Capturing Individual Level Behavior In DCM

Kurz P., Binner S., 2015 – Sawtooth Software Conference – USA 2015

Can discrete choice models (DCMs) reliably capture individual-level preferences – or does shrinkage distort the results?

The study shows that shrinkage in hierarchical Bayes models often underestimates individual preferences. Especially with small sample sizes or few choice tasks, this can distort results—particularly for niche segments.