Models for bundle preference estimation using configuration data [thesis]

I-Hsuan Shaine Chiu
Bundling is pervasive in the market; examples include desktop computer bundles, digital single-lens reflex camera kits and cookware sets, to name a few. The advancement in information technology allows more and more companies to provide customized bundles to customers. Wind and Mahajan (1997) recognize the importance of researching mass customization and suggest companies to use consumers' input "as a response (to a conjoint analysis-type task) that provides operational guidelines for the
more » ... of products to inventory for the segment that is not willing to pay the premium required for customized products". In addition to conjoint analysis, researchers and practitioners are using a "buildyour-own-bundle" or configuration approach. In a configuration study, participants are presented with a menu from which they can choose individual items to build up their desired product bundle. The process mimics the real decision process, is easy to implement, and is straight forward for participants to understand. However, as the size of the menu grows, the number of possible bundles grows geometrically. This results in computation difficulties. This dissertation investigates the application of configuration approach, and examines if it extends and complements the choice-based conjoint (CBC) approach. We first develop an aggregate model for analyzing configuration data. We show analytically that the aggregate choice model consistent with configuration data has a closed form representation which takes the form of a Multivariate Logistic (MVL) model. We discuss the strengths ii
doi:10.17077/etd.rokmennd fatcat:h5qls3midbhehe5ntdfkdp7usu