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Discrete Choice and Competitive Reactions: End-to-End Simulation

Although discrete choice (choice-based conjoint) analysis has become a widely used technique for the elicitation of consumer preferences and hence a foundation for product design, to the best of our knowledge, there exists neither free and open-source nor commercial software that covers the game-theoretic simulation of competitive reactions among firms based on discrete choice models to improve decision making beyond traditional product (line) optimization. The package does not only provide functions to fill this gap but comprises an entire simulation pipeline including the upstream processes of discrete choice analysis itself. It ranges from preference generation, choice design, design assessment, error and response simulation, through hierarchical Bayesian estimation of mixed logit models as well as convergence and model assessment, to Nash equilibrium computation. Doing so, it partly draws from established packages concerned with discrete choice analysis. While its structure generally aims towards end-to-end simulation as well as simulation of competitive dynamics based on real data, all its key elements mentioned above may be of use independently of each other. A paper accompanying the package will be available and linked here shortly.

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