The Strategic Effects of State-Dependent Consumer Preferences: The Roles of Habits and Variety Seeking

  • Raphael ThomadsenEmail author
  • P. B. (Seethu) Seetharaman


In this chapter, we examine the strategic effects of state-dependent consumer preferences, including effects of habits and variety seeking. We begin by discussing how habits and variety seeking have been modelled in the quantitative marketing and economics literatures. We then discuss the various ways that these state-dependent preferences affect pricing, which is the most studied strategic effect of habit and variety seeking. We also consider the impact of these preferences on different members of the retail channel, as well as considering how these preferences affect which products firms will offer and the optimal advertising levels, among other topics. While habits and variety seeking are often modelled as being the opposites of each other in models, they sometimes have similar impacts on prices and other strategies.


Habit Variety seeking State dependence Pricing Marketing strategy 


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Copyright information

© Springer Nature Switzerland AG 2018

Authors and Affiliations

  • Raphael Thomadsen
    • 1
    Email author
  • P. B. (Seethu) Seetharaman
    • 1
  1. 1.Olin Business SchoolWashington University in St. LouisSt. LouisUSA

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