Modeling Inertia and Variety Seeking Tendencies in Brand Choice Behavior

Theories of exploratory behavior suggest that inertia and variety-seeking tendencies may coexist within the individual, implying that the same individual may exhibit inertia and variety-seeking at different times depending on his/her choice history. Past research has not allowed for such within-consumer variability in these tendencies. The purpose of this study is to present a choice model that allows us to identify such "hybrid" behavior (i.e., a mixture of inertia and variety-seeking), and to distinguish hybrid behavior from simpler types of behavior such as pure inertia, pure variety-seeking and zero-order behavior. The model is estimated at the household level using panel data for three product classes, covering a total of 1069 households. The empirical analysis shows that more than half the households analyzed exhibited hybrid behavior rather than simpler types of behavior.