Our objective is to contribute to the variety seeking behavior research by: (1) providing managerial implications for optimal product positioning; (2) proposing a method to estimate the well known Dynamic Attribute Satiation (DAS) model (McAlister 1982) on purchase data; and (3) investigating(via simulation) the relative performance (i.e., predictive effectiveness) of the DAS against the well known stochastic brand choice models. In investigating the optimal positioning implications of variety seeking behavior, we develop a new attribute-based stochastic model which is consistent with much past research. Based on intuition, one might expect increased variety seeking to imply that firms should increase the distance between their products in an attribute space. In fact, we show here via a simple scenario that this effect does occur for relatively low-share brands. But just the opposite effect holds for relatively high-share brands. That is, we show that variety seeking behavior generates a desire for more differentiation among low-share brands, and a desire for less differentiation among high share brands. A two stage aggregate level procedure is proposed to estimate the DAS on purchase data. First, preference rankings, derived from purchase data, are fed into LINMAP (Srinivasan and Shocker 1973), which provides estimates for attribute ideal and importance levels. Given those estimates, we search for that value of the retention level which maximizes the likelihood of the observed purchase data. Various statistics confirm the effectiveness of our procedure. We assess the predictive effectiveness of the DAS against six stochastic choice models by the Bayesian Cross Validated Likelihood method (Rust and Schmittlein 1985). Various SAS GLM runs confirm the following results. For the various samples employed in this research, the DAS is outperformed by the simple stochastic models on data generated by the DAS process! This finding is due not only to the stochastic models\u27, particularly the Beta Binomial\u27s, success in estimation but also to their superior ability in representing the various DAS processes. We conclude: from stochastic point of view, variety seeking behavior amounts to a zero order process at the aggregate level
