Red Bus – Blue Bus problem
The red bus - blue bus problem, states that the demand transfer happens proportional to the attributes of the product, as different attributes serve different utility to the customers.
This demand transfer can also be seen as Zero sum game, e.g. customer share shifting from 1 product to other product.
Thus a choice model can be created by modelling probability - using probit model or logit model based on attributes of products to understand which attribute influences the customer and by how much.
Utility Theory:
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