Business Commons^™

A Direct Utility Model With Dynamic Constraint, Byungyeon Kim, Takuya Satomura, Jaehwan Kim

Asia Marketing Journal

The goal of the study is to understand how consumers’ constraint as opposed to utility structure gives rise to final decision when consumers purchase more than one variant of product at a time, i.e., horizontal variety seeking or multiple-discreteness. Purchase and consumption decision not only produces utility but also involves some sort of cognitive pressure. Past consumption or last purchase is likely to be linked to this burden we face such as concern for obesity, risk of harm, and guilt for mischief. In this research, the existence and the role of dynamic constraint are investigated through a microeconomic utility model …