Modeling the Intrahousehold Behavioral Interaction

Quantitative models in marketing typically focus on the household as the unit of analysis while ignoring the individual family members' behavior and the behavioral interactions among household members. However, knowledge of such intrahousehold behavioral interaction enables marketers to target their communications more effectively. In this article, the authors propose a modeling framework to capture the intrahousehold behavioral interaction based on family members' actual consumption behavior over time. The authors develop a model to capture multiple agents' (more than two individuals') simultaneous choice decisions over more than two choice alternatives. This is extremely difficult with other previously developed modeling approaches. The authors apply the proposed model to a context of family members' television viewing and simultaneously model whether the television is on, which type of program is playing, and which family members are watching. The proposed model makes it possible to estimate the individual's intrinsic preference and the extrinsic preference from a joint consumption with other members. In turn, these estimates enable the authors to test several alternative group decision-making heuristics that may operate in those joint consumption occasions and to conduct managerially useful counterfactual simulations.