A Parsimonious Description of the Hendry System

Manohar U. Kalwani and Donald G. Morrison
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Manohar U. Kalwani: Massachusetts Institute of Technology
Donald G. Morrison: Columbia University

Management Science, 1977, vol. 23, issue 5, 467-477

Abstract: In this paper we will present some basic concepts of the Hendry System and derive the results claimed in the HendroDynamics Chapters [HendroDynamics: Fundamental Laws of Consumer Dynamics, Hendry Corporation, Chapter 1 (1970) and Chapter 2 (1971).] from two simple probabilistic assumptions; namely, zero order consumers and switching proportional to market share. We will develop the notion of partitioning which constitutes a major component of the Hendry System by briefly describing the procedure for identifying the partitioning structure in a given market. With this illustration we will point out various implications which can be drawn from a correctly identified market structure. All of our results are obtained without resorting to the entropy concept that has caused so much confusion in recent debates over the validity or usefulness of the Hendry Model.

Date: 1977
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