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Lecture

Microsimulation: Aggregate Market Shares

Description

This lecture covers microsimulation, where choices are simulated for each observation based on a choice model, and aggregate market shares are calculated by summing the number of individuals choosing each alternative. The lecture also discusses the approximation of probabilities and warns against selecting the alternative with the highest probability.

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Related concepts (12)

Public choice

Public choice, or public choice theory, is "the use of economic tools to deal with traditional problems of political science". Its content includes the study of political behavior. In political science, it is the subset of positive political theory that studies self-interested agents (voters, politicians, bureaucrats) and their interactions, which can be represented in a number of ways – using (for example) standard constrained utility maximization, game theory, or decision theory.

Rational choice theory

Rational choice theory refers to a set of guidelines that help understand economic and social behaviour. The theory originated in the eighteenth century and can be traced back to political economist and philosopher, Adam Smith. The theory postulates that an individual will perform a cost-benefit analysis to determine whether an option is right for them. It also suggests that an individual's self-driven rational actions will help better the overall economy. Rational choice theory looks at three concepts: rational actors, self interest and the invisible hand.

Population ageing

Population ageing is an increasing median age in a population because of declining fertility rates and rising life expectancy. Most countries have rising life expectancy and an ageing population, trends that emerged first in developed countries but are now seen in virtually all developing countries. That is the case for every country in the world except the 18 countries designated as "demographic outliers" by the United Nations. The aged population is currently at its highest level in human history.

Emotional choice theory

Emotional choice theory (also referred to as the "logic of affect") is a social scientific action model to explain human decision-making. Its foundation was laid in Robin Markwica’s monograph Emotional Choices published by Oxford University Press in 2018. It is considered an alternative model to rational choice theory and constructivist perspectives.

Zero population growth

Zero population growth, sometimes abbreviated ZPG, is a condition of demographic balance where the number of people in a specified population neither grows nor declines; that is, the number of births plus in-migrants equals the number of deaths plus out-migrants. ZPG has been a prominent political movement since the 1960s. As part of the concept of optimum population, the movement considers zero population growth to be an objective towards which countries and the whole world should strive in the interests of accomplishing long-term optimal standards and conditions of living.

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