Analyzing Consumer Response to Innovation the Concept of Preference Inertia
Analyzing Consumer Response to Innovation the Concept of Preference Inertia
Scott a Neslin
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We should also compare our results with utility theory. The concept of risk aversion may be similar to preference inertia in its consequences if not in its basic conceptualization. One could compare risk averseness of individuals with their propensities for preference inertia. We should note the differences between risk aversion and preference inertia. Risk aversion occurs along dimen- sions, while preference inertia is more of a risk aversion to change. Different programs can elicit different ...degrees of inertia. This can not happen with risk aversion, which affects two plans with equivalent dimensional ratings equally. Mauser and Urban [13J have recently completed a study in which utility functions were directly assessed for a random student sample from MIT in connection with the same study of HMO development for MIT. These utility functions predict preference share well. There is then a good opportunity to compare utility theory with preference inertia. There is also more work to be done in modeling the consumer preference process.
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