57 Pages Posted: 17 Sep 2002
Date Written: July 2002
Bayesian methods have become widespread in the marketing literature. We review the essence of the Bayesian approach and explain why it is particularly useful for marketing problems. While the appeal of the Bayesian approach has long been noted by researchers, recent developments in computational methods and expanded availability of detailed marketplace data has fueled the Bayesian growth in marketing. We emphasize the modularity and flexibility of modern Bayesian approaches. Finally, the usefulness of Bayesian methods in situations in which there is limited information about a large number of units or where the information comes from different sources is noted.
Keywords: Bayesian Statistics, decision theory, marketing models
JEL Classification: M3, C1
Suggested Citation: Suggested Citation