Multivariate Logit and Probit models for simultaneous purchases: Presentation,uses,appeal and limitations

Abstract

This article presents Multivariate Logit (MVL) and Probit (MVP) models, which make it possible to analyse simultaneous purchases and relax the restrictive hypothesis that utility maximization leads to a single choice. These models enable a deeper analysis of competitive dynamics in a given category (variety seeking, complementarity, substitutability). The MVL model using a random parameter specification is illustrated in relation to the chocolate category. We underline the advantages and limitations of these models and propose new research avenues.

Keywords

coincidences complementarity cross-effects food products (chocolate)multinomial logit probit multivariate logit probit random parameters simultaneous purchase variety seeking

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