Stochastic models of industrial buying behaviour

G Easton

Omega, 1980, vol. 8, issue 1, 63-69

Abstract: This paper presents one of the first attempts to develop stochastic models of industrial buying behaviour. The Beta-binomial model, used to model consumer purchase incidence, also works well for industrial consumers. Purchase size is shown to be lognormally distributed suggesting that something like a log random walk process may be operating. However it proved impossible to combine these two stochastic models analytically and a less rich model, the Markov reservoir, was shown to fit the data providing useful insights into the dynamics of industrial markets as well as suggesting areas for further research.

Date: 1980
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