Pros & Cons of Market Simulations Using RFC vs. HB Draws

On-demand Webinar

Randomized First Choice (RFC) is the default market simulation method in Sawtooth Software’s market simulators. It penalizes products that share multiple attribute levels in common, reducing IIA (red bus/blue bus) problems. RFC is faster and yet at the same time a simplification compared to the full treatment of simulating on HB draws, which is truer to the HB model and more academically defensible.

Webinar Details

In this webinar, we describe differences in the statistical approach and practical outcomes between RFC and simulating on HB draws. We demonstrate why we recommend turning off the correction for similarity for the Price attribute. We give advice regarding when simulating on the HB draws may be superior to RFC (hint: two attribute studies involving SKU and price). We also demonstrate that RFC does a better job in reducing share inflation for near-identical products compared to HB Draws, when similarity is defined as sharing the same attribute levels.

Join us for a dive into the inner workings of Sawtooth Software simulators to gain a greater understand of what's actually going on behind the scenes, as well as learn a few power tricks for building simulators that use actual HB draws.

This webinar will take place on Thursday, September 24, 2020 from 9:00 AM to 10:00 AM MDT. No prior experience is necessary. 24 hours after the session has concluded the recording and materials will be found below.

Presenter(s)

Bryan Orme

President | Sawtooth Software, Inc.

Webinar Assets

Rfc Vs Hbdraws

15 July 2021

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