Abstract

http://ssrn.com/abstract=1676770
 


 



PIE: A Holistic Preference Concept and Measurement Model


Hye-jin Kim


Korea Advanced Institute of Science and Technology (KAIST)

Young-Hoon Park


Cornell University - Samuel Curtis Johnson Graduate School of Management

Eric Bradlow


University of Pennsylvania - Marketing Department

Min Ding


Pennsylvania State University - Department of Marketing

December 27, 2013

Johnson School Research Paper Series No. 33-2010

Abstract:     
Extant preference measurement research, including conjoint analysis, is done in the isolation of one’s own mind. That is, it remains completely silent on the explicit influence of others in the formation of consumer preferences. This paper proposes a new holistic framework of preference, PIE, as well as a measurement method to remedy this problem. The new paradigm posits that consumers evaluate products based on different “needs” which are determined by three sources: (1) P, the physical attributes of the product; (2) I, the individual characteristics of the choice maker; and (3) E, characteristics of an external peer group. To provide an empirically feasible method to capture all three sources of information, we propose and test an incentive-aligned approach, a group-sourced mechanism, which mimics a real life consultation of a consumer making a purchase decision in the presence of her friends. Our results provide support for the PIE framework, including superior predictive performance in a conjoint task that is “stacked against it”. We also show how firms can apply the PIE framework for product design. Practitioners, however, must weigh carefully the benefits of the group-sourced preference measurement with the heavier cognitive burden on the respondents in completing the task.

Number of Pages in PDF File: 49

Keywords: preference measurement, conjoint analysis, incentive alignment, mechanism design, new products

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Date posted: September 16, 2010 ; Last revised: December 27, 2013

Suggested Citation

Kim, Hye-jin and Park, Young-Hoon and Bradlow, Eric and Ding, Min, PIE: A Holistic Preference Concept and Measurement Model (December 27, 2013). Johnson School Research Paper Series No. 33-2010. Available at SSRN: http://ssrn.com/abstract=1676770 or http://dx.doi.org/10.2139/ssrn.1676770

Contact Information

Hye-jin Kim (Contact Author)
Korea Advanced Institute of Science and Technology (KAIST) ( email )
373-1 Kusong-dong
Yuson-gu
Taejon 305-701, 130-722
Korea
Young-Hoon Park
Cornell University - Samuel Curtis Johnson Graduate School of Management ( email )
Ithaca, NY 14853-6201
United States
(607) 255-3217 (Phone)

Eric Bradlow
University of Pennsylvania - Marketing Department ( email )
700 Jon M. Huntsman Hall
3730 Walnut Street
Philadelphia, PA 19104-6340
United States
215-898-8255 (Phone)

Min Ding
Pennsylvania State University - Department of Marketing ( email )
University Park, PA 16802-3306
United States
HOME PAGE: http://www.planetding.org
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