MULTIOBJECTIVE CONSUMER CHOICE MODELLING BASED ON DEPENDING-ON-CONTEXT PREFERENCE Presenting author: Evgenij Ozhegov NRU HSE - Perm Dept. of Applied mathematics. - презентация

1 MULTIOBJECTIVE CONSUMER CHOICE MODELLING BASED ON DEPENDING-ON-CONTEXT PREFERENCE Presenting author: Evgenij Ozhegov NRU HSE - Perm Dept. of Applied mathematics and social system modelling MCDM 2011,

2 Outline Generalization of the knowledge about recent consumer choice modelling approaches; Consideration of particular models; Formulating of the multiobjective problem of consumer choice; Empirical issue of using such model. 2

3 Structure of consumer choice models By the number of consumers models are divided on: Individual demand models Aggregated demand models In terms of time factor: Static models Dynamic models By the number of consumer choice criteria: Singlecriterion models Multicriteria models By the homogeneity of the products: Models with homogeneous products Models with heterogeneous products 3

4 Classical rational demand 4

5 5

6 Why this model cannot be used? 6

7 Particular models 7

8 Multicriteria consumer choice problem (*) 8

9 Solution concept using the method of criteria weighting 9

10 How to use that model? Why in different context we see different behavior (except for different )? Because of the different weights of the criteria during the time! 10

11 Dynamical case (**) 11

12 Dynamical case (**) 12

13 Fixing the consumtion effects 13

14 Fixing the consumption effects 14

15 Empirical issue: Giffen effect to buckwheat The prices for the buckwheat rose from 45 rubles per kg to 140 in summer 2010; There was unreasonably high demand for the buckwheat under the Giffen effect; The sample contained 888 observations of the consumers from to (111 days, 8 random consumers in each day) in big retail store; Known the amount of buckwheat bought, the price for 1 kg, expenditure and the weighted price level for each product set. 15

16 Empirical issue: Giffen effect to buckwheat 16

17 Empirical issue: Giffen effect to buckwheat 17

18 The best model: 2 criteria 18 Price for buckwheat

19 The best model: predicting power 19 Price for buckwheat

20 THANK YOU FOR THE ATTENTION! Your questions 20

21 References 1. Бусыгин В.П., Желободько Е.В., Цыплаков А.А. Микроэкономика – третий уровень. Новосибирск: Новосибирский государственный университет, Ожегов Е.М.. Моделирование потребительского выбора нетранзитивными предпочтениями, Сборник материалов XIII Международной научно-практической конференции «Актуальные вопросы экономических наук», Новосибирск, 2010, c Подиновский В.В. Анализ и поддержка решений. Введение в теорию важности критериев в многокритериальных задачах принятия решений, Москва, Физматлит, В. В. Подиновский, В. Д. Ногин. Парето-оптимальные решения многокритериальных задач, Москва, ФИЗМАТЛИТ, Ariel Rubinstein: Lecture Notes in Microeconomic Theory, Princeton University Press, Frederick Shane, George Loewenstein and Ted O'Donoghue. Time Discounting and Time Preference: A Critical Review. Journal of Economic Literature. Vol. 40, No. 2, 2002, pp Frank M. Bass, A New Product Growth for Model Consumer Durables, Management Science, Vol. 15, No. 5, 1989, pp James Dyer. Multiple Criteria Decision Analysis: State of the Art Surveys, International Series in Operations Research & Management Science, 2005, Volume 78, IV, W. J. Shafer. The Nontransitive Consumer, Econometrica 42, 1974: 913–