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Strategic Implications of Market Share Attraction Models

Author

Listed:
  • Aneel Karnani

    (Graduate School of Business Administration, The University of Michigan, Ann Arbor, Michigan 48109)

Abstract

Market share attraction models, which specify that a firm's market share is equal to the ratio of its "attraction" to the total attraction for all firms, have received increasing attention in recent years. However, there has been little research investigating the practical implications of such models. This paper presents a game-theoretic analysis of such a model and deduces the strategic implications of a Nash equilibrium solution to the model. It is shown that these implications are consistent with previous empirical research in marketing and business policy.

Suggested Citation

  • Aneel Karnani, 1985. "Strategic Implications of Market Share Attraction Models," Management Science, INFORMS, vol. 31(5), pages 536-547, May.
    • Handle: RePEc:inm:ormnsc:v:31:y:1985:i:5:p:536-547
    DOI: 10.1287/mnsc.31.5.536
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    Citations

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    Cited by:

    1. Y Hayashi & M-H Hsieh & R Setiono, 2009. "Predicting consumer preference for fast-food franchises: a data mining approach," Journal of the Operational Research Society, Palgrave Macmillan;The OR Society, vol. 60(9), pages 1221-1229, September.
    2. Gérard P. Cachon & A. Gürhan Kök, 2007. "Category Management and Coordination in Retail Assortment Planning in the Presence of Basket Shopping Consumers," Management Science, INFORMS, vol. 53(6), pages 934-951, June.
    3. Woonghee Tim Huh & Hongmin Li, 2015. "Technical Note—Pricing Under the Nested Attraction Model with a Multistage Choice Structure," Operations Research, INFORMS, vol. 63(4), pages 840-850, August.
    4. Aravindakshan Ashwin & Ratchford Brian, 2011. "Solving Share Equations in Logit Models Using the LambertW Function," Review of Marketing Science, De Gruyter, vol. 9(1), pages 1-19, April.
    5. Suman Basuroy & Dung Nguyen, 1998. "Multinomial Logit Market Share Models: Equilibrium Characteristics and Strategic Implications," Management Science, INFORMS, vol. 44(10), pages 1396-1408, October.
    6. Schuur, Peter & Badur, Bertan & Sencer, Asli, 2021. "An explicit Nash equilibrium for a market share attraction game," Operations Research Perspectives, Elsevier, vol. 8(C).
    7. Qi Feng & J. George Shanthikumar & Mengying Xue, 2022. "Consumer Choice Models and Estimation: A Review and Extension," Production and Operations Management, Production and Operations Management Society, vol. 31(2), pages 847-867, February.
    8. Gadhoum, Yoser, 1999. "Potential effects of managers' entrenchment and shareholdings on competitiveness," European Journal of Operational Research, Elsevier, vol. 118(2), pages 332-349, October.
    9. Andrea Caravaggio & Lorenzo Cerboni Baiardi & Mauro Sodini, 2021. "A note on symmetry breaking in a non linear marketing model," Decisions in Economics and Finance, Springer;Associazione per la Matematica, vol. 44(2), pages 507-531, December.
    10. Souza, Gilvan C., 2004. "Product introduction decisions in a duopoly," European Journal of Operational Research, Elsevier, vol. 152(3), pages 745-757, February.
    11. Mesak, Hani I. & Calloway, James A., 1995. "A pulsing model of advertising competition: A game theoretic approach, part B -- Empirical application and findings," European Journal of Operational Research, Elsevier, vol. 86(3), pages 422-433, November.
    12. Claudio Panico & Carmelo Cennamo, 2022. "User preferences and strategic interactions in platform ecosystems," Strategic Management Journal, Wiley Blackwell, vol. 43(3), pages 507-529, March.
    13. Gérard P. Cachon & Christian Terwiesch & Yi Xu, 2008. "On the Effects of Consumer Search and Firm Entry in a Multiproduct Competitive Market," Marketing Science, INFORMS, vol. 27(3), pages 461-473, 05-06.
    14. Wilson, William W. & Yang, Seung-Ryong, 1994. "Impacts of Wheat Export Strategies on Market Shares," Agricultural Economics Reports 23387, North Dakota State University, Department of Agribusiness and Applied Economics.
    15. Awi Federgruen & Nan Yang, 2009. "Competition Under Generalized Attraction Models: Applications to Quality Competition Under Yield Uncertainty," Management Science, INFORMS, vol. 55(12), pages 2028-2043, December.
    16. Noah Gans, 2002. "Customer Loyalty and Supplier Quality Competition," Management Science, INFORMS, vol. 48(2), pages 207-221, February.
    17. Li, Yuan & Deng, Shengliang, 1999. "A methodology for competitive advantage analysis and strategy formulation: An example in a transitional economy," European Journal of Operational Research, Elsevier, vol. 118(2), pages 259-270, October.

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