The Dependent Poisson Race Model and Modeling Dependence in Conjoint Choice Experiments

Abstract

Conjoint choice experiments are used widely in marketing to study consumer preferences amongst alternative products. We develop a class of choice models, belonging to the class of Poisson race models, that describe a random utility which lends itself to a process-based description of choice. The models incorporate a dependence structure which captures the relationship between the attributes of the choice alternatives and which appropriately moderates the randomness inherent in the race. The new models are applied to conjoint choice data and are shown to have performance markedly superior to that of independent Poisson race models and of the multinomial logit model.

Keywords: Bayesian model, dependent processes, dominance, multinomial logit model

JEL Classification: C11, C25, M31