IDEAS home Printed from https://ideas.repec.org/a/inm/ormksc/v26y2007i5p642-650.html
   My bibliography  Save this article

Investigating Endogeneity Bias in Marketing

Author

Listed:
  • Qing Liu

    (Department of Marketing, University of Wisconsin–Madison, Madison, Wisconsin 53706)

  • Thomas Otter

    (Faculty of Business and Economics, Johann Wolfgang Goethe University, Frankfurt, Germany)

  • Greg M. Allenby

    (Fisher College of Business, Ohio State University, 2100 Neil Avenue, Columbus, Ohio 43210)

Abstract

The use of adaptive designs in conjoint analysis has been shown to lead to an endogeneity bias in part-worth estimates using sampling experiments. In this paper, we re-examine the endogeneity issue in light of the likelihood principle. The likelihood principle asserts that all relevant information in the data about model parameters is contained in the likelihood function. We show that, once the data are collected, adhering to the likelihood principle leads to analysis where endogeneity becomes ignorable for estimation. The likelihood principle is implicit to Bayesian analysis, and discussion is offered for detecting and dealing with endogeneity bias in marketing.

Suggested Citation

  • Qing Liu & Thomas Otter & Greg M. Allenby, 2007. "Investigating Endogeneity Bias in Marketing," Marketing Science, INFORMS, vol. 26(5), pages 642-650, 09-10.
  • Handle: RePEc:inm:ormksc:v:26:y:2007:i:5:p:642-650
    DOI: 10.1287/mksc.1060.0256
    as

    Download full text from publisher

    File URL: http://dx.doi.org/10.1287/mksc.1060.0256
    Download Restriction: no

    File URL: https://libkey.io/10.1287/mksc.1060.0256?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. James J. Heckman, 1976. "The Common Structure of Statistical Models of Truncation, Sample Selection and Limited Dependent Variables and a Simple Estimator for Such Models," NBER Chapters, in: Annals of Economic and Social Measurement, Volume 5, number 4, pages 475-492, National Bureau of Economic Research, Inc.
    2. Elaine Zanutto & Eric Bradlow, 2006. "Data pruning in consumer choice models," Quantitative Marketing and Economics (QME), Springer, vol. 4(3), pages 267-287, September.
    3. John R. Hauser & Olivier Toubia, 2005. "The Impact of Utility Balance and Endogeneity in Conjoint Analysis," Marketing Science, INFORMS, vol. 24(3), pages 498-507, August.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Daniel Zantedeschi & Eleanor McDonnell Feit & Eric T. Bradlow, 2017. "Measuring Multichannel Advertising Response," Management Science, INFORMS, vol. 63(8), pages 2706-2728, August.
    2. Hongshuang (Alice) Li, 2022. "Converting free users to paid subscribers in the SaaS context: The impact of marketing touchpoints, message content, and usage," Production and Operations Management, Production and Operations Management Society, vol. 31(5), pages 2185-2203, May.
    3. Danaf, Mazen & Guevara, Angelo & Atasoy, Bilge & Ben-Akiva, Moshe, 2020. "Endogeneity in adaptive choice contexts: Choice-based recommender systems and adaptive stated preferences surveys," Journal of choice modelling, Elsevier, vol. 34(C).
    4. John R. Hauser & Guilherme (Gui) Liberali & Glen L. Urban, 2014. "Website Morphing 2.0: Switching Costs, Partial Exposure, Random Exit, and When to Morph," Management Science, INFORMS, vol. 60(6), pages 1594-1616, June.
    5. Vardit Landsman & Moshe Givon, 2010. "The diffusion of a new service: Combining service consideration and brand choice," Quantitative Marketing and Economics (QME), Springer, vol. 8(1), pages 91-121, March.
    6. Theodoros Evgeniou & Massimiliano Pontil & Olivier Toubia, 2007. "A Convex Optimization Approach to Modeling Consumer Heterogeneity in Conjoint Estimation," Marketing Science, INFORMS, vol. 26(6), pages 805-818, 11-12.
    7. Christian Schlereth & Bernd Skiera, 2017. "Two New Features in Discrete Choice Experiments to Improve Willingness-to-Pay Estimation That Result in SDR and SADR: Separated (Adaptive) Dual Response," Management Science, INFORMS, vol. 63(3), pages 829-842, March.
    8. Olivier Toubia & John Hauser & Rosanna Garcia, 2007. "Probabilistic Polyhedral Methods for Adaptive Choice-Based Conjoint Analysis: Theory and Application," Marketing Science, INFORMS, vol. 26(5), pages 596-610, 09-10.
    9. Ioannis Politis & Ioannis Fyrogenis & Efthymis Papadopoulos & Anastasia Nikolaidou & Eleni Verani, 2020. "Shifting to Shared Wheels: Factors Affecting Dockless Bike-Sharing Choice for Short and Long Trips," Sustainability, MDPI, vol. 12(19), pages 1-25, October.
    10. Gensler, Sonja & Hinz, Oliver & Skiera, Bernd & Theysohn, Sven, 2012. "Willingness-to-pay estimation with choice-based conjoint analysis: Addressing extreme response behavior with individually adapted designs," European Journal of Operational Research, Elsevier, vol. 219(2), pages 368-378.
    11. Tetyana Kosyakova & Thomas Otter & Sanjog Misra & Christian Neuerburg, 2020. "Exact MCMC for Choices from Menus—Measuring Substitution and Complementarity Among Menu Items," Marketing Science, INFORMS, vol. 39(2), pages 427-447, March.
    12. Mingyu Joo & Michael L. Thompson & Greg M. Allenby6, 2019. "Optimal Product Design by Sequential Experiments in High Dimensions," Management Science, INFORMS, vol. 65(7), pages 3235-3254, July.
    13. Srinivasan, V. Seenu & Netzer, Oded, 2007. "Adaptive Self-Explication of Multi-attribute Preferences," Research Papers 1979, Stanford University, Graduate School of Business.
    14. Nobuhiko Terui & Masataka Ban & Greg M. Allenby, 2011. "The Effect of Media Advertising on Brand Consideration and Choice," Marketing Science, INFORMS, vol. 30(1), pages 74-91, 01-02.
    15. Alina Ferecatu & Arnaud Bruyn & Prithwiraj Mukherjee, 2024. "Silently killing your panelists one email at a time: The true cost of email solicitations," Journal of the Academy of Marketing Science, Springer, vol. 52(4), pages 1216-1239, July.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Insoo Cho & Peter F. Orazem, 2021. "How endogenous risk preferences and sample selection affect analysis of firm survival," Small Business Economics, Springer, vol. 56(4), pages 1309-1332, April.
    2. Walter Beckert, 2015. "Choice in the Presence of Experts," Birkbeck Working Papers in Economics and Finance 1503, Birkbeck, Department of Economics, Mathematics & Statistics.
    3. Cameron, Trudy Ann & Shaw, W. Douglass & Ragland, Shannon E. & Callaway, J. Mac & Keefe, Sally, 1996. "Using Actual And Contingent Behavior Data With Differing Levels Of Time Aggregation To Model Recreation Demand," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 21(01), pages 1-20, July.
    4. Hans A. Holter & Dirk Krueger & Serhiy Stepanchuk, 2019. "How do tax progressivity and household heterogeneity affect Laffer curves?," Quantitative Economics, Econometric Society, vol. 10(4), pages 1317-1356, November.
    5. Michael Raper, 1999. "Self-selection bias and cost-of-living estimates," Journal of Economics and Finance, Springer;Academy of Economics and Finance, vol. 23(1), pages 64-77, March.
    6. Matthew Gentry & Tong Li & Jingfeng Lu, 2015. "Identification and estimation in first-price auctions with risk-averse bidders and selective entry," CeMMAP working papers CWP16/15, Centre for Microdata Methods and Practice, Institute for Fiscal Studies.
    7. Aizenman, Joshua & Ito, Hiro & Pasricha, Gurnain Kaur, 2022. "Central bank swap arrangements in the COVID-19 crisis," Journal of International Money and Finance, Elsevier, vol. 122(C).
    8. Trottmann, Maria & Zweifel, Peter & Beck, Konstantin, 2012. "Supply-side and demand-side cost sharing in deregulated social health insurance: Which is more effective?," Journal of Health Economics, Elsevier, vol. 31(1), pages 231-242.
    9. Banal-Estañol, Albert & Duso, Tomaso & Seldeslachts, Jo & Szücs, Florian, 2022. "R&D Spillovers through RJV Cooperation," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 51(4), pages 1-10.
    10. Renuka Sane & Susan Thomas, 2020. "From Participation To Repurchase: Low Income Households And Micro‐insurance," Journal of Risk & Insurance, The American Risk and Insurance Association, vol. 87(3), pages 783-814, September.
    11. Joachim Merz & Tim Rathjen, 2011. "Intensity of Time and Income Interdependent Multidimensional Poverty: Well-Being and Minimum 2DGAP – German Evidence," FFB-Discussionpaper 92, Research Institute on Professions (Forschungsinstitut Freie Berufe (FFB)), LEUPHANA University Lüneburg.
    12. Bodory, Hugo & Huber, Martin, 2018. "The causalweight package for causal inference in R," FSES Working Papers 493, Faculty of Economics and Social Sciences, University of Freiburg/Fribourg Switzerland.
    13. Michael Ziegelmeyer & Julius Nick, 2013. "Backing out of private pension provision: lessons from Germany," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, vol. 40(3), pages 505-539, August.
    14. Joseph Mason, 2001. "Do Lender of Last Resort Policies Matter? The Effects of Reconstruction Finance Corporation Assistance to Banks During the Great Depression," Journal of Financial Services Research, Springer;Western Finance Association, vol. 20(1), pages 77-95, September.
    15. Torres, Marcelo de O. & Felthoven, Ronald G., 2014. "Productivity growth and product choice in catch share fisheries: The case of Alaska pollock," Marine Policy, Elsevier, vol. 50(PA), pages 280-289.
    16. Yuen Leng Chow & Isa E. Hafalir & Abdullah Yavas, 2015. "Auction versus Negotiated Sale: Evidence from Real Estate Sales," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 43(2), pages 432-470, June.
    17. Xavier Ramos Morilla & Josep Lluís Raymond Bara & Josep Oliver Alonso, 1999. "Not All University Degrees Yield the Same Return: Private and Social Returns to Higher Education for Males in Spain," Working Papers wpdea9904, Department of Applied Economics at Universitat Autonoma of Barcelona.
    18. Fei Yang & Chunchen Wang, 2023. "Clean energy, emission trading policy, and CO2 emissions: Evidence from China," Energy & Environment, , vol. 34(5), pages 1657-1673, August.
    19. Tarp, Finn & Simler, Kenneth & Matusse, Cristina & Heltberg, Rasmus & Dava, Gabriel, 2002. "The Robustness of Poverty Profiles Reconsidered," Economic Development and Cultural Change, University of Chicago Press, vol. 51(1), pages 77-108, October.
    20. Bauer, Rob & Cosemans, Mathijs & Eichholtz, Piet, 2009. "Option trading and individual investor performance," Journal of Banking & Finance, Elsevier, vol. 33(4), pages 731-746, April.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:inm:ormksc:v:26:y:2007:i:5:p:642-650. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Chris Asher (email available below). General contact details of provider: https://edirc.repec.org/data/inforea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.