Template-type: ReDIF-Paper 1.0
Author-Name: Andrew T. Ching
Author-Workplace-Name: Rotman School of Management, University of Toronto
X-Author-Email: 
Author-Name: Tülin Erdem
Author-Workplace-Name: Stern School of Business, New York University
X-Author-Email: 
Author-Name: Michael P. Keane
Author-Workplace-Name: Nuffield College and Department of Economics, University of Oxford
Author-Email: michael.keane@nuffield.ox.ac.uk
Title: Learning Models: An Assessment of Progress, Challenges and New Developments
Abstract: Learning models extend the traditional discrete choice framework by postulating 
that consumers have incomplete information about product attributes, and that they learn 
about these attributes over time. In this survey we describe the literature on learning 
models that has developed over the past 20 years, using the model of Erdem and Keane (1996) 
as a unifying framework. We described how subsequent work has extended their modeling framework, 
and applied learning models to a wide range of different products and markets. We argue that 
learning models have contributed greatly to our understanding of consumer behavior, in particular 
in enhancing our understanding of brand loyalty and long run advertising effects. We also discuss 
the limitations of existing learning models and discuss potential extensions. One key challenge 
is to disentangle learning as a source of dynamics from other key mechanisms that may generate 
choice dynamics (inventories, habit persistence, etc.). Another is to enhance identification of 
learning models by collecting and utilizing direct measures of signals, perceptions and expectations.
X-Classification-JEL: 
Keywords: Learning Models, Choice modeling, Dynamic Programming, Structural models, Brand equity
Length: 53 pages
Creation-Date: 2013-06-13
Number: 2013-W07
File-URL: http://www.nuffield.ox.ac.uk/economics/papers/2013/learning_mkt_sci_new_June_16_2013.pdf
File-Format: application/pdf
Handle: RePEc:nuf:econwp:1307