Research

Working Papers

  • Bridging between hypothetical and incentivized choice (Job market paper)
    Arash Laghaie, Thomas Otter (2021)

Abstract:


The hypothetical nature of choices collected in typical discrete choice experiments (DCEs) for market research has been a source of concern for both researchers in academia and industry. To the extent that processing the information in choice sets requires effort, classical economic theory questions the external validity of inferences from standard hypothetical (HYP) choices as elicited in market research. Recent studies in marketing indeed demonstrate increased external validity of inferences from choices that are properly incentivized (ICA). However, these studies model the difference between HYP and ICA data collected from the same population as if preferences change. Together, the classical economists’ critique of inference from HYP-DCEs and the notion of changing preferences has led to ignoring the information in HYP data when ICA data are available. In this paper we propose a model that links the information in HYP and ICA data collected in the same population. The model we propose is in the class of sequential-sampling models of choice and assumes that ICA leads respondents to increase their decision effort relative to the standard HYP market research setting, but subject to the same set of “deep” preference parameters. We show that increased amounts of cognitive processing under incentive-alignment materially and plausibly change choice probabilities and outcomes in our model, even if underlying, deep preference parameters are invariant. Our model yields a framework that parsimoniously bridges between data from HYP-DCEs and data from ICA-DCEs that potentially decreases data collection cost at the same level of external predictive validity.

  • Measuring evidence for mediation in the presence of measurement error (Revise & Resubmit at Journal of Marketing Research)
    Arash Laghaie, Thomas Otter (2020)
    [
    Paper ] [ R Package ]

Abstract:

Mediation analysis empirically investigates the process underlying the effect of an experimental manipulation on a dependent variable of interest. In the simplest mediation setting, the experimental treatment can affect the dependent variable through the mediator (indirect effect) and/or directly (direct effect). Recent methodological advances made in the field of mediation analysis aim at developing statistically reliable estimates of the indirect effect of the treatment on the outcome. However, what appears to be an indirect effect through the mediator may reflect a data generating process without mediation, regardless of the statistical properties of the estimate. To overcome this indeterminacy where possible, we develop the insight that a statistically reliable indirect effect combined with strong evidence for conditional independence of treatment and outcome given the mediator is unequivocal evidence for mediation (as the underlying causal model generating the data) into an operational procedure. Our procedure combines Bayes factors as principled measures of the degree of support for conditional independence, i.e., the degree of support for a Null hypothesis, with latent variable modeling to account for measurement error and discretization in a fully Bayesian framework. We illustrate how our approach facilitates stronger conclusions by re-analzing a set of published mediation studies.

Work in Progress

  • Discrete choice in marketing through the lens of rational inattention
    Matteo Fina, Johannes Kasinger, Arash Laghaie, Sergey Turlo, Thomas Otter

  • Greenwashing susceptibility
    Sara Nieß, Arash Laghaie, Torsten Bornemann

  • Estimating decision models with intractable likelihood using Pseudo-Marginal MCMC and data augmentation
    Arash Laghaie

Abstract:


Using process models to make inference about choice data is a longstanding tradition in psychology. In recent years these models have gained prominence in economics because they can incorporate measures other than choice to inform preferences and, unlike traditional economic choice models, their interpretation of stochasticity in choice goes beyond mathematical convenience. However, these models often suffer from an intractable likelihood that makes their estimation infeasible. In this paper I propose a procedure based on the Pseudo-Marginal MCMC method to estimate the dependent Poisson race model and implement it using a parallelized algorithm. I also develop a data-augmentation method to estimate the rates of evidence accumulation, conditional on the threshold parameter. Using simulated data, I show that the inference tools developed in this paper practicably estimate the model parameters in multi-alternative decision, where direct computation of the model likelihood is infeasible.