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Multimodal preference heterogeneity in choice-based conjoint analysis: a simulation study

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  • Nils Goeken

    (Clausthal University of Technology)

  • Peter Kurz

    (Bms Marketing Research + Strategy)

  • Winfried J. Steiner

    (Clausthal University of Technology)

Abstract

The most commonly used variant of conjoint analysis is choice-based conjoint (CBC). Here, hierarchical Bayesian (HB) multinomial logit (MNL) models are widely used for preference estimation at the individual respondent level. A new and very flexible approach to address multimodal and skewed preference heterogeneity in the context of CBC is the Dirichlet Process Mixture (DPM) MNL model. The number and masses of components do not have to be predisposed like in the latent class (LC) MNL model or in the mixture-of-normals (MoN) MNL model. The aim of this Monte Carlo study is to evaluate the performance of Bayesian choice models (basic MNL, HB-MNL, MoN-MNL, LC-MNL and DPM-MNL models) under varying data conditions (especially under multimodal heterogeneity structures) using statistical criteria for parameter recovery, goodness-of-fit and predictive accuracy. The core finding from this Monte Carlo study is that the standard HB-MNL model appears to be highly robust in multimodal preference settings.

Suggested Citation

  • Nils Goeken & Peter Kurz & Winfried J. Steiner, 2024. "Multimodal preference heterogeneity in choice-based conjoint analysis: a simulation study," Journal of Business Economics, Springer, vol. 94(1), pages 137-185, January.
    • Handle: RePEc:spr:jbecon:v:94:y:2024:i:1:d:10.1007_s11573-023-01156-6
    DOI: 10.1007/s11573-023-01156-6
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    References listed on IDEAS

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