Measuring marketing-mix effects in the 32/64 bit video-game console market
Article first published online: 3 MAR 2009
Copyright © 2009 John Wiley & Sons, Ltd.
Journal of Applied Econometrics
Special Issue: New Econometric Models in Marketing
Volume 24, Issue 3, pages 421–445, April/May 2009
How to Cite
Chintagunta, P. K., Nair, H. S. and Sukumar, R. (2009), Measuring marketing-mix effects in the 32/64 bit video-game console market. J. Appl. Econ., 24: 421–445. doi: 10.1002/jae.1056
- Issue published online: 3 MAR 2009
- Article first published online: 3 MAR 2009
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.