---
url: "https://questionstar.com/principles-of-survey-research/chapter-6/slide-230.html"
title: "What Do Market Simulations Do?"
type: "lehrbuch-slide"
chapter: 6
chapterTitle: "Advanced Techniques of Market Analysis"
slide: 230
---

# What Do Market Simulations Do?

*The product choice per respondent is determined by so-called choice rules — e.g.:*

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.

![π_h = U_h divided by the sum of all U_h](/principles-of-survey-research/media/formel_btl.png)

### Logit rule

contrast-based

- Selection probability increases with growing **contrast** in product utility.
- Enables an **a-priori adjustment** of simulated to real market shares.

![π_h(α) = e to the α·U_h divided by the sum of e to the α·U_h](/principles-of-survey-research/media/formel_logit.png)

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*Slide 230 of 274 · Chapter 6: Advanced Techniques of Market Analysis · Principles of Survey Research · Dr. Paul Marx*