TITLE

"ON BAYESIAN ESTIMATION OF MODEL PARAMETERS": REPLY

AUTHOR(S)
Lenk, Peter J.; Rao, Ambar G.
PUB. DATE
January 1990
SOURCE
Marketing Science;Winter90, Vol. 9 Issue 1, p56
SOURCE TYPE
Academic Journal
DOC. TYPE
Article
ABSTRACT
This article presents a reply by the authors in response to comments made by researcher Wilfried R. Vanhonacker on their article "On Bayesian Estimation of Model Parameters." The authors wish to clarify minor points of misunderstanding. They state that Hierarchical Bayes (HB) models do not require exchangeability. They state that HB models can incorporate known predictor variables. The authors opinionate that Vanhonacker's criticism of HB models because of the mistaken notion that only exchangeable models are allowed is misleading. They endorse Vanhonacker's position that correctly including predictor variables would improve the performance of the model. HB is a powerful model and has proven to be useful in many applications. They state that the major point is that sophisticated estimation and forecasting techniques cannot overcome the inadequacies of an incorrectly specified model and this model will often produce negative forecasts for sales because the coefficient of the squared, cumulative sales is negative and will eventually dominate the cumulative sales.
ACCESSION #
4479145

 

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