Bayesian Statistics and Marketing

57 Pages Posted: 17 Sep 2002  

Greg M. Allenby

Ohio State University (OSU) - Department of Marketing and Logistics

Peter E. Rossi

University of California, Los Angeles (UCLA) - Anderson School of Management

Date Written: July 2002

Abstract

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

Allenby, Greg M. and Rossi , Peter E., Bayesian Statistics and Marketing (July 2002). Available at SSRN: https://ssrn.com/abstract=320740 or http://dx.doi.org/10.2139/ssrn.320740

Greg M. Allenby

Ohio State University (OSU) - Department of Marketing and Logistics ( email )

Fisher Hall 524
2100 Neil Ave
Columbus, OH 43210
United States

Peter E. Rossi (Contact Author)

University of California, Los Angeles (UCLA) - Anderson School of Management ( email )

110 Westwood Plaza
Los Angeles, CA 90095-1481
United States
773-294-8616 (Phone)

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