Welfare calculations in discrete choice models when anticipated and experienced attributes differ: A guide with examples. (September 2015)

• Record Type: Journal Article
• Authors: Train, Kenneth
• Is Part Of: Journal of choice modelling. Volume 16(2015)
• Page Start: 15
• Page End: 22
• Publication Date: 2015-09
• Subjects: Decision making -- Periodicals; Social choice -- Periodicals; Decision making; Social choice; Periodicals; 302.13
• DOI: 10.1016/j.jocm.2015.09.003
• Languages: English
• ISSNs: 1755-5345

Abstract

Abstract: The attributes that consumers anticipate or expect when choosing among alternatives (i.e., prior to consumption) often differ from the attributes that they actually experience when consuming their chosen alternative. This paper describes, and illustrates with several examples, the calculation of consumer surplus in this situation and the loss in consumer surplus due to the imperfect foreknowledge about attributes. The procedures are useful in many settings, such as the assessment of damages for false advertising and the analysis of informational policies.