On Conjoint Analysis and Quantal Choice Models

Conjoint analysis (or trade-off analysis) has become increasingly used in marketing. Essentially, the techniques attempt to parse the appeals of a product or concept into a set of factors, assign utility values to the separate levels of each factor, and finally, under the assumption of separability, determine the utility value of any product or concept by adding (or multiplying) the utility values of the individual levels of each of the factors embodied in the product or concept. A good expository description of conjoint analysis is given in Green and Srinivasan (1978). For notational convenience, I present a brief description herein. Formally, if we are considering n factors, with the ith factor (i = 1, . . . , n) having mi levels, then we shall represent a bundle as an n-tuple (i1, i2, . . , ia), where