Hruschka, Harald (2006) Relevance of Functional Flexibility for Heterogeneous Sales Response Models: A Comparison of Parametric and Semi-Nonparametric Models. European Journal of Operational Research 174 (2), pp. 1009-1020.
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So far studies estimating sales response functions on the basis of store-specific data either consider heterogeneity or functional flexibility. That is why in this contribution a model is developed possessing both these features. It is a multilayer perceptron with store-specific coefficients which follows a hierarchical Bayesian framework. An appropriate Markov Chain Monte Carlo estimation technique is introduced capable to satisfy theoretical constraints (e.g. sign constraints
on elasticities). The empirical study refers to a data base consisting of weekly observations of sales and prices
for nine leading brands of a packaged consumer good category. The data were acquired in 81 stores over a time span of at least 61 weeks. The multilayer perceptron is compared to a strict parametric multiplicative model and turns out to be clearly superior in terms of posterior model probability. This result indicates the benefits of using a flexible model even if heterogeneity is dealt with. Estimated sales curves and elasticities demonstrate that both models differ with regard to implications on price response.
|Institutions:||Business, Economics and Information Systems > Institut für Betriebswirtschaftslehre > Lehrstuhl für Marketing (Prof. Dr. Harald Hruschka)|
|Keywords:||Sales response; Hierarchical Bayes; Multilayer perceptron; Neural networks; Marketing|
|Subjects:||300 Social sciences > 330 Economics|
|Refereed:||Yes, this version has been refereed|
|Created at the University of Regensburg:||Yes|
|Deposited On:||26 Jun 2007|
|Last Modified:||20 Jul 2011 21:06|