Simple Models of Discrete Choice and Their Performance in Bandit Experiments
| Autor: | George Knox, Rachel Croson, Noah Gans |
|---|---|
| Přispěvatelé: | Research Group: Marketing, Department of Marketing |
| Rok vydání: | 2007 |
| Předmět: |
Choice set
Mathematical optimization Discrete choice Service quality Management science Heuristic Strategy and Management media_common.quotation_subject Consumer choice Management Science and Operations Research Competition (economics) Bernoulli's principle Loyalty Economics service quality multiarmed bandit decision-making under uncertainty discrete-choice models experimental tests media_common |
| Zdroj: | Tilburg University-PURE Manufacturing and Service Operations Management, 9(4), 383-408. INFORMS Inst.for Operations Res.and the Management Sciences |
| ISSN: | 1526-5498 1523-4614 |
| DOI: | 10.1287/msom.1060.0130 |
| Popis: | Recent operations management papers model customers as solving multiarmed bandit problems, positing that consumers use a particular heuristic when choosing among suppliers. These papers then analyze the resulting competition among suppliers and mathematically characterize the equilibrium actions. There remains a question, however, as to whether the original customer models on which the analyses are built are reasonable representations of actual consumer choice. In this paper, we empirically investigate how well these choice rules match actual performance as people solve two-armed Bernoulli bandit problems. We find that some of the most analytically tractable models perform best in tests of model fit. We also find that the expected number of consecutive trials of a given supplier is increasing in its expected quality level, with increasing differences, a result consistent with the models' predictions as well as with loyalty effects described in the popular management literature. |
| Databáze: | OpenAIRE |
| Externí odkaz: |
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