Analyzing household brand switching: A stochastic model

Analyzing household brand switching: A stochastic model

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Article ID: iaor199686
Country: Netherlands
Volume: 76
Issue: 2
Start Page Number: 298
End Page Number: 308
Publication Date: Jul 1994
Journal: European Journal of Operational Research
Authors: ,
Keywords: product switching
Abstract:

In a recent study, Kahn, Morrison and Wright showed that for exponentially distributed interpurchase times (of individuals) the household choice process approaches a zero-order process as the number of individuals in the household increases, even though the purchasing behavior of each individual is first order. The authors show that their result holds for any arbitrary interpurchase-time distribution that has a density over some interval. Thus, additional support is provided for their conclusion that the empirically observed zero-order choice behavior at the household level may not convey much information about individuals’ choice behavior. The authors also derive a general formula that determines exactly the degree of dependence between two successive household purchases for any given family size and (well-behaved) interpurchase-time distribution.

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