Keita Kinjo

Paradox of choice and consumer nonpurchase behavior

This paper theoretically analyzes the so-called paradox of choice, introduced by Schwartz (The paradox of choice: why more is less, Harper Perennial, New York, 2004), which posits that having too many choices can make us unhappy. Although one’s possibilities broaden as the number of choices increases, the paradox of choice occurs because among a greater number of possibilities, making the best choice entails a greater number of complications and incurs higher choice costs. The purpose of this paper is to focus on a specific example of this paradox with respect to consumer nonpurchase behavior, in order to derive the optimal strategy for a firm selling goods or services for consumer purchase. In particular, in constructing a decision-making model by which to ascertain the optimal product quantity (variety) for a firm within the context of the paradox of choice, we can derive the number of product offerings needed to maximize sales. We point out that it is important for a firm to consider nonpurchase behavior. The optimal quantity is inversely proportionate to the consumer’s complications and choice costs in making a choice.

A Pricing Strategy with Consumption Externality when the Reference Group is Large

This paper provides an analysis of firms’ optimal prices when individual utility exhibits both material and other consumer effects. We construct a model and conduct an analysis in the following four steps: (1) By using a conjoint analysis of data, we set up a hierarchical Bayesian model and estimate its parameters, which are composed of individual utility functions. (2) We calculate the number of sales in each time period and derive the total sales throughout the given period. (3) We estimate the demand functions in the presence and absence of consumption externalities. (4) Finally, we calculate the profit functions and derive the optimal prices taking into account various product attributes. By applying our analysis to the book market of Japan, we find that the optimal price is lower when an externality is present than when absent. The intuition behind this result is that pricing low and selling a large number of books from an early stage increases the externality effect, yielding a higher profit for firms.

Case-based decision model matches ideal point model:: Application to marketing decision support system

This paper studies the relationship between a case-based decision theory (CBDT) and an ideal point model (IPM). We show that a case-based decision model (CBDM) can be transformed into an IPM under some assumptions. This transformation can allow us to visualize the relationship among data and simplify the calculations of distance between one current datum and the ideal point, rather than the distances between data. Our results will assist researchers with their product design analysis and positioning of goods through CBDT, by revealing past dependences or providing a reference point. Furthermore, to check whether the similarity function, presented in the theoretical part, is valid for empirical analysis, we use data on the viewing behavior of audiences of TV dramas in Japan and compare the estimation results under the CBDM that corresponds to a standard decision model with similarities and other various similarity functions and without a similarity function. Our empirical analysis shows that the CBDM with a similarity function, presented in this study, best fits the data.

An Advertising Strategy Using Consumption Externality and Forgetting in the Case of Japanese Electronic Books

We construct a two-period model in which a consumer recognizes the existence of goods after advertised by firms, and total sales of the first period affect the utility of each consumer’s purchase in the second period, indicating a consumption externality. Some consumers see advertisements in the first period and remember the product, whereas some forget the product in the second period. We show that the advertising volume changes given the differences in the forgetting rate. In particular, we apply our method to the data on Japan’s electronic books obtained through a conjoint analysis survey to clarify that a better strategy is to sell a product to a small number of people at a low price or to lower the price to a certain level during the early period, and then to sell the product to a specific consumer segment at a higher price after reflecting the externality.

On Skill Acquisition Support by Analogical Rule Abduction

This paper describes our development of analogical abduction as an extension to our work on meta level abductive reasoning for rule abduction and predicate invention. Previously, we gave a set of axioms to state the object level causalities in terms of first-order-logic (FOL) clauses, which represent direct and indirect causalities with transitive rules. Here we extend our formalism of the meta level abductive reasoning, by adding rules to conduct analogical inference. We have applied our analogical abduction method to the problem of explaining the difficult cello playing techniques of spiccato and rapid cross strings of the bow movement. Our method has constructed persuasive analogical explanations about how to play them. We have used a model of forced vibration mechanics as the base world for spiccato, and the specification of the skeletal structure of the hand as the basis for the cross string bowing technique. We also applied analogical abduction to show the effectiveness of a metaphorical expression of “eating pancake on the sly” to achieve forte-piano dynamics, and successfully created an analogical explanation of how it works.

Optimal program for autonomous driving under Bentham- and Nash-type social welfare functions

Abstract The purpose of this paper is to formally define and solve ethical problems of how an artificial vehicle (AV) determines its driving behavior when there are some passengers in the AV and some pedestrians on a street. We construct a mathematical model introducing mainly two Bentham- and Nash-types social welfare functions, and derive optimal solutions. We show the optimal solutions are completely different depending on the functions and their parameters. Our contribution is that policymakers or managers of AVs can discuss the problem and determine an algorithm for autonomous driving by formalizing the situation and offering the optimal solutions.

Consumer confusion from price competition and excessive product attributes under the curse of dimensionality

The purpose of our study is to (i) investigate the effects of the number of products, product attributes, and prices on consumer confusion, (ii) conduct a numerical analysis to check the robustness of the results, and (iii) present an example of the cell phone market in Japan. Following an ideal point model and embedding the number of products and product attributes, we clarify how these factors affect consumer confusion and purchase probability. We show that as the number of product attributes increases, the choice probability of each product becomes equal, implying that consumer confusion occurs. This result is robust to the introduction of prices as strategic variables.

Predicting Empirical Patterns in Viewing Japanese TV Dramas Using Case-Based Decision Theory

This article empirically analyzes consumer behavior of viewing TV dramas using case-based decision theory. The theory addresses an economic situation with structural ignorance, where states of the world are not naturally given nor simply formulated for a decision-maker. Under this theory, consumers make decisions based on subjective evaluations of previous purchases for similar goods. Our empirical analysis is concerned with viewing decisions on getsuku, the Japanese TV dramas broadcast at 9 pm Monday by the Fuji Television Network. The regularity of the schedule and the long-sustaining popularity of the program enable us to easily collect consumer data. Then, we conduct a web survey of individual audiences on subjective evaluations of previously watched dramas. For our empirical analysis, we utilize a simple linear model of the case-based model that allows the incorporation of flexible inference techniques. Our results demonstrate better performance of the case-based models than models based on traditional expected utility theory regarding both statistical model selection and one-step-ahead prediction. We also reveal that the successful performance of the case-based model in our analysis depends on the availability of individual subjective evaluations and that it is difficult to replace the individual-specific information using demographic information and aggregate data.

The Cognitive Role of Analogical Abduction in Skill Acquisition

In this paper, we discuss the cognitive role of analogical abduction in skill acquisition. Abductive inference makes it possible to find missing links that explain a given knack in achieving a skillful task. We introduced meta level abduction to realize rule abduction which is mandatory in finding intermediate missing links to be added in knack explanation. Analogical abduction can be achieved by adding analogical inference rules to causality rules within meta level abduction. We have applied our analogical abduction method to the problem of explaining the difficult cello playing techniques of spiccato and rapid cross strings of the bow movement. Our method has constructed persuasive analogical explanations about how to play them. We have used a model of forced vibration mechanics as the analogy base world for spiccato, and the specification of the skeletal structure of the hand as the basis for the cross string bowing technique. We also have applied analogical abduction to show the effectiveness of a metaphorical expression of “eating pancake on the sly” to achieve forte-piano dynamics, and successfully identified an analogical explanation of how it works. Through these examples, we show the effectiveness of analogical abduction in skill acquisition. Furthermore we discuss the importance of meta level representation as a basis for providing rich human cognitive paradigm such as causality, analogy and metaphor. Finally we propose a cognitive architecture which gives a possible structure for realizing accommodation on our analogical abduction schema.