Marketing

Marketing variables that are included in consumer discrete choice models are often endogenous. Extant treatments using likelihood-based estimators impose parametric distributional assumptions, such as normality, on the source of endogeneity. These assumptions are restrictive because misspecified distributions have an impact on parameter estimates and associated elasticities. The normality assumption for endogeneity can be inconsistent with some marginal cost specifications given a price-setting process, although they are consistent with other specifications.

We propose an approach for using individual-level data on social interactions (e.g., number of recommendations received by consumers, number of recommendations given by adopters, number of social ties) to improve the aggregate penetration forecasts made by extant diffusion models. We capture social interactions through an individual-level hazard rate in such a way that the resulting aggregate penetration process is available in closed form and nests extant diffusion models.

This special section is the result of an effort by several scholars to move marketing academic research toward greater practical relevance. This initiative, called Theory Practice in Marketing (TPM), started with a conference at Columbia Business School in 2011, and the five papers published in this special section were presented at the second TPM conference held at Harvard Business School in 2012.

In late 2013, Bloomberg LP, the financial information powerhouse, was challenged by a competing messaging service owned by a consortium of banks, many of whom were Bloomberg's customers. This development came when growth was slowing and news was emerging that Bloomberg's business practices may have compromised the privacy of its customers. Did these events serve to open fissures in the company's ability to maintain industry dominance? This case asks students to consider Bloomberg's business model and the industry's competitive landscape to assess the company's market position.