Intertemporal aggregation of heterogeneous consumers

Intertemporal aggregation of heterogeneous consumers

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Article ID: iaor199683
Country: Netherlands
Volume: 76
Issue: 2
Start Page Number: 273
End Page Number: 282
Publication Date: Jul 1994
Journal: European Journal of Operational Research
Authors: ,
Keywords: markov processes
Abstract:

This paper deals with a relatively unexamined facet of stochastic brand switching models-their connection to market share models. The authors derive a composite market share model based on aggregation of heterogeneous Markovian type individuals each purchasing a brand from the product class several times during the period of analysis. The characteristics of this composite model are examined and interestingly suggest a Markov type market share model. Moreover, this examination sheds some light on a phenomenon uncovered in econometric studies of market share response to advertising-the slow decay of the lagged market share term as the length of the measurement period is increased.

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