A Model of Balanced Choice Behavior

In some product categories, consumers appear to alternate among items in a consistent and purposeful, though not entirely deterministic, fashion. Such alternation occurs even in the absence of any apparent external influence on choice. We present a theory and develop a model to explain such behavior, labeled balanced choice behavior. The theory holds that the variability in individual choice stems partly fro the need to balance current consumption according to the impact of past consumption. The model specification yields a logit model which is calibrated cross-sectionally on consumption histories. The approach relates the parameters of the model to measures of individual behavior, permitting insight into individual varied choice. The model is calibrated and tested using data on soft drink consumption. In this context, th model compares favorably to certain existing models of brand choice on the basis of fit and predictive ability.