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Conditional Pricing (price function)

Hi!

We want to calculate the WTP for quality features for different positioned brands. For this we use the conditional cbc/hb design you see below.
Our problem is, that we derive for all three Brandposition levels the same price function.  

cbc/hb design:
- Brandposition: Premium, Standard, NoName
- Quality feature: a,b,c
- Preis: -20%, avg, +20% (conditional for each Brand level)

What are we doing wrong? Do we have to add a price-brand interaction in the CBC utility estimation interface?!

We use  SSI version 8.4.8, cbc/hb and SMRT.
Many thanks in advance for your help!!!
asked Jun 14, 2018 by Alex

1 Answer

0 votes
You could test to see if an interaction adds significantly to your model fit, but I don't see why you can't calculate WTP even with what you have.  If the WTP is equivalent to 30% of your +20% to -20% price range, then that's equivalent to 0.30 x 0.40 = 0.12 of the average price.  If that average price is one thing for Premium and another for standard and another for generic, then you have 3 different WTP values.  

But perhaps I've misunderstood the problem?
answered Jun 18, 2018 by Keith Chrzan Platinum Sawtooth Software, Inc. (79,225 points)
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