What is Conjoint Analysis?
Conjoint Analysis is a survey technique and discrete-choice model used in market research to measure consumer preferences for products and services. The name "conjoint" comes from the phrase "Considered Jointly" because it almost always involves a comparison of one product with another. It involves making trade-offs between alternatives, instead of evaluating one product in isolation. The trade-offs consumers make when choosing between products in a conjoint survey are used to "reveal" how strongly different product attributes drive consumer behavior and preferences.
Utility is a term economists use that means "the value consumers derive from the use of a products." The underlying assumption of conjoint analysis is that a consumer's overall value, or utility, for a product is a weighted sum of the value of each of its parts.
In a choice-based conjoint analysis survey, one does not need to describe a product in terms of all of its possible attributes. Instead, one can use a set of attributes that are sufficient for the purposes of the analysis and tell respondents that all other attributes will be held constant for the purpose of the exercise.
Conjoint analysis is not just used in litigation. It is a widely used discrete-choice model used in quantitative market research that has been around for over 45 years and is the subject of an enormous amount of academic research.
HOW DOES CONJOINT ANALYSIS WORK?
Conjoint analysis forces respondents to make trade-offs to determine utility for a product with a particular set of features. Respondents are presented with a series of choices or tasks that represent product choices by several attributes and levels of those attributes.
How is Conjoint Analysis Used in Litigation?
MARKET RESEARCH SURVEYS FOR USE IN LITIGATION
In 1975, Federal Rule of Evidence 703 allowed survey data to be used as evidence in legal proceedings, stating that surveys were allowed if they were "of a type reasonably relied upon by experts in the particular field in forming opinions or inferences upon the subject." The focus also shifted to whether surveys were "conducted in accordance with generally accepted survey principles" and the "results were used in a statistically correct way."
Today, litigators work with survey researchers to obtain information on people's attitudes, behavior and preferences.
CONJOINT ANALYSIS FOR CLASS ACTION LITIGATION
Conjoint Analysis can provide a basis for the calculation of damages for class action matters and has been used successfully in class actions where courts have granted class certification and a damages figure has been proposed. It is well adapted to the benefit of the bargain theory of a class action case. When looking at using conjoint analysis for class action surveys, there are several important outputs from conjoint analysis that may be pertinent to a case. Conjoint analysis can calculate:
- Reduction in market value due to the possible absence of a promised feature.
- The price premium due to the presence of a feature.
Reduction in market value can be defined as how much less money a product should have sold for by not having a feature included, having a defective feature, or having a misleading claim or feature.
The reduction in market value or price premium can be calculated as a dollar or percentage figure which can be directly applied to actual sales for a product in a damages or settlement calculation.
How Do AMS Experts Design Conjoint Surveys for Litigation?
Although every case is at least slightly different, the key steps of the survey process are generally as follows:
1. Conduct Exploratory Research: Determine who to survey, how to qualify people in the survey sample, if they can be recruited in high enough numbers and what to ask.
2. Design and Program Questionnaire: Choose and develop the right attributes and levels. We program our conjoint analysis surveys using Sawtooth Software, Sawtooth Software is a leading provider of conjoint analysis software. Its software is used by academics and business practitioners around the world.
3. Pretest Survey Questionnaire: Validate questions and assure they are unbiased and non-leading. Ensure attributes and levels are meaningful, clear, and expressed in consumers' terms.
4. Field Survey with Online Panel: Partner with a reputable online sample provider to field survey and manage data collection.
5. Analyze Data and Write Expert Report: Clean and analyze collected data. Write an expert report of the findings.
AMS can also help with rebuttal strategy for the conjoint for class action cases: our survey experts have extensive experience preparing rebuttals and critiques of opposing expert reports, and can provide guidance on trial questioning of opposing expert witnesses.
Considerations When Conducting Conjoint Analysis
When deciding whether conjoint analysis is a methodology to consider using for calculating damages in a case, it is important to think about a number of issues related to the design and execution of a conjoint study. When deciding whether conjoint analysis is a methodology to consider using for calculating damages in a case, it is important to think about a number of issues related to the design and execution of a conjoint study.
DESIGN ISSUES & OTHER CONSIDERATIONS
- Setting up and running a conjoint can be relatively easy; choosing the attributes takes the most effort and requires the most expertise.
- The conjoint survey expert and research firm should be well-versed in conjoint survey and analysis methods.
- Work with an economist who knows how to calculate damages using conjoint results, specifically for class action matters.
- Consider if the set of products at issue can be described by a single conjoint analysis or requires multiple.
- Determine if there are enough consumers to recruit to take the survey.
- Assess if a survey can be developed so that people can understand and evaluate the attributes and products that are shown or described in the survey.
- Determine if the range of market prices can be examined and incorporated to deal with supply-side issues.
Examples of Conjoint Surveys in Action
CLASS ACTION LITIGATION CASE EXAMPLES
Below is a list of some major cases that have survived a Daubert Challenge, if there was one, received class certification, and received a favorable settlement to the best of our knowledge. In each of the following cases, Steven Gaskin was the conjoint analysis survey expert. If you have a case requiring a conjoint analysis survey expert, please contact Patty Yanes.
- Sanchez-Knutson v. Ford Motor Company
- Lenovo Adware Litigation
- Khoday & Townsend v. Symantec Corp. and Digital River, Inc.
- Kenai Batista et al. v. Nissan North America, Inc.
PATENT INFRINGEMENT CASE EXAMPLES
Below is a list of case studies that discuss patent infringement cases that used conjoint surveys.
The AMS Difference
AMS has extensive experience developing and implementing conjoint surveys for class action matters. Employing conjoint analysis and discrete-choice methodologies, we are able to work with economists to calculate and analyze damages in civil suits. AMS Survey Expert Patty Yanes specializes in discrete-choice methodologies and is a master of conjoint analysis, maximum-difference scaling (MaxDiff), total unduplicated reach and frequency (TURF), and choice-modeling techniques.