Learning Models: An Assessment of Progress, Challenges and New Developments

Marketing Science, Forthcoming

54 Pages Posted: 17 Aug 2011 Last revised: 14 Jul 2013

See all articles by Andrew T. Ching

Andrew T. Ching

Johns Hopkins University - Carey Business School

Tulin Erdem

New York University (NYU) - Leonard N. Stern School of Business; New York University (NYU) - Department of Marketing

Michael P. Keane

Arizona State University (ASU) - Economics Department; University of Technology, Sydney (Visiting July 2006-Present)

Date Written: August 11, 2011

Abstract

Learning models extend the traditional discrete choice framework by postulating that consumers have incomplete information about product attributes, and that they learn about these attributes over time. In this survey we describe the literature on learning models that has developed over the past 20 years, using the model of Erdem and Keane (1996) as a unifying framework. We described how subsequent work has extended their modeling framework, and applied learning models to a wide range of different products and markets. We argue that learning models have contributed greatly to our understanding of consumer behavior, in particular in enhancing our understanding of brand loyalty and long run advertising effects. We also discuss the limitations of existing learning models and discuss potential extensions. One key challenge is to disentangle learning as a source of dynamics from other key mechanisms that may generate choice dynamics (inventories, habit persistence, etc.). Another is to enhance identification of learning models by collecting and utilizing direct measures of signals, perceptions and expectations.

Keywords: Learning Models, Choice Modeling, Dynamic Programming, Structural Models, Brand Equity

JEL Classification: C33, C35, C61, D83, D91, M31

Suggested Citation

Ching, Andrew T. and Erdem, Tulin and Keane, Michael P., Learning Models: An Assessment of Progress, Challenges and New Developments (August 11, 2011). Marketing Science, Forthcoming. Available at SSRN: https://ssrn.com/abstract=1910839 or http://dx.doi.org/10.2139/ssrn.1910839

Andrew T. Ching

Johns Hopkins University - Carey Business School ( email )

100 International Drive
Baltimore, MD 21202
United States

Tulin Erdem

New York University (NYU) - Leonard N. Stern School of Business ( email )

44 West 4th Street
Suite 9-160
New York, NY NY 10012
United States

New York University (NYU) - Department of Marketing ( email )

Henry Kaufman Ctr
44 W 4 St.
New York, NY
United States

Michael P. Keane (Contact Author)

Arizona State University (ASU) - Economics Department ( email )

Tempe, AZ 85287-3806
United States

University of Technology, Sydney (Visiting July 2006-Present)

PO Box 123 Broadway
NSW 2007
Australia
480-965-1053 (Phone)
480-965-0748 (Fax)

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