Measuring marketing-mix effects in the 32/64 bit video-game console market
✍ Scribed by Pradeep K. Chintagunta; Harikesh S. Nair; R. Sukumar
- Publisher
- John Wiley and Sons
- Year
- 2009
- Tongue
- English
- Weight
- 217 KB
- Volume
- 24
- Category
- Article
- ISSN
- 0883-7252
- DOI
- 10.1002/jae.1056
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✦ Synopsis
Abstract
We investigate the short‐ and long‐run effects of prices and software availability on the category‐level diffusion of 32/64‐bit video‐game consoles in the USA. We adopt an estimation framework that allows for a flexible intrinsic growth pattern for the hardware consoles, and uses instrumental variables to control for the potential endogeneity of prices. We find significant long‐term effects of prices and software availability on sales. We find that using a non‐parametric hazard specification is important: imposing parametric forms results in elasticities that are up to 30% smaller. We use these results to derive implications for marketing policies over the life cycle of the industry. Copyright © 2009 John Wiley & Sons, Ltd.