A model that addresses the problem of selecting test units for test marketing is described. The model is based on Bayesian procedures and utilizes data on the relationships between test unit sales and equilibrium market performance. An illustrative application incorporates the use of historical...

This paper presents a simplified procedure to revise prior probabilities when these probabilities are conditional on acts. "Moral hazard" in insurance is one example where such conditions arise. Here coverage granted by the insurer may influence the probability of loss. The procedure developed...