Dynamic Models Incorporating Individual Heterogeneity: Utility Evolution in Conjoint Analysis

Liechty, John C.; Fong, Duncan K. H.; DeSarbo, Wayne S.
March 2005
Marketing Science;Spring2005, Vol. 24 Issue 2, p285
Academic Journal
It has been shown in the behavioral decision making, marketing research, and psychometric literature that the structure underlying preferences can change during the administration of repeated measurements (e.g., conjoint analysis) and data collection because of effects from learning, fatigue, boredom, and so on. In this research note, we propose a new class of hierarchical dynamic Bayesian models for capturing such dynamic effects in conjoint applications, which extend the standard hierarchical Bayesian random effects and existing dynamic Bayesian models by allowing for individual-level heterogeneity around an aggregate dynamic trend. Using simulated conjoint data, we explore the performance of these new dynamic models, incorporating individual-level heterogeneity across a number of possible types of dynamic effects, and demonstrate the derived benefits versus static models. In addition, we introduce the idea of an unbiased dynamic estimate, and demonstrate that using a counterbalanced design is important from an estimation perspective when parameter dynamics are present.


Related Articles

  • A General Choice Model for Bundles with Multiple-Category Products: Application to Market Segmentation and Optimal Pricing for Bundles. JAIHAK CHUNG; RAO, VITHALA R. // Journal of Marketing Research (JMR);May2003, Vol. 40 Issue 2, p115 

    The attribute-based approach to study customer choices cannot deal with bundles of heterogeneous components, which are usually drawn from different product categories. The authors develop the comparability-based balance model, which is a unified framework for modeling bundle choices. The model...

  • Hierarchical Bayes Conjoint Analysis: Recovery of Partworth Heterogeneity from Reduced Experimental Design. Lenk, Peter J.; Desarbo, Wayne S.; Green, Paul E.; Young, Martin R. // Marketing Science;1996, Vol. 15 Issue 2, p173 

    The drive to satisfy customers in narrowly defined market segments has led firms to offer wider arrays of products and services. Delivering products and services with the appropriate mix of features for these highly fragmented market segments requires understanding the value that customers place...

  • Heterogeneous Conjoint Choice Designs. S�NDOR, ZSOLT; WEDEL, MICHEL // Journal of Marketing Research (JMR);May2005, Vol. 42 Issue 2, p210 

    Previous conjoint choice design construction procedures have produced a single homogeneous design that is administered to all study participants. In contrast, this article proposes to construct a limited set of different designs. The principle of heterogeneous designs is applicable to a variety...

  • Market Share Constraints and the Loss Function in Choice-Based Conjoint Analysis. Gilbride, Timothy J.; Lenk, Peter J.; Brazell, Jeff D. // Marketing Science;Nov/Dec2008, Vol. 27 Issue 6, p995 

    Choice-based conjoint analysis is a popular marketing research technique to learn about consumers' preferences and to make market share forecasts under various scenarios for product offerings. Managers expect these forecasts to be "realistic" in terms of being able to replicate market shares at...

  • Consumers making trade-offs.  // Chain Drug Review;1/4/2010, Vol. 32 Issue 1, p56 

    The article reports on the shift of beauty shoppers on their buying patterns to trading off during the economic downturn in the U.S.

  • Conjoint Analysis: Peering Behind the Jargon. Axelrod, Joel N.; Frendberg, Norman // Marketing Research;Jun90, Vol. 2 Issue 2, p28 

    Presents an overview of the conjoint analysis method for anticipating how consumers will react to any defined combination of marketing variables. Provision of durable and cost-efficient information on product concepts and marketing scenarios; Systematic evaluation of `what if' questions;...

  • An Examination on the Effects of Attribute Order and Product Order Biases in Conjoint Analysis. Tharp, Michael; Marks, Lawrence // Advances in Consumer Research;1990, Vol. 17 Issue 1, p563 

    The effect of perturbing the stimulus structure within conjoint measurement and the effects of product order in a multiple-product conjoint study are examined. Although conjoint measurement has historically been considered quite robust, ordering bias may result in structural unreliability if not...

  • A Dynamic Model of Brand Choice When Price and Advertising Signal Product Quality. Erdem, Tülin; Keane, Michael P.; Baohong Sun // Marketing Science;Nov/Dec2008, Vol. 27 Issue 6, p1111 

    In this paper, we develop a structural model of household behavior in an environment where there is uncertainty about brand attributes and both prices and advertising signal brand quality. Four quality signaling mechanisms are at work: (1) price signals quality, (2) advertising frequency signals...

  • A generalised Bayesian model of market microstructure behaviour applied to the market in Irish government securities. Dunne, Peter G. // International Review of Financial Analysis;2000, Vol. 9 Issue 4, p369 

    This paper presents a critique and revision of a well-known Bayesian model of market microstructure behaviour. The existing behavioural model allows for a very limited form of information processing and results in an associated empirical form, which does not adequately account for the...


Read the Article


Sign out of this library

Other Topics