A Simple Mechanism to Incentive Align Conjoint Experiments

International Journal of Research in Marketing, Vol. 27, No. 1, pp. 25-32, 2010

25 Pages Posted: 17 Sep 2009 Last revised: 19 Dec 2011

See all articles by Songting Dong

Songting Dong

Australian National University (ANU) - Faculty of Economics & Commerce

Min Ding

Pennsylvania State University - Department of Marketing

Joel Huber

Duke University - Fuqua School of Business

Date Written: September 14, 2009

Abstract

Recent literature has established the importance of incentive aligning research participants in conjoint analysis. Pertinent studies have also proposed and validated a fairly general incentive-aligning mechanism (Willingness-to-Pay, or WTP), which achieves incentive alignment by using respondents’ data to determine their value for a reward product (Ding, 2007). This mechanism, however, requires an estimation of the value of money, and is relatively difficult for the average respondent to understand. We propose an alternative mechanism, based on inferred rank order for situations where conjoint practitioners have more than one version of real products. In an empirical test of choice-based conjoint, we show that the RankOrder mechanism leads to substantial improvement in predictive performance when compared to non-aligned hypothetical choices. A second test shows that both incentive-aligned mechanisms - RankOrder and WTP - produce very similar predictive performances. RankOrder, however, dominates the WTP mechanism in user preference, an outcome shown both by perceived understanding and by the incentive-aligned money that respondents are willing to pay to switch from one mechanism to the other.

Keywords: Experimental Economics, Conjoint Analysis, Product Development, Incentive Alignment, Choice Experiments

JEL Classification: C42, C72, C81, C91, C93, M31

Suggested Citation

Dong, Songting and Ding, Min and Huber, Joel, A Simple Mechanism to Incentive Align Conjoint Experiments (September 14, 2009). International Journal of Research in Marketing, Vol. 27, No. 1, pp. 25-32, 2010. Available at SSRN: https://ssrn.com/abstract=1473138

Songting Dong (Contact Author)

Australian National University (ANU) - Faculty of Economics & Commerce ( email )

Canberra, ACT 0200
Australia

Min Ding

Pennsylvania State University - Department of Marketing ( email )

University Park, PA 16802-3306
United States

HOME PAGE: http://www.planetding.org

Joel Huber

Duke University - Fuqua School of Business ( email )

Box 90120
Durham, NC 27708-0120
United States
919-660-7785 (Phone)

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