On the Suitability of Econometric Demand Models in Design for Market Systems

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dc.contributor.author Frischknecht, Bart en_US
dc.contributor.author Whitefoot, Katie en_US
dc.contributor.author Papalambros, Panos en_US
dc.contributor.editor en_US
dc.date.accessioned 2012-03-12T11:23:31Z
dc.date.available 2012-03-12T11:23:31Z
dc.date.issued 2010 en_US
dc.identifier 2010000187 en_US
dc.identifier.citation Frischknecht Bart, Whitefoot Katie, and Papalambros Panos 2010, 'On the Suitability of Econometric Demand Models in Design for Market Systems', American Society of Mechanical Engineers, vol. 132, no. 12, pp. 121007 en_US
dc.identifier.issn 1050-0472 en_US
dc.identifier.other C1 en_US
dc.identifier.uri http://hdl.handle.net/10453/17550
dc.description.abstract A goal of design for market systems research is to predict demand for differentiated products so that counterfactual experiments can be performed based on design changes. We review conventional methods and propose an additional method to evaluate the suitability of econometric demand models estimated from revealed preference data for use in product design studies. We evaluate one demand model form from literature and two newly constructed forms for new vehicle demand along existing metrics of fit and predictive validity as well as a newly developed metric of proportional substitution sensitivity. We show that a model that includes horizontally differentiated preferences for size performs better under metrics of fit and predictive validity but that no model relaxes the IIA property satisfactorily to avoid exploitation by design optimization. We conduct design studies separately, applying each demand model form assuming the automotive market is in Bertranda??Nash price equilibrium. Results illustrate that the influence of the demand model form on the optimum in terms of design variables and expected firm profit is significant. en_US
dc.language en_US
dc.publisher American Society of Mechanical Engineers en_US
dc.title On the Suitability of Econometric Demand Models in Design for Market Systems en_US
dc.parent Journal Of Mechanical Design en_US
dc.journal.volume 132 en_US
dc.journal.number 12 en_US
dc.publocation US en_US
dc.identifier.startpage 1 en_US
dc.identifier.endpage en_US
dc.identifier.endpage 11 en_US
dc.cauo.name BUS.Centre for the Study of Choice en_US
dc.conference Verified OK en_US
dc.for 091307 en_US
dc.personcode 108926 en_US
dc.personcode 0000064955 en_US
dc.personcode 0000062041 en_US
dc.percentage 100 en_US
dc.classification.name Numerical Modelling and Mechanical Characterisation en_US
dc.classification.type FOR-08 en_US
dc.edition en_US
dc.custom en_US
dc.date.activity en_US
dc.location.activity en_US
dc.description.keywords automobile industry, demand forecasting, econometrics, industrial economics, market research, profitability en_US

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