Networks are ubiquitous in life, structuring options available for choice and influencing their relative attractiveness. In this article, we propose an integration of network science and choice theory beyond merely incorporating metrics from one area into models of the other. We posit a typology and framework for “network-choice models” that highlight the distinct ways choices occur in and influence networked environments, as well as two specific feedback processes that guide their mutual interaction, emergent valuation and contingent options. In so doing, we discuss examples, data sources, methodological challenges, anticipated benefits, and research pathways to fully interweave network and choice models.
Plug-in electric vehicles (PEVs) offer a promising pathway to decarbonizing the personal transportation sector, but PEV sales remains low. Prior research has found that direct experience with PEVs increases consumers' stated purchase consideration, but these studies have used relatively long exposure times (days to months) with a PEV. To assess the effect of shorter exposure times (e.g. minutes) on stated purchase consideration, we conducted an experiment at the 2019 Washington D.C. Auto Show. Participants (n = 6,518) were asked to rate their level of consideration to adopt a PEV before and after riding in one of four different PEVs for just three to five minutes. We find that the experience of riding in a PEV on average had a significant, positive effect on participants' consideration ratings. We also find that the vast majority of respondents were unable to correctly answer basic knowledge questions about refueling a PEV and federal subsidies available for purchasing a PEV. These results suggest that while consumer knowledge about PEVs remains low, short rides or drives in a PEV could be an effective, more scalable strategy for increasing PEV consideration across larger populations.
Meeting the goals of the Paris Agreement will require net zero greenhouse emissions by 2050 and substantial reductions before then. It will also require collaboration with China, which has emerged as the global leader in the mass production of low-carbon energy technologies (LCETs). In part because of China's investments in manufacturing, the LCETs required to meet climate targets have become increasingly cost-competitive with fossil fuel sources (1). But some attribute China's rapid rise in LCET sectors to unfair industrial policies—such as forced technology transfer requirements, massive subsidies, and outright intellectual property (IP) theft—aimed at strategically dominating the next generation of energy technologies (2). Trade relations between China and the world are currently unsettled, especially with the United States, a leading producer of both LCET research and development (R&D) and greenhouse gas (GHG) emissions. Against this backdrop, we outline why engaging with China is the more promising path to accelerate the global deployment of LCETs and to rapidly bring new technologies to mass production.
A vast literature on technology transitions within industries suggests that early phases of new technologies are marked by periods of intense experimentation, but we know little about the conditions under which these periods emerge. We apply inductive, grounded theory-building techniques to examine what prompts firms to experiment across one emerging technology platform—plug-in electric vehicles (PEVs)—in China. Triangulating annual vehicle make and model sales data from 2003-2016 (plus monthly data from 2010-2016); 112 English and Mandarin archival documents from industry, academic, and news outlets; and 51 semi-structured interviews with industry, government, and academic stakeholders, we develop four in-depth case studies. We find that in contrast to the innovation trajectories of multinational and Chinese arms of joint venture (JV) firms, independent domestic Chinese firms (those with no history of international JV partnerships) are undertaking significant experimentation across multiple levels—infrastructure, core system, subsystem, and component—of the emerging PEV technology platform. We propose the concept of “institutional complementarities” to describe how interactions among institutions— here the national JV regulation and local market support and subsidies—may have turned regional markets into protected laboratories, extending the incubation periods for independent domestic firm experimentation. While this diverse experimentation may be an important antecedent of technology transition, consolidation induced by national policy standardization or competitive pressure may be required for PEV innovations to scale beyond their early, protected regional markets.
A decarbonized future will require a transition to lower carbon fuels for personal transportation. We study consumer preferences for combustion fuels including gasoline, diesel, natural gas, and E85 (85% ethanol and 15% gasoline) using consumer choice survey data from two settings: online (n=331) and in-person at refueling stations (n=127). Light-duty vehicle owners were asked in a series of choice tasks to choose among fuels that varied in type, price, CO2 emissions, and location of origin for a hypothetical vehicle that could accept all fuels. We find that the majority of gasoline and E85 users are willing to substitute towards other fuels at today’s prices and attributes, while diesel users have a strong preference for diesel fuel. We also find that respondents are willing to pay on average $150/ton CO2 avoided from fuel consumption—more than most estimates of the social cost of carbon. Thus, communicating the climate benefits from alternative fuels may be an important strategy for decarbonizing the transportation sector.
Pooled discrete choice models combine revealed preference (RP) data and stated preference (SP) data to exploit advantages of each. SP data is often treated with suspicion because consumers may respond differently in a hypothetical survey context than they do in the marketplace. However, models built on RP data can suffer from endogeneity bias when attributes that drive consumer choices are unobserved by the modeler and correlated with observed variables. Using a synthetic data experiment, we test the performance of pooled RP–SP models in recovering the preference parameters that generated the market data under conditions that choice modelers are likely to face, including (1) when there is potential for endogeneity problems in the RP data, such as omitted variable bias, and (2) when consumer willingness to pay for attributes may differ from the survey context to the market context. We identify situations where pooling RP and SP data does and does not mitigate each data source’s respective weaknesses. We also show that the likelihood ratio test, which has been widely used to determine whether pooling is statistically justifiable, (1) can fail to identify the case where SP context preference differences and RP endogeneity bias shift the parameter estimates of both models in the same direction and magnitude and (2) is unreliable when the product attributes are fixed within a small number of choice sets, which is typical of automotive RP data. Our findings offer new insights into when pooling data sources may or may not be advisable for accurately estimating market preference parameters, including consideration of the conditions and context under which the data were generated as well as the relative balance of information between data sources.
We model consumer preferences for conventional, hybrid electric, plug-in hybrid electric (PHEV), and battery electric (BEV) vehicle technologies in China and the U.S. using data from choice-based conjoint surveys fielded in 2012–2013 in both countries. We find that with the combined bundle of attributes offered by vehicles available today, gasoline vehicles continue in both countries to be most attractive to consumers, and American respondents have significantly lower relative willingness-to-pay for BEV technology than Chinese respondents. While U.S. and Chinese subsidies are similar, favoring vehicles with larger battery packs, differences in consumer preferences lead to different outcomes. Our results suggest that with or without each country’s 2012–2013 subsidies, Chinese consumers are willing to adopt today’s BEVs and mid-range PHEVs at similar rates relative to their respective gasoline counterparts, whereas American consumers prefer low-range PHEVs despite subsidies. This implies potential for earlier BEV adoption in China, given adequate supply. While there are clear national security benefits for adoption of BEVs in China, the local and global social impact is unclear: With higher electricity generation emissions in China, a transition to BEVs may reduce oil consumption at the expense of increased air pollution and/or greenhouse gas emissions. On the other hand, demand from China could increase global incentives for electric vehicle technology development with the potential to reduce emissions in countries where electricity generation is associated with lower emissions.
Helveston, J.P., Wang, Y., Karplus, V. J., & Fuchs, E.R. (2016) "Up, Down, and Sideways: Innovation in China and the Case of Plug-in Electric Vehicles." Academy of Management Annual Meeting. Anaheim, CA. Aug. 5. [view slides]
Helveston, J.P., Liu, Y., Feit, E.M., Fuchs, E.R., Klampfl, E., & Michalek, J.J. (2014) "Will Subsidies Drive Electric Vehicle Adoption? Measuring Consumer Preferences in the U.S.and China." Academy of Management Annual Meeting. Philadelphia, PA. Aug. 5. [view slides]
Helveston, J.P., Liu, Y., Feit, E.M., Fuchs, E.R., Klampfl, E., & Michalek, J.J. (2014) "Will Subsidies Drive Electric Vehicle Adoption? Measuring Consumer Preferences in the U.S. and China." National Academies Transportation Research Board Annual Meeting. Washington, D.C. Jan. 13. [view slides]
Hatch, Jennifer & John P. Helveston (2019) “Brookline, MA: A Small Town seeking to lead in a Broader EV Charging Network.” Melting the ICE: Lessons from China and the West in the Transition from the Internal Combustion Engine to Electric Vehicles. Ed. Fox-Penner, P., Ren, Z.J., & Jermain, D.O. Harvard University Press. [pdf] [view online]
Murphree, Michael, John P. Helveston, & Daniel Breznitz. "Intellectual Property as a Production Input: Expanding Theories of Institutional Change and Profiting from Innovation."
This dissertation is a collection of three papers that assess how characteristics of China's domestic environment, including consumer preferences, national and local institutions, market characteristics, and policy, are associated with the development and adoption of plug-in electric vehicles (PEVs) in China. PEVs are at the forefront of sustainability in the global automotive industry with promising opportunities to reduce oil consumption and harmful emissions from passenger cars. The first study measures and compares consumer willingness-to-pay for different plug-in vehicle technologies in China and the United States using a conjoint survey fielded in each country. Results show that the current subsidy environments in China and the U.S. yield different outcomes; while Chinese consumers may be more willing to adopt today’s full-electric vehicles, American consumers have stronger preferences for lower-range plug-in hybrids. The second study builds upon the methods of the first. I use a simulation experiment to critique methods for pooling market sales and survey data together in discrete choice models, providing new guidelines for understanding under what conditions pooling data sources may or may not be advisable for accurately estimating true market preference parameters. Finally, the third study uses sales data, archival data, and 51 qualitative interviews to examine the diverse experimentation among independent domestic firms in China's the plug-in vehicle sector. By developing four case studies of domestic Chinese PEV automakers, I demonstrate how the configuration of national and local institutions in China can shape not just the direction of innovation in the PEV industry but also who engages in it. National institutions—specifically the formal Joint Venture (JV) and local content requirements—which have discouraged PEV innovation in multinational firms and inhibited the capabilities of Chinese JV partners to independently develop their own PEVs resulted in a protected PEV market in which independent domestic firms have dominated. This phenomenon, combined with local institutional support in the form of additional market protection and subsidies, has helped turn regional markets into protected laboratories for independent domestic firms to experiment with a variety of innovations. As these domestic firms begin to grow beyond their protected regional markets, national institutions may need to evolve to support national standardization of policies and plug-in infrastructure.
Helveston, John P. (2019) “China’s looser rules may usher in a new era for EV and AV companies,” Axios. February 1, 2019. [view online]
Hatch, Jennifer & John P. Helveston. "Will Autonomous Vehicles be Electric?" Institute for Sustainable Energy. August 8, 2018. [view online]
- Jul. 25, 2020 - Forbes, "This Is A Big Reason Electric Cars Still Aren’t Popular With Americans: Study"
- Nov. 21, 2019 - NPR Climate Cast, "Trade dispute with China could slow transition to low-carbon power"
- Nov. 15, 2019 - Xinhua news, "美能源专家呼吁美加强与中国合作以实现减排目标"
- Nov. 15, 2019 - Interview with GW Today, "Collaboration with China Is Critical to Achieving Climate Goals"
- Oct. 28, 2019 - Physics World, "US motorists prepared to pay more for fuel to lower emissions"