Effect of Choice Complexity on Design Efficiency in Conjoint Choice Experiments

Abstract

Conjoint choice experiments have become a powerful tool to explore individual preferences. The consistency of respondents' choices depends on the choice complexity. For example, it is easier to make a choice between two alternatives with few attributes than between five alternatives with several attributes. In the latter case it will be much harder to choose the preferred alternative which is reflected in a higher response error. Several authors have dealt with this choice complexity in the estimation stage but very little attention has been paid to set up designs that take this complexity into account. The core issue of this paper is to find out whether it is worthwhile to take this complexity into account in the design stage. We construct efficient semi-Bayesian D-optimal designs for the heteroscedastic conditional logit model which is used to model the across respondent variability that occurs due to the choice complexity. The degree of complexity is measured by the Entropy, as suggested by Swait and Adamowics (2001). The proposed designs are compared with a semi-Bayesian D-optimal design constructed without taking the complexity into account. The simulation study shows that it is much better to take the choice complexity into account when constructing conjoint choice experiments.