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Analysis of Brand Price Competition Using Measures of Brand

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Analysis of Brand Price Competition Using Measures of Brand Powered By Docstoc
					Can Your Past Purchases Predict Other
Consumers’ Choices? A Bayesian
Multinomial Probit Model with Spatial
Correlation in Preference and Response
     Discussant
     Ed Fox
     Southern Methodist University
Contributions

   Methodological – Incorporated
    interdependence in consumer preferences
    and geographic correlation in consumer
    response; heterogeneity with only a single
    observation per consumer
   Empirical – Preference and response in
    automobile purchases are spatially
    correlated; previous purchases are predictive
What I Really Liked…

   Exposition – BMPM        BPCPM        BRCPM
        BPRCPM
                           Preference   Response

       Response &
       Preference
   Efficiency in covariates – “adjusted price”
    incorporates standardized selling price
    (based on hedonic regression), rebate, dollar
    amount of APR
   Efficiency in capturing spatial similarity – W
Heterogeneity
   Choices predicted by what I do and by others – not
    necessarily social contagion but unmodeled factors
   Some “others” more than others – relative weights wij
   Causes correlated with:
       Geographic proximity
       Previous purchase
   Heterogeneity observed in:
       Brand/model preference
       Response

Geographic proximity             Response
                                                 Why?
Previous purchase                Preference
Empirical Findings – Price Elasticities

              Accord   Altima   Camry    Maxima
     Accord   -7.17    2.17     2.88     3.07
     Altima   3.31     -4.20    3.88     3.43
     Camry    1.21     1.04     -11.09   0.56
     Maxima   1.65     0.82     2.45     -17.72
Recommendations

   Report hit rates in addition to log-marginal
    density and MAD
   Justify transformations
       1 / exp d ij 
       Natural number for common attributes 1 – 7
   Demographics as an alternative for spatial
    matrix?
   Clarify when populating off-diagonals of the
                                               ~
    W matrix, (2) relationship between wij and wij

				
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posted:10/28/2012
language:English
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