Chapter 6 · Advanced Techniques of Market Analysis · Slide 230/274
What Do Market Simulations Do?
The product choice per respondent is determined by so-called choice rules — e.g.:
6.2 · Market SimulationsChoice rules
What Do Market Simulations Do?
The product choice per respondent is determined by so-called choice rules — e.g.:
First-choice rule
First-Choice Rule
- The product with the highest utility is chosen.
- Selection probability = 100 % for this product, 0 % for all others.
BTL model
after Bradley · Terry · Luce
- Selection probability depends on the relative utility share in the market.
- Even products with low preference or utility value receive a positive probability.
Logit rule
contrast-based
- Selection probability increases with growing contrast in product utility.
- Enables an a-priori adjustment of simulated to real market shares.
QUESTIONSTAR · Dr. Paul Marx230 / 274