers to provide time to be utility producing, and consumers often find themselves short on the resource. In this dissertation, we extend the existing standard models of choice that maximize utility to the ones that incorporate non-monetary costs including anticipated regret and perceived time cost. We develop the cost functions grounded on economic theory and integrate them into the standard utility maximization framework. The integration helps us to understand how consumers make decisions better, but leads to several methodological and computational challenges in model estimation, for which we also make contribution by addressing the issues. The proposed demand models are applied to a variety of choice settings where the existence of non-monetary constraints is plausible, and the empirical results find that the models fit the data better, show greater predictive performances, and lead to different managerial implications than the existing standard models.
Greg Allenby (Advisor)
Hongshuang Li (Committee Member)
Dong Soo Kim (Committee Member)
118 p.

Recommended Citations

Citations

  • Hur, T. (2022). Alternative Cost Specification in Economic Models of Choice [Doctoral dissertation, Ohio State University]. OhioLINK Electronic Theses and Dissertations Center. http://rave.ohiolink.edu/etdc/view?acc_num=osu164934493681794

    APA Style (7th edition)

  • Hur, Taegyu. Alternative Cost Specification in Economic Models of Choice. 2022. Ohio State University, Doctoral dissertation. OhioLINK Electronic Theses and Dissertations Center, http://rave.ohiolink.edu/etdc/view?acc_num=osu164934493681794.

    MLA Style (8th edition)

  • Hur, Taegyu. "Alternative Cost Specification in Economic Models of Choice." Doctoral dissertation, Ohio State University, 2022. http://rave.ohiolink.edu/etdc/view?acc_num=osu164934493681794

    Chicago Manual of Style (17th edition)