Effect of social influence on consumer choice behavior using a sequential stated choice experiment: A study of city trip itinerary choice

This paper introduces a model that captures the effect of social influence on individual choice behavior. The suggested model shares with previous models the idea to add a term to the deterministic utility function of the choice alternative, chosen by a social network member, to measure an individuals’ sensitivity to social influence. To account for individual differences in sensitivity to social influence, this term is assumed a function of the individual’s socio-demographic profile and the nature of the relationship between the individual and the social network member, differentiating between friends, relatives and neighbors. The model generalizes prior models on social influence from binary to multi-alternative choices. To assess the validity of the model, the choice of city trip itinerary was chosen as an example. A sequential stated adaptation experiment, in which individuals first choose the itinerary they personally like best from a series of experimentally varied choice sets and then choose again from the same choice sets after being informed about the choice of a social network member, constitutes the basis of the model estimation. Results show that the model reproduces observed data well. Social influence has a modest but significant positive effect on individuals’ choice behavior. In addition, the strength of social influence is shown to have a significant positive relationship with income (= 3126 Euro/monthly) and particularly if the social network member is a friend