Nonparametric Discrete Choice Experiments with Machine Learning Guided Adaptive Design

Mingzhang Yin, Ruijiang Gao, Weiran Lin, Steven M. Shugan

Keywords: Experiment Design, Discrete Optimization, Conjoint Analysis

TL;DR: The paper proposes a new gradient-based, nonparametric, adaptive, scalable discrete choice experiment for product design.

Abstract: Designing products to meet consumers' preferences is essential for a business's success. We propose Gradient-based Survey (GBS), a discrete choice experiment for multiattribute product design. The experiment elicits consumer preferences through a sequence of paired comparisons for partial profiles. GBS adaptively constructs paired comparison questions based on the respondents' previous choices. Unlike the traditional random utility maximization paradigm, GBS is robust to model misspecification by not requiring a parametric utility model. Cross-pollinating the machine learning and experiment design, GBS is scalable to products with hundreds of attributes and can design personalized products for heterogeneous consumers. We demonstrate the advantage of GBS in accuracy and sample efficiency compared to the existing parametric and nonparametric methods in simulations.

Submission Number: 26