INTERTEMPORAL AGGREGATION OF HETEROGENEOUS CONSUMERS

This paper deals with a relatively unexamined facet of stochastic bran d switching models - their connection to market share models. We deriv e a composite market share model based on aggregation of heterogeneous Markovian type individuals each purchasing a brand from the product c lass several times during the period of analysis. The characteristics of this composite model are examined and interestingly suggest a Marko v type market share model. Moreover, this examination sheds some light on a phenomenon uncovered in econometric studies of market share resp onse to advertising - the slow decay of the lagged market share term a s the length of the measurement period is increased.