Paap, Richard; van Oest, van Oest, R.D. - Faculteit der Economische Wetenschappen, Erasmus … - 2004
We propose a new reference price framework for brand choice. In this framework, we employ a Markov-switching process with an absorbing state to model unobserved price recall of households. Reference prices result from the prices households are able to remember. Our model can be used to learn how...