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Predicting new service adoption with conjoint analysis: external validity of BDM-based incentive-aligned and dual-response choice designs

Author

Listed:
  • Nils Wlömert

    () (University of Hamburg)

  • Felix Eggers

    () (University of Groningen)

Abstract

Abstract In this paper, we compare the standard, single-response choice-based conjoint (CBC) approach with three extended CBC procedures in terms of their external predictive validity and their ability to realistically capture consumers’ willingness to pay: (1) an incentive-aligned CBC mechanism (IA-CBC), (2) a dual-response CBC procedure (DR-CBC), and (3) an incentive-aligned dual-response CBC approach (IA-DR-CBC). Our empirical study features a unique sample of 2,679 music consumers who participated in a conjoint choice experiment prior to the market entry of a new music streaming service. To judge the predictive accuracy, we contacted the same respondents again 5 months after the launch and compared the predictions with the actual adoption decisions. The results demonstrate that IA-CBC and DR-CBC both increase the predictive accuracy. This result is promising because IA-CBC is not applicable to every research context so that DR-CBC provides a viable alternative. While we do not find an additional external validity improvement through the combination of both extensions, the IA-DR-CBC approach yields the most realistic willingness-to-pay estimates and should therefore be preferred when incentive alignment is feasible.

Suggested Citation

  • Nils Wlömert & Felix Eggers, 2016. "Predicting new service adoption with conjoint analysis: external validity of BDM-based incentive-aligned and dual-response choice designs," Marketing Letters, Springer, vol. 27(1), pages 195-210, March.
  • Handle: RePEc:kap:mktlet:v:27:y:2016:i:1:d:10.1007_s11002-014-9326-x
    DOI: 10.1007/s11002-014-9326-x
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    References listed on IDEAS

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    1. Olivier Toubia & Duncan I. Simester & John R. Hauser & Ely Dahan, 2003. "Fast Polyhedral Adaptive Conjoint Estimation," Marketing Science, INFORMS, vol. 22(3), pages 273-303.
    2. Min Ding & Rajdeep Grewal & John Liechty, 2005. "Incentive-aligned conjoint analysis," Framed Field Experiments 00139, The Field Experiments Website.
    3. Timothy J. Gilbride & Greg M. Allenby, 2004. "A Choice Model with Conjunctive, Disjunctive, and Compensatory Screening Rules," Marketing Science, INFORMS, vol. 23(3), pages 391-406, October.
    4. repec:eee:ijrema:v:27:y:2010:i:1:p:25-32 is not listed on IDEAS
    5. Jeff Brazell & Christopher Diener & Ekaterina Karniouchina & William Moore & Válerie Séverin & Pierre-Francois Uldry, 2006. "The no-choice option and dual response choice designs," Marketing Letters, Springer, vol. 17(4), pages 255-268, December.
    6. Greg Allenby & Geraldine Fennell & Joel Huber & Thomas Eagle & Tim Gilbride & Dan Horsky & Jaehwan Kim & Peter Lenk & Rich Johnson & Elie Ofek & Bryan Orme & Thomas Otter & Joan Walker, 2005. "Adjusting Choice Models to Better Predict Market Behavior," Marketing Letters, Springer, vol. 16(3), pages 197-208, December.
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    Cited by:

    1. Erik Brynjolfsson & Felix Eggers & Avinash Gannamaneni, 2018. "Using Massive Online Choice Experiments to Measure Changes in Well-being," NBER Working Papers 24514, National Bureau of Economic Research, Inc.
    2. repec:spr:rvmgts:v:11:y:2017:i:3:d:10.1007_s11846-016-0201-4 is not listed on IDEAS

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