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Does opt-out Alternative count for likelihood calculation?

So if you present 2 alternatives and an opt-out option how do you calculate the likelihood for that?
asked Nov 23, 2019 by anonymous

1 Answer

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Best answer
Yes, it does.

Your null likelihood for a case with two alternatives plus an opt out is 0.3333333.  

If your utilities for Option A is 1 and for option B is 0 and for the opt-out is 0 then their exponentiated utilities are, respectively, 2.718, 1 and 1 and their choice probabilities are 0.576, 0.212 and 0.212.  If the respondent chooses the first alternative, then your observed likelihood is 0.576.
answered Nov 23, 2019 by Keith Chrzan Platinum Sawtooth Software, Inc. (92,075 points)
Thanks a lot!