IDEAS home Printed from https://ideas.repec.org/a/inm/ormksc/v6y1987i4p299-319.html
   My bibliography  Save this article

A Friction Model for Describing and Forecasting Price Changes

Author

Listed:
  • Wayne S. DeSarbo

    (Southern Methodist University)

  • Vithala R. Rao

    (Cornell University)

  • Joel H. Steckel

    (Columbia University)

  • Jerry Wind

    (University of Pennsylvania)

  • Richard Colombo

    (New York University)

Abstract

This paper presents a new friction model for describing the price changes of a product or brand over time and for forecasting both the timing and magnitude of such changes from one period to the next. After a review of the related pricing literature, we present our model and a modified controlled random search procedure for estimating its parameters. The model is applied to describe and forecast the weekly mortgage interest rates for a local bank in the Philadelphia area. Finally, limitations and several potential applications of this methodology are discussed.

Suggested Citation

  • Wayne S. DeSarbo & Vithala R. Rao & Joel H. Steckel & Jerry Wind & Richard Colombo, 1987. "A Friction Model for Describing and Forecasting Price Changes," Marketing Science, INFORMS, vol. 6(4), pages 299-319.
    • Handle: RePEc:inm:ormksc:v:6:y:1987:i:4:p:299-319
    DOI: 10.1287/mksc.6.4.299
    as

    Download full text from publisher

    File URL: http://dx.doi.org/10.1287/mksc.6.4.299
    Download Restriction: no
    File URL: https://libkey.io/10.1287/mksc.6.4.299?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    Citations

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


    Cited by:

    1. Ray, Sourav & Chen, Haipeng (Allan) & Bergen, Mark & Levy, Daniel, 2006. "Asymmetric Wholesale Pricing: Theory and Evidence," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 25(2), pages 109-201.
    2. Harlam, Bari A. & Krishna, Aradhna & Lehmann, Donald R. & Mela, Carl, 1995. "Impact of bundle type, price framing and familiarity on purchase intention for the bundle," Journal of Business Research, Elsevier, vol. 33(1), pages 57-66, May.
    3. Warwick Anderson, 2009. "Alternative event study methodology for detecting dividend signals in the context of joint dividend and earnings announcements," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 49(2), pages 247-265, June.
    4. Omori, Yasuhiro & Miyawaki, Koji, 2010. "Tobit model with covariate dependent thresholds," Computational Statistics & Data Analysis, Elsevier, vol. 54(11), pages 2736-2752, November.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:inm:ormksc:v:6:y:1987:i:4:p:299-319. See general information about how to correct material in RePEc.

    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.

    We have no bibliographic references for this item. You can help adding them by using 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 RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Chris Asher (email available below). General contact details of provider: https://edirc.repec.org/data/inforea.html .

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

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.