Formal Models of Consumer Behavior: A Conceptual Overview

In the last ten years, there has been a great increase in building formal models of consumer behavior. By formal models we mean those models with an explicit structure, normally either mathematical or computer, as opposed to verbal models. These models have proliferated very rapidly and exist in a bewildering array of forms. The purpose of this paper is to give an overview of the field of formal consumer models and provide a framework for understanding the field and placing the many model types in perspective. Accordingly, the paper is much more conceptual than technical in nature. We start by outlining a rough classification of model types, and describing these types. Next, the conceptual bases of the various model types are discussed and compared. This discussion considers such topics as the general world view of the modelers, necessary data properties, individual differences and aggregation, and model uses. Potentially useful interactions between model types are then discussed. Finally, prospects and problems for each model type are considered, and overall conclusions are drawn.