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

We examine the assumption of the probabilistic 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, probabilistic consideration holds, but for similar brands a disproportionate number of consumers consider all or non of them. Looking at one specific, well-defined submarket does not alleviate this problem.