Brattle consultants Dr. Lisa Cameron, Prof. Daniel McFadden, and Dr. Pablo Robles have coauthored an article examining common problems that arise when survey-based market simulation models are used to estimate price-premium damages in Product Liability 2022, a journal published by ICLG.
Recent consumer class actions have featured allegations that buyers were owed damages due to a company’s misrepresentation of its product’s attributes. These damages, often called “benefit-of-the-bargain” damages, can arise when buyers would have been unwilling to pay the old price for a product revealed to have attributes different from those previously represented or inferred. In many of these cases, experts have attempted to substitute for or supplement observed real-world data with data obtained from conjoint surveys, in which consumers are asked to state their choices among sets of hypothetical product profiles. The authors explore issues with these surveys and market simulation models based on their data, explaining that the surveys and models often fall short of the academic rigor required to obtain valid damages estimates.
The full article, “Price Premium Damages in Product Market Litigation: Issues in Survey-Based Market Simulations,” is available below.