TITLE

Estimating Heterogeneous Price Thresholds

PUB. DATE
July 2006
SOURCE
Marketing Science;Jul/Aug2006, Vol. 25 Issue 4, p384
SOURCE TYPE
Academic Journal
DOC. TYPE
Article
ABSTRACT
A brand choice model with heterogeneous price-threshold parameters is used to investigate a three-regime piecewise-linear stochastic utility function. The model is used to explore the relationships between aspects of consumer price sensitivity and price thresholds using hierarchical Bayes modeling with the Markov chain Monte Carlo (MCMC) method. This study contributes to the modeling literature on discontinuous likelihoods in choice models. The empirical application using our scanner panel data set shows that the reference effect and loss aversion are more marked after price thresholds are taken into heterogeneous price response models. Furthermore, loss aversion is attenuated by using price thresholds than by an aggregate (homogeneity) model without price thresholds.
ACCESSION #
22304067

 

Related Articles

  • A COMPOSITE HETEROGENEOUS MODEL FOR BRAND CHOICE BEHAVIOR. Jones, J. Morgan // Management Science;Jan1973, Vol. 19 Issue 5, p499 

    This paper proposes a new, more general model of consumer brand choice behavior. The model is a composite of the Bernoulli, Markov, and Linear Learning Models, all of which have previously been proposed to represent brand choice behavior. The properties of the model are explored, and a parameter...

  • Markovian Application to Brand Switching Behaviour: A Survey of Toothpaste. Umoh, Godwin I.; Awa, Hart O.; Ebitu, Prince T. // European Journal of Business & Management;2013, Vol. 5 Issue 22, p110 

    Every industry and economy is idiosyncratic especially in terms of what drives consumer loyalty and so, extrapolating knowledge may not always provide the right basis for competitive advantage. This paper borrows transition matrix as a forecasting instrument for determining the market...

  • A BAYESIAN TECHNIQUE TO DISCRIMINATE BETWEEN STOCHASTIC MODELS OF BRAND CHOICE. Blattberg, Robert C.; Sen, Subrata K. // Management Science;Feb1975, Vol. 21 Issue 6, p682 

    This paper describes a Bayesian model-discrimination procedure which determines for each consumer the stochastic model of brand choice which is best supported by his purchasing behavior. The Bayesian technique is illustrated by means of two Markov models and two Bernoulli models. We first...

  • Breaking Through the Clutter: Benefits of Advertisement Originality and Familiarity for Brand Attention and Memory. Pieters, Rik; Warlop, Luk; Wedel, Michel // Management Science;Jun2002, Vol. 48 Issue 6, p765 

    We use a stochastic model of the influence that ad originality and familiarity have on consumers' eye fixations to the key elements of advertisements--brand, text, and pictorial--and how the information extracted during eye fixations promotes memory for the advertised brand. The model explicitly...

  • Observed and Unobserved Preference Heterogeneity in Brand-Choice Models.  // Marketing Science;Jul/Aug2006, Vol. 25 Issue 4, p322 

    This paper extends the scanner-based choice literature by explicitly incorporating individual-level brand-preference data. We illustrate our model using a unique data set that combines survey and scanner data collected from the same individuals. The addition of individual-specific...

  • AN EXPLORATORY STUDY OF BRAND LOYALTY DEVELOPMENT. Moschis, Goerge P.; Moore, Roy L.; Stanley, Thomas J. // Advances in Consumer Research;1984, Vol. 11 Issue 1, p412 

    While considerable evidence suggests that brand loyalty patterns are acquired during the pre-adult years, little is known about factors that influence brand loyalty development. This article develops and empirically tests a model of brand loyalty formation, using the cognitive developmental and...

  • A NONPARAMETRIC DENSITY ESTIMATION METHOD FOR BRAND CHOICE USING SCANNER DATA. Abe, Makoto // Marketing Science;1995 Part 1 of 2, Vol. 14 Issue 3, p300 

    Nonparametric density estimation using a kernel method is proposed to model consumer brand choice. Recent availability of large scanner panel data allows the use of nonparametric approach, which has few or at least fewer underlying assumptions and affords greater structural flexibility. By...

  • Consumer personality and other factors in situational brand choice variation. Orth, Ulrich R. // Journal of Brand Management;Nov2005, Vol. 13 Issue 2, p115 

    This paper examines drivers of intrapersonal variation in individual brand choke across consumption situations. Based on a consumer sample, it was established that individual choke of wine brands varied across three situations, depending on whether the wine was chosen for self-consumption,...

  • Integrating the Dirichlet-Multinomial and Multinomial Logit Models of Brand Choice. Fader, Peter S. // Marketing Letters;Apr93, Vol. 4 Issue 2, p99 

    This paper discusses the interpretative benefits that arise from merging the Dirichlet-multinomial (DM) model as a loyalty variable in the multinomial logit (MNL) model of brand choice. The estimated parameters of this hybrid model compare favorably to those of a "pure" DM model (with no...

Share

Read the Article

Courtesy of VIRGINIA BEACH PUBLIC LIBRARY AND SYSTEM

Sign out of this library

Other Topics