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Is this not the Monetary Scaling Trap 'mistake' discussed in multiple papers?

Hi Aaron,
Thanks for answering my question.

I have read multiple papers. In the papers they talk about the Monetary Scaling Trap where they explain this way of working but they also say "We discourage the use of this type of analysis because it is a potentially misleading"

Paper titles:
- Assessing the Monetary value of Attribute levels with Conjoint analysis: warnings and suggestions p2
- Interpreting the Results of Conjoint Analysis p85

What is your opinion on this issue?
asked Aug 30, 2017 by anonymous

1 Answer

0 votes

My first answer was just to walk you through the math that you'd specifically asked for. We generally don't recommend this type of analysis, but we also recognize that it is done very often in practice, so we often find ourselves explaining how to do it.

If I were analyzing this project, I'd try to get stakeholder buy-in on running simulations to find this information instead. Simulations take competitive effects into account, adjust for product similarity, leverage individual information better, and are tunable. I much prefer finding out how price sensitive people are given a realistic scenario than I am finding out their price sensitivity in a vacuum.
answered Aug 30, 2017 by Aaron Hill Silver Sawtooth Software, Inc. (9,245 points)