Advanced Search
MyIDEAS: Login

Bayesian Analysis of Simultaneous Demand and Supply


Author Info

  • Sha Yang


  • Yuxin Chen


  • Greg Allenby


Registered author(s):


    In models of demand and supply, consumer price sensitivity affects both the sales of a good through price, and the price that is set by producers and retailers. The relationship between the dependent variables (e.g., demand and price) and the common parameters (e.g., price sensitivity) is typically non-linear, especially when heterogeneity is present. In this paper, we develop a Bayesian method to address the computational challenge of estimating simultaneous demand and supply models that can be applied to both the analysis of household panel data and aggregated demand data. The method is developed within the context of a heterogeneous discrete choice model coupled with pricing equations derived from either specific competitive structures, or linear equations of the kind used in instrumental variable estimation, and applied to a scanner panel dataset of light beer purchases. Our analysis indicates that incorporating heterogeneity into the demand model all but eliminates the bias in the price parameter due to the endogeneity of price. The analysis also supports the use of a full information analysis. Copyright Kluwer Academic Publishers 2003

    Download Info

    If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
    File URL:
    Download Restriction: Access to full text is restricted to subscribers.

    As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.

    Bibliographic Info

    Article provided by Springer in its journal Quantitative Marketing and Economics.

    Volume (Year): 1 (2003)
    Issue (Month): 3 (September)
    Pages: 251-275

    as in new window
    Handle: RePEc:kap:qmktec:v:1:y:2003:i:3:p:251-275

    Contact details of provider:
    Web page:

    Related research

    Keywords: discrete choice model; endogeneity; heterogeneity; hierarchical Bayesian analysis;


    References listed on IDEAS
    Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
    as in new window
    1. Steven T. Berry, 1994. "Estimating Discrete-Choice Models of Product Differentiation," RAND Journal of Economics, The RAND Corporation, vol. 25(2), pages 242-262, Summer.
    2. Aviv Nevo, 1998. "Measuring Market Power in the Ready-to-Eat Cereal Industry," NBER Working Papers 6387, National Bureau of Economic Research, Inc.
    3. K. Sudhir, 2001. "Competitive Pricing Behavior in the Auto Market: A Structural Analysis," Marketing Science, INFORMS, vol. 20(1), pages 42-60, January.
    Full references (including those not matched with items on IDEAS)


    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as in new window

    Cited by:
    1. Timothy Gilbride & Sha Yang & Greg Allenby, 2005. "Modeling Simultaneity in Survey Data," Quantitative Marketing and Economics, Springer, vol. 3(4), pages 311-335, December.
    2. Sudarshan, Anant, 2013. "Deconstructing the Rosenfeld curve: Making sense of California's low electricity intensity," Energy Economics, Elsevier, vol. 39(C), pages 197-207.
    3. Jiang, Renna & Manchanda, Puneet & Rossi, Peter E., 2009. "Bayesian analysis of random coefficient logit models using aggregate data," Journal of Econometrics, Elsevier, vol. 149(2), pages 136-148, April.


    This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.


    Access and download statistics


    When requesting a correction, please mention this item's handle: RePEc:kap:qmktec:v:1:y:2003:i:3:p:251-275. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Guenther Eichhorn) or (Christopher F. Baum).

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If references are entirely missing, you can add them using this form.

    If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.