Consideration-Set Model

Consideration-set models formalize the empirical fact that consumers do not evaluate every available brand but choose from a small subset they actively consider. Choice is decomposed into two stages: first a brand is screened into the consideration (or evoked) set, then it competes for selection only against the other considered brands. John Roberts and James Lattin's 1991 model gave this idea a rigorous, estimable form by treating consideration as the outcome of a benefit-cost calculus — a brand is added to the set when the expected incremental benefit of including it exceeds a cost of consideration. The conditional second stage is typically a logit over the considered brands, so the unconditional choice probability is a weighted sum over possible consideration sets. Modeling the first stage matters because ignoring it biases estimated brand effects and substitution patterns: a brand can lose because it is never considered, not because it loses head-to-head. The framework underlies modern thinking about awareness, screening, and the upper funnel in brand competition.