Albers, Sönke and Klaus Brockhoff

A comparison of two approaches to the optimal positioning of a new product in an attribute space

Zeitschrift für Operations Research, 23 (3): 142-127, (1979).

Copy reference link   DOI: 10.1007/BF01951547

Abstract: This paper is concerned with the optimal positioning of a new product in an attribute space. A deterministic optimization model that relies on the axiom of choice is compared with the model byShocker/Srinivasan [1974] that incorporates a probabilistic measure of choice. Investigating the assumptions and the construction of both models, it is shown that the probability function byShocker/Srinivasan is based on a controversial assumption and incorporates a parameter that has not been given an economic explanation. Furthermore, both models are applied to complex configurations. It is demonstrated that the optimal positions for the new product resulting from the model byShocker/Srinivasan depend heavily on the parameter just mentioned and may run contrary to plausible consequences of the axiom of choice.

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