Work

A Friction Model for Describing and Forecasting Price Changes

Year: 1987

Type: article

Abstract: This paper presents a new friction model for describing the price changes of a product or brand over time and for forecasting both the timing and magnitude of such changes from one period to the next. After a review of the related pricing literature, we present our model and a modified controlled random search procedure for estimating its parameters. The model is applied to describe and forecast the weekly mortgage interest rates for a local bank in the Philadelphia area. Finally, limitations and several potential applications of this methodology are discussed.

Source: Marketing Science

DOI: 10.1287/mksc.6.4.299

Authors: Wayne S. DeSarbo, Vithala R. Rao, Joel H. Steckel, Jerry Wind, Richard Colombo

Institutions: Southern Methodist University, Cornell University, Columbia University, University of Pennsylvania, New York University

Language: English

Topic: Forecasting Techniques and Applications

Subfield: Management Science and Operations Research

Field: Decision Sciences

Domain: Social Sciences

Open Access status: green

OpenAlex ID: W2164755628

FWCI: 1.813

Cites: 36

Cited by: 33

Related to: 10