AN EMPIRICAL ANALYSIS ON THE EXPANSION PROCESS OF CHOICE SET INTEGRATING INFORMATION SEARCH APPROACH AND COST-BENEFIT APPROACH

Abstract

This paper reports an empirical investigation on the expansion process of choice set integrating the information search approach and the cost-benefit approach. We hypothesized that the arising of interests in new alternative needs both initiative information search and considerable expected benefit. The latent mixture distribution structure equation models are developed and verified by a data set containing shopping behavior and attitudes. The results supported our hypothesis, suggesting that a lower satisfaction with the current set will incite external information search for all subjects, and that a higher expected benefit of expanding the choice set could induce a higher interest in new alternatives only when the considerable external information search was activated.