Title: Prelaunch Demand Estimation
Speaker: Xinyu Cao, Massachusetts Institute of Technology
Time: Wednesday, 15 November, 13:30-15:30
Location: Room K01, Guanghua Building 2
Demand estimation is important for new-product strategies, but is challenging in the ab- sence of actual sales data. We develop a cost-effective method to estimate the demand of new products based on choice experiments. Our premise is that there exists a structural relationship between manifested demand and the probability of consumer choice being realized. We illustrate the mechanism using a theory model, in which consumers learn their product valuation through effort and their effort incentive depends on the realization probability. We run a large-scale choice experiment on a mobile game platform, where we randomize the price and realization probability of a new product. We find reduced-form support of the theoretical prediction and the decision effort mechanism. We then estimate a structural model of consumer choice. The structural estimates allow us to infer actual demand from choices of moderate to small realization probabilities.
Xinyu Cao, Ph.D. Candidate in Massachusetts Institute of Technology, her research interests are:
Ø Substantive: Market Research, Digital Marketing, Social Media, Emerging Markets
Ø Methodology: Field Experiments, Applied Game Theory, Structural Modeling
Your participation is warmly welcomed!