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So we can have different proportions in one conditional attribute for interaction effects?

Thanks very much for the detailed response Bryan.

I think I understand your first suggestion, but just to double-check: It is okay to have different proportional increases/decreases for different SKUs within a single price attribute and have these conditional and then use main effects + interaction effects? Our worry is that we would be reliant on the interaction effects to work, as the main effects for price would not be very meaningful.

FYI, we will use HB estimation.

related to an answer for: Conditional pricing within alt-spec design
asked Dec 16, 2016 by Jacqui

1 Answer

0 votes
Indeed, you can put whatever patterns of prices in the conditional pricing table IF you will estimate the main effects + interaction effects.  This is mathematically equivalent in the modeling step as doing alt-specific prices for each SKU.  To interpret the total price effect for each SKU, you would need to add the main effect of price to the interaction effect of price.
answered Dec 16, 2016 by Bryan Orme Platinum Sawtooth Software, Inc. (134,015 points)