On the Distinction between Consideration and Utility

Abstract

Models of consumer decision making often condition on attention to the different offers or alternatives to choose from. However, in many environments offers not only compete through their utility but also for the attention of decision makers. In this case, it is important to distinguish between attention and utility - it makes a difference whether an offering is overlooked, or rejected conditional on awareness - for optimal marketing control and empirical measures of competition. We show how discrete-continuous choices, in contrast to multinomial choices, facilitate the empirical distinction between attention and utility, and more generally the identification of two-stage decision models. In our illustrative application we analyze choices from simulated store shelves. We find that the number of facings of a brand on the shelf influence attention to, but not utility from the brand. We then formulate a parametric model that identifies attention based considerations sets and document clearly misleading inferences from a model that ignores attention and motivates choices from utility only.