measuring willingness to pay with our new method separated adaptive dual response (sadr)

39
Two New Features in Discrete Choice Experiments to Improve Willingness to Pay Estimation that Result in SDR and SADR: Separated (Adaptive) Dual Response Forthcoming in Management Science Christian Schlereth WHU Otto Beisheim School of Management Bernd Skiera Goethe University Frankfurt

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Two New Features in Discrete Choice

Experiments to Improve Willingness to Pay

Estimation that Result in SDR and SADR:

Separated (Adaptive) Dual Response

Forthcoming in Management Science

Christian Schlereth WHU – Otto Beisheim School of Management

Bernd SkieraGoethe University Frankfurt

Carson et al. (1994); Dhar (1997); Louviere et al. (2000); Haaijer et al. (2001); Vermeulen et al. (2008)

Choice-based conjoint nowadays one of the most important method

to measure willingness to pay

A B C

Do not

purchase

any of the

three

Attribute 1

Attribute 2

Attribute 3

Choice-based conjoint

Free-choice questions only, i.e., each choice-sets contains a no-purchase option

No-purchase option provides:

- Clear reference point

- Realistic experimental setting

- Allows prediction of market penetration

2

Information gained when choosing a product

A B C

Do not

purchase

any of the

three

Attribute 1

Attribute 2

Attribute 3

Purchase decision Selection decision

B > 0

Product B provides sufficient utility for a purchase

B > A; C

Choice-based conjoint

3

Information gained when choosing no-purchase option

A B C

Do not

purchase

any of the

three

Attribute 1

Attribute 2

Attribute 3

Not enough data to learn about individual preferences

Purchase decision Selection decision

0 > A; B; C

None of the products provide sufficient utility for a purchase

No information about relative attractiveness of attributes

Choice-based conjoint

4

Dual response: Selection decisions are also observed when no-

purchase option is chosen

Dual ResponseA B CAttribute 1

Attribute 2

Attribute 3

Purchase most preferredDo not purchase most

preferred

Forced choice question

Free choice question

Purchase decision Selection decision

0 > A; B; C

From free choice question From forced choice question

Selection decision is always observable; thus: more accurate estimation of preferences

But higher cognitive effort for a respondent due to double amount of questions

B > A; C

Dhar & Simonson (2003); Dhar & Nowlis (2004); Brazell et al. (2006)

Dual response

5

Shortcoming: Context effects in choice-based conjoint

Examples:

Attraction Effect:

No-purchase option is chosen less frequently, if a dominant product alternative exists

Similarity Effect:

No-purchase option is chosen more frequently, if similar attractive product alternatives exists, as an “easy way out”

Huber, Payne, and Puto (1982); Tversky and Shafir (1992); Dhar (1997); Rooderkerk, Van Heerde, and Bijmolt (2011);

A B C

Do not

purchase

any of the

three

Attribute 1

Attribute 2

Attribute 3

6

• Whether products provide sufficient utility for a purchase is not the only reason for a respondent

to pick the no-purchase option

• Context effects typically neglected in estimation

Shortcoming: Context effects in dual response

Other empirical findings

- Higher share of chosen no-purchase option (Dhar and Simonson 2003; Dhar and Nowlis 2004; Brazell et al.

2006)

- Artificial time delay between selection decisions and purchase decisions reduces no-purchase share(Dhar and Simonson 2003)

A B CAttribute 1

Attribute 2

Attribute 3

Purchase most

preferred

Do not purchase

most preferred

7

• Context effects also exist for dual response

• As a result, willingness to pay estimates are substantially lower compared to choice-based conjoint

Shortcoming: Extreme response behavior

Extreme response behavior (Gensler et al. 2012)

• Respondent always chooses no-purchase option

• No information when respondent will start buying

• WTP might be estimated too low

• Respondent never chooses no-purchase option

• No information, when respondent will stop buying

• WTP might be estimated too high

Extreme response behavior in previous studies (if reported) :

Choice-Based Conjoint

• 58% in Gensler et al. (2012)

• 64% in Parker and Schrift (2011)

• 22% in Wlömert and Eggers (2014)

• Up to 56% in our studies

Dual Response

• 31% in Wlömert and Eggers (2014)

• Up to 36% in our studies

8

Shortcoming: Impact of purchase probability on measurement accuracy

9

Implication: Companies estimate willingness to pay more accurately for a respondent who

does not intend to buy their product

If a choice-set contains more than one alternative, likelihood increases that a respondent

compares a rather attractive alternative against the no-purchase option purchase

decisions are less informative for a respondent with high purchase probability

Aims of paper

Development of SDR: “Separated Dual Response“, which

1. Avoids context effects by imposing a strict separation between all forced and free choice questions

Development of SADR: “Separated (Adaptive) Dual Response“, which also

2. Avoids extreme response behavior

by imposing a strict separation between all forced and free choice questions

through an adaptive mechanism that captures heterogeneity in willingness to pay

3. Ensures similar accuracy in measured willingness to pay, independent of a respondent‘s purchase probability

10

Agenda

11

Mechanism of SDR and SADR

Simulation study to analyze

dependence between willingness to pay accuracy

and purchase probability

Tests of statistical and behavioral endogeneity

Insights from three empirical studies

SADR (Separated Adaptive Dual Response):

In addition to feature 1 („strict separation“), we use

decisions in forced choice questions to adaptively

identify fewer, but more informative free choice

questions

Two new features for discrete choice experiments

resulting in SDR and SADR

12

Feature 1:

Strictly separating forced and

free choice questions

Feature 2:

Adaptive mechanism to select fewer, but more

informative, free choice questions

SDR (Separated Dual Response):

We ask all forced choice questions first and then all

free choice questions. Thus, we introduce a time

delay between a forced and a free choice question

Separated Dual

Response

(SDR)

...

A1 B1 C1

Buy

Selected1

Do not

buy

A2 B2 C2

Buy

Selected2

Do not

buy

...

Separated Adaptive Dual

Response

(SADR)

...

A1 B1 C1

Buy A 1Do not

buy

A2 B2 C2

Buy A 2Do not

buy

...

Adaptive mechanism of SADR – Separated Adaptive Dual Response

13

Info

rmat

ion

gap

1. Forced choice block

Use efficient choice design for all respondents (e.g. D-optimal)

Use linear probability model to approximate individual preference order (Heckman & Snyder 1997)

Simulate preference order of all products in full factorial design

2. Free choice block

"Smartly“ select n products for inclusion in purchase questions

Use binary logit model to select next area, which provides most information

about purchase decision making

Iterate m times

Select A, Select B, Select C

Select A, Select B, Select C

SADR

Purchase Presented, Purchase None

Estimate preliminary preference order

Most preferred productLeast preferred product75%50%25%

Preference order

0% (= No Purchase)

Probability of a purchase

100% (= Purchase)

A respondent‘s perspective - screenshots of SADR

Forced Choice Block:

(“pick one of the products“)

j forced choice questions

A1 B1 C1

A2 B2 C2

...

A3 B3 C3

A4 B4 C4

A5 B5 C5

Free Choice Block:

(“buy or not buy product“)

Block 1 of n free choice questions

Buy D1' Do not buy D1'

Buy D2' Do not buy D2'

Buy ... Do not buy ...

Buy ... Do not buy ...

...

Block 2 of n free choice questions

14

Summary of studied discrete choice experiments

15

Choice-Based Conjoint

(CBC)

Dual Response

(DR)

Separated Dual

Response

(SDR)

Separated Adaptive Dual

Response

(SADR)

A1 B1 C1Do not

buyA1 B1 C1

...

Buy

Selected1

Do not

buyA2 B2 C2

Do not

buy

A2 B2 C2

Buy

Selected2

Do not

buy

...

A1 B1 C1

Buy

Selected1

Do not

buy

A2 B2 C2

Buy

Selected2

Do not

buy

...

...

A1 B1 C1

Buy A 1Do not

buy

A2 B2 C2

Buy A 2Do not

buy

...

Mechanism

Shortcomings

Context effects

Extreme response

behavior

Impact of purchase probability

on accuracy of WTP

X

X

X

X

X

X

X

X

-- --

--

--

Estimation

Scale-extended model

DR-2Max-model (Diener, Orme, and Yardley 2006)

Extended to account for differences in consistency between selection and

purchase decisions (Swait and Andrews 2003)

Force choice questions Free choice questions

Estimation

Multinomial logit model using Hierarchical Bayes

All models implemented in Matlab

A B C

Attribute 1

Attribute 2

Attribute 3

Buy product DDo not buy product D

A B C

Attribute 1

Attribute 2

Attribute 3

…A B C

Attribute 1

Attribute 2

Attribute 3

Buy product DDo not buy product D

Buy product DDo not buy product D

h ,i , j

h ,i ', j '

j j '

dd

1 h,i 2 h,i '

h

j J i C j' J ' i ' C 2 0 2 h,i '1 h, j

J

exp V exp VL

exp V exp Vexp V

16

Agenda

17

Mechanism of SDR and SADR

Simulation study to analyze

dependence between willingness to pay

accuracy and purchase probability

Tests of statistical and behavioral endogeneity

Insights from three empirical studies

Monte carlo simulation study

18

Set-up based on:

18 choice sets with

4 attributes and

4 levels each

Setup similar to:• Aurora and Huber (2001)

• Toubia et al. (2004)

Experimental Conditions Number of Levels Values

Types of Discrete Choice

Experiments 7

Choice-Based Conjoint ( 0 separate free choice questions)

Dual response, SDR (18 separate free choice questions)

SADR [m=1, n=9] ( 9 separate free choice questions)

SADR [m=9, n=1] ( 9 separate free choice questions)

SADR [m=3, n=3] ( 9 separate free choice questions)

SADR [m=2, n=2] ( 4 separate free choice questions)

SADR [m=4, n=4] (16 separate free choice questions)

4

4

5

6

7

2 = .5 (low accuracy)

= 3 (high accuracy)

2 σ² = .5 (low heterogeneity)

σ² = 3 (high heterogeneity)

3

γ = .6 (low: ~10% no-purchase decisions)

γ = -.8 (medium: ~30% no-purchase decisions)

γ = -1.75 (high: ~50% no-purchase decisions)

Number of conditions 4 ∙ 2 ∙ 2 ∙ 3 = 48

Number of types of discrete

choice experiments

7

Number of replications 5

Total number of studies 48 ∙ 7 ∙5 = 1,680

Notes: 100 respondents; SADR = separated adaptive dual response; m = number of iterations in free choice block of SADR,

each of which consists of n free choice questions.

Comparison of ability to recover constant in utility function

19

Purchase

Probability

Share of No-

Purchases

Choice-

Based

Conjoint

Dual

Response &

SDR

SADR

[m=1,n=9] [m=9,n=1] [m=3,n=3] [m=2,n=2] [m=4,n=4]

LOW HIGH .56 .58 .71 .70 .70 .83 .61

MIDDLE MIDDLE .63 .68 .73 .71 .72 .85 .62

HIGH LOW .82 .89 .74 .72 .73 .86 .63

Mean .67 .72 .73 .71 .72 .85 .62

Notes: RMSE = root mean squared error; lower values indicate better ability. SDR = separated dual response; SADR= separated adaptive dual response; m =

number of iterations in free choice block, each of which consists of n free choice questions.

• Ability to recover constant in utility function (RMSE)

• serves to predict the error of the probability that a respondent will buy a product or not

• varies with purchase probability for choice-based conjoint and dual response, but not for

SADR

Agenda

20

Mechanism of SDR and SADR

Simulation study to analyze

dependence between willingness to pay accuracy

and purchase probability

Tests of statistical and behavioral endogeneity

Insights from three empirical studies

Examination of endogeneity

Violation of assumption of independence of

choices, because design of free choice

questions depend upon previous choices and

therefore on realizations of error term

Hauser and Toubia (2005); Liu, Otter, and Allenby

(2007)

Statistical Perspective Behavioral Perspective

Adaptive nature of free choice questions might

affects a respondent’s choices and cause

anchoring or framing effects

DeShazo (2002); Alberini, Kanninen, and Carson (1997);

Hanemann, Loomis, and Kanninen (1991)

Xforced choices

β, σ²

Forced Choice Block Free Choice Block

Yforced choices Xfree choices Yfree choices

Examined using approach of Alberini, Kanninen, and Carson (1997)

Examined using approach ofLiu, Otter, and Allenby‘s (2007)

21

0 500 1000 1500 2000 2500 3000 3500 4000 4500 5000

-2.6

-2.4

-2.2

0 500 1000 1500 2000 2500 3000 3500 4000 4500 5000

-2.6

-2.4

-2.2

SADR with adaptive design

SADR with fixed design

MCMC iteration

MCMC iteration

Esti

mat

e o

f co

nst

ant

Esti

mat

e o

f co

nst

ant

Statistical concerns of endogeneity can be ignored

Mechanism of creating Xfree choice can be ignored if (Liu, Otter, and Allenby‘2007):

• estimation method adheres to likelihood principle

• Xfree choice does not contain information that is beyond Yforced choice and Yfree choice

Demonstration

• Comparison of recovery accuracy of SADR with

adaptive free choice question design and a

fixed (D-optimal) design

• 18 Choice-Sets, 44-design, 16 free choice

questions

• Sampled parameter values of 1000 consumers

drawn from normal distribution

• Mean (StdDev) of constant: -2.40 (2.45)

-2.40 (1.98)

-2.43 (1.93)

22

Behavioral concerns of endogeneity can be ignored

Indications of behavioral concerns of endogeneity, studied in the double bounded dichotomous

choice literature

Downward shift in WTP through follow-up free choice questions (e.g., from $250 to $150)

See further Alberini, Kanninen, and Carson (1997), Hanemann, Loomis, and Kanninen (1991), and McFadden and Leonard (1995)

Recommendations to avoid behavioral endogeneity

Well-balanced, symmetric designs result in very modest bias, even if anchoring is strong (Veronesi, Alberini, and Cooper

2011)

Testing for structural shifts in WTP by estimating additional term δ·ln(pos∙) in utility function (Alberini, Kanninen, and Carson

1997)

Applying Alberini, Kanninen, and Carson’s (1997) test in our empirical studies detects no structural

shift in WTP for later free choice questions

23

Agenda

24

Mechanism of SDR and SADR

Simulation study to analyze

dependence between willingness to pay accuracy

and purchase probability

Tests of statistical and behavioral endogeneity

Insights from three empirical studies

Description of three empirical studies to compare (SDR and) SADR

against choice-based conjoint and dual response

Study 2:

Basketball tickets

• N = 880 (customers of market leader)

• 52·4·3·2 Balanced Design

Study 1:

Tablets

• N = 459 (fans of a major league basketball team)

• 43 Balanced Design

Choice-Based

Conjoint

Dual Response

SADR

Force Choice Questions

-- 18 18

Free Choice Questions

18 18 9

Study 3:

Video-on-demand

Choice-Based

Conjoint

Dual Response

SADR

Force Choice Questions

-- 12 12

Free Choice Questions

12 12 6

Choice-Based

Conjoint

Dual Response

SDR SADR

Force Choice Questions

-- 12 12 12

Free Choice Questions

12 12 12 6

• N = 1,425

• 4·32·23 Balanced Design

25

Set-up of questionnaire

Choice-BasedConjoint

Dual Response

SADR

Introduction

Measurement of cognitive effort(Bettman et al. 1986)

Configurator-task and direct questionsto measure willingness to pay

Collection of demographic and socio-economic variables

Random assignment to one discrete choice experiment

100%

100%

100%

SDR(study 1 only)

26

Systematic differences of selecting no-purchase option

Choice-based

conjoint

Dual response SDR SADR

Study 1: Tablets N=214 N=203 N=219 N=208

Share of no-purchase option 22.7% 46.2% 42.2% n.a.

Extreme response behavior 1: Never no-purchase option 32.7% 9.4% 3.7% .5%

Extreme response behavior 2: Always no-purchase option 3.3% 12.8% 3.7% 5.3%

No extreme response behavior 64.0% 77.8% 92.7% 94.2%

Study 2: Basketball tickets N=160 N=146 -- N=153

Share of no-purchase option 15.8% 29.4% -- n.a.

Extreme response behavior 1: Never no-purchase option 56.3% 25.0% -- 9.5%

Extreme response behavior 2: Always no-purchase option 0.0% 0.7% -- 3.8%

No extreme response behavior 43.8% 74.3% -- 86.7%

Study 3: Video-on-Demand N=267 N=308 -- N=305

Share of no-purchase option 48.4% 67.2% -- n.a.

Extreme response behavior 1: Never no-purchase option 16.9% 5.8% -- 1.0%

Extreme response behavior 2: Always no-purchase option 17.2% 30.8% -- 6.9%

No extreme response behavior 65.9% 63.3% -- 92.2%

27

SADR with lowest share of extreme response behavior; Separation via SDR contributes mostly to this result

Choice-based conjoint with highest share of respondents who would always purchase

Dual response with highest share of no-purchase option

Summary of study results

Studie 1

Tablets

Studie 2

Basketball tickets

Studie 3

Video-on-demand

Lowest share of extreme response

behaviorSADR SADR

SADR

Validity

Best internal validity (hit rate,

RMSE)SADR SADR SADR

Best predictive validity (hit rate,

RMSE)SADR, SDR SADR SADR

Best convergent validity (RMSE) n.a. SADR SADR

Best external validity (RMSE) n.a. SADR SADR

Cognitive effort

Lowest perceived difficulty No significant differences No significant differences CBC, SADR

Lowest dropout rate in discrete

choice experiment

CBC

(SADR lower dropout rates

than dual response)

CBC

(SADR lower dropout rates

than dual response)

CBC

(SADR lower dropout rates

than dual response)

Lowest duration CBC

(SADR with about equal

duration than dual response)

CBC

(SADR with about equal

duration than dual response)

CBC

(SADR with about equal

duration than dual response)

28

Deep dive on convergent and external validity for study 2 & 3

Study 2:

Basketball tickets

• N = 880 (customers of market leader)

• 52·4·3·2 Balanced Design

Study 1:

Tablets

• N = 459 (Fans of a major league basketball team)

• 43 Balanced Design

Choice-Based

Conjoint

Dual Response

SADR

Force Choice Questions

-- 18 18

Free Choice Questions

18 18 9

Study 3:

Video-on-demand

Choice-Based

Conjoint

Dual Response

SADR

Force Choice Questions

-- 12 12

Free Choice Questions

12 12 6

Choice-Based

Conjoint

Dual Response

SDR SADR

Force Choice Questions

-- 12 12 12

Free Choice Questions

12 12 12 6

• N = 1,425

• 4·32·23 Balanced Design

29

Convergent validity – choice-based conjoint

Choice-Based Conjoint Dual Response SFFC

Study 1: Video-on-Demand

Aggregate-level comparison

Mean WTP

self-stated ↔ CBC

10.90 € ↔ 11.61 €

self-stated ↔ DR

10.30 € ↔ 8.29 €

self-stated ↔ SFFC

11.40 € ↔ 11.85 €

Median WTP 10.00 € ↔ 7.82 € 10.00 € ↔ 6.82 € 10.00 € ↔ 10.40 €

Max WTP 30.00 € ↔ 167.39 € 30.00 € ↔ 58.16 € 40.00 € ↔ 50.84 €

Study 2: Basketball Tickets

Aggregate-level comparison self-stated ↔ CBC self-stated ↔ DR self-stated ↔ SFFC

Mean WTP 24,30 € ↔ 54,58 € 23,38 € ↔ 24,78 € 25,30 € ↔ 25,52 €

Median WTP 23,00 € ↔ 28,94 € 24,00 € ↔ 20,66 € 25,00 € ↔ 23,25 €

Max WTP 60,00 € ↔ 312,41 € 60,00 € ↔ 94,47 € 70,00 € ↔ 72,15 €

A B CNo-

purchase

option

Attribute 1

Attribute 2

Attribute 3

30

Convergent validity – dual response

Choice-Based Conjoint Dual Response SFFC

Study 1: Video-on-Demand

Aggregate-level comparison

Mean WTP

self-stated ↔ CBC

10.90 € ↔ 11.61 €

self-stated ↔ DR

10.30 € ↔ 8.29 €

self-stated ↔ SFFC

11.40 € ↔ 11.85 €

Median WTP 10.00 € ↔ 7.82 € 10.00 € ↔ 6.82 € 10.00 € ↔ 10.40 €

Max WTP 30.00 € ↔ 167.39 € 30.00 € ↔ 58.16 € 40.00 € ↔ 50.84 €

Study 2: Basketball Tickets

Aggregate-level comparison self-stated ↔ CBC self-stated ↔ DR self-stated ↔ SFFC

Mean WTP 24,30 € ↔ 54,58 € 23,38 € ↔ 24,78 € 25,30 € ↔ 25,52 €

Median WTP 23,00 € ↔ 28,94 € 24,00 € ↔ 20,66 € 25,00 € ↔ 23,25 €

Max WTP 60,00 € ↔ 312,41 € 60,00 € ↔ 94,47 € 70,00 € ↔ 72,15 €

A B CAttribute 1

Attribute 2

Attribute 3

Purchase most preferredDo not purchase most

preferred

31

Attribute 1

Attribute 2

Attribute 3

Attribute 1

Attribute 2

Attribute 3

Attribute 1

Attribute 2

Attribute 3

Purchase product D

Purchase product E No purchase

No purchase

Convergent validity – SADR

Choice-Based Conjoint Dual Response SFFC

Study 1: Video-on-Demand

Aggregate-level comparison

Mean WTP

self-stated ↔ CBC

10.90 € ↔ 11.61 €

self-stated ↔ DR

10.30 € ↔ 8.29 €

self-stated ↔ SFFC

11.40 € ↔ 11.85 €

Median WTP 10.00 € ↔ 7.82 € 10.00 € ↔ 6.82 € 10.00 € ↔ 10.40 €

Max WTP 30.00 € ↔ 167.39 € 30.00 € ↔ 58.16 € 40.00 € ↔ 50.84 €

Study 2: Basketball Tickets

Aggregate-level comparison self-stated ↔ CBC self-stated ↔ DR self-stated ↔ SFFC

Mean WTP 24,30 € ↔ 54,58 € 23,38 € ↔ 24,78 € 25,30 € ↔ 25,52 €

Median WTP 23,00 € ↔ 28,94 € 24,00 € ↔ 20,66 € 25,00 € ↔ 23,25 €

Max WTP 60,00 € ↔ 312,41 € 60,00 € ↔ 94,47 € 70,00 € ↔ 72,15 €

32

Comparison of demand functions against the one derived from self-

stated willingness to pay

33

Study 2: Basketball Tickets Study 3: Video-on-Demand

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

5 € 7 € 9 € 11 € 13 € 15 € 17 € 19 € 21 €

Shar

e o

f cu

sto

me

rs p

urc

has

ing

at p

rice

p

Price for the self-customized VoD plan

Choice-Based ConjointDual ResponseSADRDirectly stated

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

9 € 14 € 19 € 24 € 29 €

Shar

e o

f cu

sto

me

rs p

urc

has

ing

at p

rice

p

Price for the self-customized basketball ticket

Choice-Based ConjointDual ResponseSADRDirectly Stated

External validity

Study 2 – basketball tickets

Approach

• Comparison 1: Comparison of actual and predicted choice proportions in four ticket categories in season before and after study

• Comparison 2: Comparison of actual and predicted number of viewers after price increase of 2 € between seasons

NOTE: Price categories were sold out in only 8.09 % of all games

CBC Dual Response SADR

Choice proportions in four price categories N=160 N=146 N=153

RMSE season before study .099 .095 .059

RMSE season after study .102 .098 .061

Change in number of viewers after price increase

RMSE .041 .038 .034

34

External validity

Study 3 – video-on-demand

“with reference to external validity, (…) one should measure the attributes of real choice alternatives (e.g.,

real brands) faced by each subject and observe their reported (…) most recent choice” (Batsell and Louviere

1991)

Comparison of each subject’s self-reported answer, whether they previously purchased VoDs and how

much they paid for them on average.

Choice-Based Conjoint Dual Response SADR

N=267 N=308 N=305

stated ↔ predicted stated ↔ predicted stated ↔ predicted

Share of Paying Customers 67.04% ↔ 40.82% 67.86% ↔ 29.54% 69.18% ↔ 62.95%

RMSE 0.55 0.59 0.50

35

Summary

SDR and especially SADR with unique features to better measure willingness to pay

Unique feature of SDR & SADR:

Avoidance of context effects through strict separation of forced and free choice questions into two blocks

Unique additional features of SADR:

Avoidance of extreme response behavior through adaptive free choice questions

Independence between purchase probability and accuracy in measuring willingness to pay through selecting free

choice alternatives from the whole range of the preference order

Reduction of number of redundant purchase questions (about 20% less effort)

Empirical findings

SADR offers higher internal predictive, convergent, and external validity; large parts of increase in predictive validity

stem from the separation feature as implemented in SDR

SADR requires less cognitive effort than Dual Response, but respondents spend the same amount of time

Better "balanced“ and more informative decisions than in choice-based conjoint and dual response

36

Thank you for your attention!

Christian SchlerethChair of Digital MarketingWHU – Otto Beisheim School of Management

+49 (0) 261 6509 455

+49 (0) 261 6509 509

[email protected]

Bernd SkieraChair of Electronic CommerceDepartment of MarketingGoethe University Frankfurt

+49 (0) 69798 34649

+49 (0) 69798 35001

[email protected]

37

Demo: http://www.dise-online.net/demo.aspx

Implementation of SDR and SADR in DISE (Dynamic Intelligent Survey Engine)

Part 1: forced choice block

38

<predefinedPages markID="1003">

<cbc percentageStart="25" percentageEnd="60">

<choiceSetQuestion>Which of the tablets would you prefer most?</choiceSetQuestion>

<attributes>

<attribute>

<name>Brand and operating system</name>

<isNominal />

<levels>

<level><text>Apple (iOS)</text><baseValue>150</baseValue></level>

<level><text>Samsung (Android)</text><baseValue>50</baseValue></level>

<level><text>Smarttab (Android)</text><baseValue>0</baseValue></level>

</levels>

</attribute>

<attribute>

<name>Screen size</name>

<isNominal />

<levels>

<level><text>7 inch</text></level>

<level><text>10 inch</text></level>

</levels>

</attribute>

...

</attributes>

<cbcDesign>

1,1,1,2,2,4;

3,2,2,1,1,3;

...

</cbcDesign>

<configuration>

<noChoiceSetsPerPage>1</noChoiceSetsPerPage>

<noProductsPerChoiceSet>3</noProductsPerChoiceSet>

<hasNoChoice>false</hasNoChoice>

<noSortedCompleteFactorialDesign>false</noSortedCompleteFactorialDesign>

</configuration>

</cbc>

</predefinedPages>

Specify all attributes and levels

(here, a brand specific base price

is specified)

Include choice design

Specify number of alternatives

per choice set as well that choice

sets contain forced choice

questions, i.e., without a no-

purchase option

Assign ID “1003“ to forced choice

block

SDR & SADR – Separated (adaptive) dual response

Demo: http://www.dise-online.net/demo.aspx

Implementation of SDR and SADR in DISE (Dynamic Intelligent Survey Engine)

Part 2: free choice block

39

<predefinedPages>

<freeChoiceBlock percentageStart="65" percentageEnd="90">

<question>Would you actually buy the presented tablet?</question>

<configuration>

<cbcMarkID>1003</cbcMarkID>

<noAttributesInCbc>6</noAttributesInCbc>

<presentSelectedCbcProducts>true</presentSelectedCbcProducts>

</configuration>

</freeChoiceBlock>

</predefinedPages>

<predefinedPages>

<freeChoiceBlock percentageStart=“65“ percentageEnd="90">

<question>Would you actually buy the presented tablet?</question>

<configuration>

<cbcMarkID>1003</cbcMarkID>

<noAttributesInCbc>6</noAttributesInCbc>

<noQuestionsPerIteration>2</noQuestionsPerIteration>

<noIterations>3</noIterations>

</configuration>

</freeChoiceBlock>

</predefinedPages>

SDR – Separated dual response

SADR – Separated adaptive dual response

Create link to forced choice block

Use mechanism that just shows

the chosen alternatives from

forced choice block

Create link to forced choice block

Assign n = 2 and m = 3

Demo: http://www.dise-online.net/demo.aspx