Econometric Analysis of the Market Share Attraction Model

Dennis Fok, Philip Hans Franses and Richard Paap

ERIM Report Series Research in Management from Erasmus Research Institute of Management (ERIM), ERIM is the joint research institute of the Rotterdam School of Management, Erasmus University and the Erasmus School of Economics (ESE) at Erasmus University Rotterdam

Abstract: Market share attraction models are useful tools for analyzing competitive structures. The models can be used to infer cross-effects of marketing-mix variables, but also the own effects can be adequately estimated while conditioning on competitive reactions. Important features of attraction models are that they incorporate that market shares sum to unity and that the market shares of individual brands are in between 0 and 1. Next to analyzing competitive structures, attraction models are also often considered for forecasting market shares. The econometric analysis of the market share attraction model has not received much attention. Topics as specification, diagnostics, estimation and forecasting have not been thoroughly discussed in the academic marketing literature. In this chapter we go through a range of these topics, and, along the lines, we indicate that there are ample opportunities to improve upon present-day practice.

Keywords: Market share attraction model; diagnostics; estimation; forecasting; model selection (search for similar items in EconPapers)
JEL-codes: C44 C52 M M31 (search for similar items in EconPapers)
Date: 2001-05-02
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Citations: View citations in EconPapers (2)

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