Multiple goals-based choice: the evolution from homo economicus to homo aptabilis

Author(s)

Luís Eduardo Pilli

• Document type: Doctoral Thesis
• Press: São Paulo.
• Institution: Universidade de São Paulo (USP). Faculdade de Economia, Administração e Contabilidade
• Defense date: 12 set. 2017

Examining board members

Jose Afonso Mazzon; Eduardo Bittencourt Andrade; Rafael de Vasconcelos Xavier Ferreira; Carlos Alberto de Braganca Pereira; Joffre Dan Swait Junior

• Advisor: Jose Afonso Mazzon

Abstract

Choices are the means for individuals and consumers to attain their goals. They are the objects of study for several disciplines and I relied on three of them to develop this thesis. Normative models from economicsdefining the homo economicus, descriptive models from behavioral decision theories that forge the homo aptabilis, able to adaptively pursue multiple goals through choices. And discrete-choice econometric models that allow the use and testing of behavioral theories using flexible and realistic methods. The central argument of this thesis is that econometric models should consider the heterogeneity of individual behavior throughout the choice process, including consumer goals, decision strategies, choice set formation, and preferences. Failure to recognize this complexity in the choice process produces false models, capturing process heterogeneity at the level of preferences, and inducing organizations to make the wrong decisions. To develop this argument, this thesis is organized into three sections. In the first one, I review the literature focusing on the different levels of the choice process where the heterogeneity manifests itself and I relate the choice models to the behavioral decision theories. In the second section, a study is developed on the biases caused when heterogeneity in the choice set formation is not accounted for. Through Monte Carlo experiments it has been proven that the parameters of econometric choice models are generally biased, leading to misleading estimates of brands choice probabilities and of attribute\'schoice elasticities. These results are used to motivate a game theoretical approach that results in far-fetched equilibrium from the point of view of business results. Finally, in the third section, a discrete choice model based on multiple meta-goals and on different individual choice processes is developed. One more Monte Carlo experiment proves that the model is capable of retrieving the parameters of the data-generating process. The model, besides recognizing the existence of several meta-objectives that activate different behavioral rules, also allows studying the adaptation of the consumer choice process as a response to context, situation, and individual variables. The model articulates econometric models with behavioral decision theories and supports the understanding of the homo aptabilis. (AU)

• FAPESP's process: 15/03862-9 - Consumers choice consistency as a result of information load variation in the decision environment
• Grantee: Luis Eduardo Pilli
• Support type: Scholarships in Brazil - Doctorate