HB_notes.txt

Suppose that Brian is releasing his debut rap album and wants to design a strategic marketing campaign to not only optimize spins and royalties, but also stay exclusive on one streaming service.  As a rapper/data scientist, he's interested in making predictions about the music streaming marketplace.  He gathered survey data from his target audience, in which respondents selected their preferred app from a choice set of product profiles.


HB model
when you look at the likelihood function, and decide on the right priors, it may be appropriate to use priors that themselves depend on other parameters not mentioned in the likelihood 



use HB with constraints upon the signs of attribute coefficients other than brand
specify signs when order of preference within attributes is obvious +/-
estimate individual-level conjoint measures
HB estimated individual-level part-worths
HB model - train/test split, sensitivity/true positive rate baseline 25%
training set sensitivity 93.7, test 52.6
requires coding of profile cells

contingency table of top-ranked brands and most valued attribues
place consumers into groups based on revealed preferences
mosaic plot
most favored attribues are determined relative to the entire study group- we compute the value of an attribute to an individual as a standard score versus the entire study group
conventional attribute importance calculations are dependent upon relative ranges of sets of attribue levels utilized in surveys.


consumer preference and market response
figures
heterogeneity in consumer preferences

subsets of users for whom the selected brand is the top ranked

parallel coordinate plots explore the potential for brand switching
individual part-worth profiles

market simulation, constructed from individual level conjoint measures, as we obtain from Bayesian methods
most importnat contribution of choice models is predicting consumer behavior in the marketplace
work for spotify, know what price to charge
for instance, objective command 25% share in the market


describe the competitive products in terms of attribues, creating simulated choice sets for input to the market simulation
fix 3 competitors and vary only spotify's price in the simulation's choice set input

take market simulations further by considering the actions and reactions of competitive firms in teh marketplace - ex. 2 player competitive game, i.e. both have the option of lowering price by 5 dollars
run simulations for each of the 4 outcomes, using unit costs to make entries int eh game outcome or payoff table

limiataions - hypothetical products, prices and competitors
error bands can be provided around all conjoint measures, drawing on posterior distributions obtained from an HB estimation procedure
simulation guies management by predicting what users might do w/ new product or price change

choice based conjoint studies iwth product profiles defined in terms of brand and price
brand equity, measuring what a brand is worth relative to other brands, in fact, with HB-estimated part-worths, brand equity can be assessed for each individual in a conjoint study
alternative data generation, website or app where user is presented with choice, any data that involves choices and prices