Intertemporal aggregation of heterogeneous consumers

Moshe Givon*, Dan Horsky

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

1 Scopus citations

Abstract

This paper deals with a relatively unexamined facet of stochastic brand switching models - their connection to market share models. We 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.

Original languageEnglish
Pages (from-to)273-282
Number of pages10
JournalEuropean Journal of Operational Research
Volume76
Issue number2
DOIs
StatePublished - 28 Jul 1994

Keywords

  • Disturbed lags
  • Intertemporal aggregation
  • Markov processes

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