Uncovering Characteristic Response Paths of a Population

38 Pages Posted: 18 Jun 2015 Last revised: 10 Jun 2020

See all articles by Yicheng Song

Yicheng Song

University of Minnesota - Twin Cities - Carlson School of Management

Nachiketa Sahoo

Boston University - Questrom School of Business

Shuba Srinivasan

Boston University - Questrom School of Business

Chrysanthos Dellarocas

Boston University, Questrom School of Business - Department of Information Systems

Date Written: January 20, 2016

Abstract

We propose an approach to uncover characteristic response paths of a population from an individual-level multivariate time series dataset. The approach is based on a model that accommodates arbitrary and mixed set of distributions for the endogenous variables, accommodates intersession intervals and variables, and reliably estimates individuals’ parameters through statistical pooling by uncovering clusters of similar individuals. We show that using such a model one can distribute response of a target variable to an exogenous impulse over all possible activity sequences leading up to it. When a few such sequences explain majority of the response, they describe the population’s characteristic response paths to the impulse.

We apply the proposed approach to a customer touchpoint dataset from a large multi-channel specialty retailer and uncover six segments with different characteristic shopping paths leading to purchase in response to a marketing communication. These uncovered paths provide insights into the behavior of and optimal over-time communication strategy for customers in different segments.

Keywords: Response Paths, Segmentation, Multivariate Time-series Model, Mixture Model, Dynamic Programming.

Suggested Citation

Song, Yicheng and Sahoo, Nachiketa and Srinivasan, Shuba and Dellarocas, Chrysanthos N., Uncovering Characteristic Response Paths of a Population (January 20, 2016). Boston University Questrom School of Business Research Paper No. 2619674, Available at SSRN: https://ssrn.com/abstract=2619674 or http://dx.doi.org/10.2139/ssrn.2619674

Yicheng Song (Contact Author)

University of Minnesota - Twin Cities - Carlson School of Management ( email )

19th Avenue South
Minneapolis, MN 55455
United States

HOME PAGE: http://people.bu.edu/ycsong/

Nachiketa Sahoo

Boston University - Questrom School of Business ( email )

595 Commonwealth Avenue
Boston, MA MA 02215
United States

HOME PAGE: http://people.bu.edu/nachi/

Shuba Srinivasan

Boston University - Questrom School of Business ( email )

595 Commonwealth Avenue
Boston, MA MA 02215
United States
6173535978 (Phone)
6173534098 (Fax)

HOME PAGE: http://smgnet.bu.edu/mgmt_new/profiles/SrinivasanShuba.html

Chrysanthos N. Dellarocas

Boston University, Questrom School of Business - Department of Information Systems ( email )

595 Commonwealth Avenue
Boston, MA 02215
United States

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