Simulating changing consumer preferences: A dynamic conjoint model

In general, the integration of different modeling philosophies is a successful enterprise. This paper presents a concept that integrates two approaches, conjoint analysis and multi-agent simulation. The concept also employs some notions of social network analysis, consumer behavior modeling, and word-of-mouth marketing. These methods are self-complimentary: for example, conjoint analysis may serve as a perfect tool to supply multi-agent models with behavioral data, while multi-agent simulation offers dynamics to the static results of conjoint analysis. The idea of dynamic conjoint modeling is based on the assumption that one can predict an individual's purchases on the basis of his/her measured product preferences, communication habits and market behavior attributes. Dynamic conjoint modeling involves a simulated series of conjoint analyses executed by means of each time-step. This paper outlines a market model to simulate the association between consumers' communication and sales.