Simultaneous Equations and Segmentation in Marketing Strategy

Reflection – Chapters 8 and 9
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Reflection – Chapters 8 and 9
Chapter 8
Simultaneous equations are a representation of an association depicting a phenomenon. These equations involve a combination of relationships explaining the behavior of some variables. The two types of variables include exogenous (predetermined) and endogenous (jointly determined). I have learned that endogenous variables are described by the functioning of values and systems defined by relations simultaneous interaction within the model. On the other hand, exogenous variables explain endogenous values and variables determined from the model’s outside. Notably, it is worth it to get to the trouble of applying simultaneous equations in marketing analytics to identify problems within any economic model. For example, simultaneous equations are used for optimal pricing as well as comprehending cannibalization between brands, products, etc. More important to note are the estimators’ desirable properties, including unbiasedness, consistency, and efficiency. ...