On the Suitability of Econometric Demand Models in Design for Market Systems

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dc.contributor.author Frischknecht, BD
dc.contributor.author Whitefoot, K
dc.contributor.author Papalambros, PY
dc.date.accessioned 2012-03-12T11:23:31Z
dc.date.issued 2010-01
dc.identifier.citation Journal Of Mechanical Design, 2010, 132 (12), pp. 1 - 11
dc.identifier.issn 1050-0472
dc.identifier.other C1 en_US
dc.identifier.uri http://hdl.handle.net/10453/17550
dc.description.abstract A goal of design for market systems research is to predict demand for differentiated products so that counterfactual experiments can be performed based on design changes. We review conventional methods and propose an additional method to evaluate the suitability of econometric demand models estimated from revealed preference data for use in product design studies. We evaluate one demand model form from literature and two newly constructed forms for new vehicle demand along existing metrics of fit and predictive validity as well as a newly developed metric of proportional substitution sensitivity. We show that a model that includes horizontally differentiated preferences for size performs better under metrics of fit and predictive validity but that no model relaxes the IIA property satisfactorily to avoid exploitation by design optimization. We conduct design studies separately, applying each demand model form assuming the automotive market is in BertrandâNash price equilibrium. Results illustrate that the influence of the demand model form on the optimum in terms of design variables and expected firm profit is significant.
dc.publisher American Society of Mechanical Engineers
dc.relation.isbasedon 10.1115/1.4002941
dc.title On the Suitability of Econometric Demand Models in Design for Market Systems
dc.type Journal Article
dc.parent Journal Of Mechanical Design
dc.journal.volume 12
dc.journal.volume 132
dc.journal.number 12 en_US
dc.publocation US en_US
dc.identifier.startpage 1 en_US
dc.identifier.endpage en_US
dc.identifier.endpage 11 en_US
dc.cauo.name BUS.Centre for the Study of Choice en_US
dc.conference Verified OK en_US
dc.for 091307 Numerical Modelling and Mechanical Characterisation
dc.personcode 108926
dc.percentage 100 en_US
dc.classification.name Numerical Modelling and Mechanical Characterisation en_US
dc.classification.type FOR-08 en_US
dc.edition en_US
dc.custom en_US
dc.date.activity en_US
dc.location.activity en_US
dc.description.keywords automobile industry, demand forecasting, econometrics, industrial economics, market research, profitability en_US
pubs.embargo.period Not known
pubs.organisational-group /University of Technology Sydney
pubs.organisational-group /University of Technology Sydney/Faculty of Business
pubs.organisational-group /University of Technology Sydney/Strength - Study of Choice
utslib.copyright.status Closed Access
utslib.copyright.date 2015-04-15 12:17:09.805752+10
utslib.collection.history Closed (ID: 3)


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