Modeling Online Browsing and Path Analysis Using Clickstream Data
Marketing Science
Optimal Data Interval for Estimating Advertising Response
Marketing Science
Price Competition in Markets with Consumer Variety Seeking
Marketing Science
Periodic Advertising Pulsing in a Competitive Market
Marketing Science
Ushering Buyers into Electronic Channels: An Empirical Analysis
Information Systems Research
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We propose a utility-theoretic brand-choice model that accounts for four different sources of state dependence: 1. effects of lagged choices ( structural state dependence), 2. effects of serially correlated error terms in the random utility function ( habit persistence type 1), 3. effects of serial correlations between utility-maximizing alternatives on successive purchase occasions of a household ( habit persistence type 2), and 4. effects of lagged marketing variables ( carryover effects). Our proposed model also allows habit persistence to be a function of lagged marketing variables, while accommodating the effects of unobserved heterogeneity in household choice parameters. This model is more flexible than existing state-dependence models in marketing and labor econometrics. Using scanner panel data, we find structural state dependence to be the most important source of state dependence. Marketing-mix elasticities are systematically understated if state-dependence effects are incompletely accounted for. The Seetharaman and Chintagunta (1998) model is shown to recover spurious variety-seeking effects while overstating habit-persistence effects. Ignoring habit persistence type 1 leads to an underestimation, while ignoring habit persistence type 2 leads to an overestimation of structural state-dependence effects. We find lagged promotions to have carryover effects on habit persistence. Ignoring one or more sources of state dependence underestimates the total incremental impact of a sales promotion. We draw implications for manufacturer pricing.