Reference Dependence and Conjoint Analysis

Davis Brennan (), Currim Imran S. () and Sarin Rakesh K. ()
Additional contact information
Davis Brennan: Baylor University
Currim Imran S.: University of California - Irvine
Sarin Rakesh K.: University of California, Los Angeles

Review of Marketing Science, 2012, vol. 10, issue 1, 29

Abstract: Although there is enormous evidence that reference levels influence preferences, conjoint models, one of the most successful marketing research tools, assume that preferences depend on the absolute levels of attributes. In this paper we investigate the relevance of reference effects in two settings, compositional or self-explicated models in experimental studies 1 and 2, and decompositional or choice-based models in experimental study 3. In particular, we introduce a simple modification of the traditional self-explicated conjoint model which permits dependence of preference on reference levels. By eliciting gains and losses from expectations the model is adaptable to changes in respondents' reference points, which the traditional model is incapable of. Reference options are found to clearly affect subject choices in studies 1 and 2. In addition, the reference dependent self-explicated model is found to offer useful predictions when reference points are manipulated in study 1, and improve on predictions of its traditional counterpart when reference points are measured in study 2. In contrast, in study 3, the choice-based model’s diagnostics and predictions are found to be robust to reference point manipulations. Taken together, these results suggest that the self-explicated model is more suited than the choice-based model to understanding and predicting how respondents make judgments relative to reference points because reference points and gains and losses from reference levels are more salient in the self-explicated model. We discuss implications for managers constructing conjoint models in product-market settings wherein reference points are changing due to new product introductions or marketing efforts.

Keywords: reference dependence; conjoint analysis (search for similar items in EconPapers)
Date: 2012
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://doi.org/10.1515/1546-5616.1141 (text/html)
For access to full text, subscription to the journal or payment for the individual article is required.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:bpj:revmkt:v:10:y:2012:i:1:n:1

Ordering information: This journal article can be ordered from
https://www.degruyter.com/journal/key/roms/html

DOI: 10.1515/1546-5616.1141

Access Statistics for this article

Review of Marketing Science is currently edited by Ram C. Rao

More articles in Review of Marketing Science from De Gruyter
Bibliographic data for series maintained by Peter Golla ().