Reward programs, a promotional tool to develop customer loyalty, offer incentives to consumers on the basis of cumulative purchases of a given product or service from a firm. Reward programs have become increasingly common in many industries. The best-known examples include frequent-flier...

We offer a framework to specify and estimate various sources of heterogeneity in multinomial logit brand choice models. We let each brand-specific intercept and each parameter of the explanatory variable vector vary randomly across households. In addition, we distinguish loyal households from...

We examine the basic premise that consumers may anticipate future promotions and adjust their purchase behavior accordingly. We develop a structural model of households who make purchase decisions to minimize their expenditure over a finite period. The model allows for future expectations of...

Direct marketing is witnessing explosive growth. As consumers increasingly purchase products from their homes, their ability to judge the quality of products they buy is significantly reduced. In this paper we study how money-back guarantees can signal product quality in such environments. We...

We offer an econometric framework that models consumer's consideration set formation as an outcome of her costly information search behavior. Because frequently purchased products are characterized by frequent price promotions of varying depths of discounts, a consumer faces significant...

Clickstream data provide information about the sequence of pages or the path viewed by users as they navigate a website. We show how path information can be categorized and modeled using a dynamic multinomial probit model of Web browsing. We estimate this model using data from a major online...