Separating Dynamic Consumer, Competitor and Company Response to Marketing Actions: Exclusion Restrictions on Var-Based Impulse Response Functions

19 Pages Posted: 10 Dec 2003

See all articles by Koen H. Pauwels

Koen H. Pauwels

Ozyegin University

Paul J. Wolfson

Tuck School of Business at Dartmouth

Date Written: December 4, 2003

Abstract

Long-term marketing effectiveness is a high priority research topic for managers (Marketing Science Institute 2002), and recent research applied flexible models of dynamic market interactions to measure the net long-term performance impact of marketing actions. Unfortunately, this net long-term impact is challenging to interpret, as it emerges from the complex interplay among dynamic reactions of several market players. This paper introduces and formally compares restricted policy simulations based on structural VAR-models in order to distinguish three dynamic forces: consumer response, competitor response and company response.

Keywords: long-term marketing effectiveness, dynamic consumer, company and competitor response, structural Vector Auto Regressive (VAR) models, impulse response functions, policy simulation restrictions

JEL Classification: C32, C51,C53

Suggested Citation

Pauwels, Koen H. and Wolfson, Paul J., Separating Dynamic Consumer, Competitor and Company Response to Marketing Actions: Exclusion Restrictions on Var-Based Impulse Response Functions (December 4, 2003). Available at SSRN: https://ssrn.com/abstract=476651 or http://dx.doi.org/10.2139/ssrn.476651

Koen H. Pauwels (Contact Author)

Ozyegin University ( email )

Kusbakisi Cd. No: 2
Altunizade, Uskudar
Istanbul, 34662
Turkey

HOME PAGE: http://www.marketdashboards.com

Paul J. Wolfson

Tuck School of Business at Dartmouth ( email )

Hanover, NH 03755-9023
United States
603-643-8528 (Phone)

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