Stochastic Modeling of Consumer Purchase Behavior: I. Analytical Results

39 Pages Posted: 24 Feb 2016

Date Written: July 1981

Abstract

This paper develops alternative brand purchase models. These models are based on distinct assumptions about the product class purchasing process over a fixed time-period. In each case, the brand choice process conditioned on a product purchase being made is assumed to be heterogeneous zero order. New analytical closed-form results are derived. These results include various market statistics such as the brand penetration, the mean and variance of the brand purchase distribution and the aggregate brand purchase distribution itself. These theoretical expressions are based on the assumption of independence between brand choice probability and mean product purchase rate across the population.

Suggested Citation

Bemmaor, Albert C., Stochastic Modeling of Consumer Purchase Behavior: I. Analytical Results (July 1981). Available at SSRN: https://ssrn.com/abstract=2736894 or http://dx.doi.org/10.2139/ssrn.2736894

Albert C. Bemmaor (Contact Author)

ESSEC Business School ( email )

3 Avenue Bernard Hirsch
CS 50105 CERGY
CERGY, CERGY PONTOISE CEDEX 95021
France

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