Testing for Probabilistic Independence in Consideration of Ready-to-Eat Cereals

Testing for Probabilistic Independence in Consideration of Ready-to-Eat Cereals

1992Working Paper No. 1208

We examine the assumption of the probabislitc independence of consideration of different brands in the marketplace for a market with substantial product differentiation. Our hypothesis is that probabilistic independence may not hold in such a market and the degree to which groups of brands violate this assumption is dependent on their perceptual similarity. In the market we examine, we find support for this hypothesis. For dissimilar products, probabilitic consideration holds, but for similar brands a disaproportionate number of consumers consider all or non of them. Looking at one specific, well-defined submarket does not alleviate this problem.