Consumer choice of modularized products : a conjoint choice experiment approach

Recent increases in flexibility and automation in the production of goods and services allow a growing number of suppliers to offer their products in flexible sets of modules from which consumers can create their own individualized packages. This paper addresses the question how consumer choices of such modularized products can be modeled and measured by applying conjoint choice experiments. We analyze conceptually the structure of individual consumers choices of modularized products and the role of the error component in random utility models of these choices. We propose a simple experimental conjoint choice design strategy that can support estimation of this type of models. An empirical illustration in the area of travel package choice is discussed.