Bayesian Applications in Marketing
70 Pages Posted: 10 Mar 2009 Last revised: 19 May 2010
Date Written: March 9, 2009
We review applications of Bayesian methods to marketing problems. Key aspects of marketing applications include the discreteness of response or outcome data and relatively large numbers of cross-sectional units, each with possibly low information content. The use of informative priors including hierarchical models is essential for successful Bayesian applications in marketing. Given the importance of the prior, it is important to assure flexibility in the prior specification. Non-standard likelihoods and flexible priors make marketing a very challenging area for Bayesian applications.
Keywords: bayesian inference, marketing, econometrics
JEL Classification: C5, D1, M3
Suggested Citation: Suggested Citation