TITLE

The Invariant Proportion of Substitution Property (IPS) of Discrete-Choice Models

AUTHOR(S)
Steenburgh, Thomas J.
PUB. DATE
March 2008
SOURCE
Marketing Science;Mar/Apr2008, Vol. 27 Issue 2, p300
SOURCE TYPE
Academic Journal
DOC. TYPE
Article
ABSTRACT
This article introduces a newly discovered property of discrete-choice models, which I call the invariant proportion of substitution (IPS). Like the independence from irrelevant alternatives (IIA) property, IPS implies individual behavior that is counterintuitive in the context of choice among similar alternatives. But models that alleviate the concerns raised by IIA, such as generalized extreme value and covariance probit models, do not necessarily alleviate the concerns raised by IPS. I explore the implications of the IPS property on individual behavior in several choice contexts and discuss some models that alleviate the concerns raised by IPS.
ACCESSION #
31903689

 

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