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Relevance of Functional Flexibility for Heterogeneous Sales Response Models: A Comparison of Parametric and Semi-Nonparametric Models
Article
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.DOI to cite this document: 10.5283/epub.2092
Abstract
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 ...
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.
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| Item type | Article |
| Journal or Publication Title | European Journal of Operational Research |
| Volume | 174 |
| Number of Issue or Book Chapter | 2 |
| Page Range | pp. 1009-1020 |
| Date | October 2006 |
| Date of publication | 05 Aug 2009 13:36 |
| 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 |
| Dewey Decimal Classification | 300 Social sciences > 330 Economics |
| Status | Published |
| Refereed | Yes, this version has been refereed |
| Created at the University of Regensburg | Yes |
| Item ID | 2092 |
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