Comment on "A Comment on a Market Share
Theorem"
ARNOLD I. BARNETT*
Having read Chatfield's comments on the market
share theorem, one cannot avoid the sense that he
is displeased with the result. One suspects trouble
is brewing when a distinction is made between "good
theory" and "bad theory" and, when one reaches
the section "Is the Theorem Useful?", one knows
Chatfield is not about to open the floor to debate.
Ironically, the main effect of his remarks might be
to advertise the theorem he apparently deplores; thus
his comments might after all be worthwhile.
Animating Chatfield's essay is the notion that at-
tractiveness of products is a concept fabricated by
the authors he cites to provide a basis for a theorem.
(Weak disclaimers on this point are unconvincing.)
But the BKL paper cites at least nine previous studies
that used the attractiveness concept although not the
actual word. The procedures in these studies typically
involved (1) conjecturing a set of attractiveness mea-
sures for all competitors in a market and (2) conjectur-
ing that the market share of a competitor equals the
ratio of his own attractiveness rating to the sum of
ratings for all sellers. BKL attempted to strengthen
the scientific underpinnings of this procedure already
in use. They concentrated on the second part of the
process, and posed several questions to the model
builder about the relationship he thinks exists between
attractiveness ratings and market shares. If the ques-
tions are answered in a certain way, the BKL theorem
informs him that a linear-normalized (us/ "us +
them") model of market shares is not mere conjecture
but a logical necessity.
My own work likewise focused on the second part
of the modeling procedure. It posed the question:
Given that an attractiveness vector has been proposed,
*Arnold I. Barnett is Assistant Professor of Operations Research
and Management, Massachusetts Institute of Technology.
312
why should one approximate market share by us/(us
+them) as opposed, for example, to us 2 /us 2 +them 3 ?
(By "themn" I mean the sum of the nth powers of
attractiveness numbers for other sellers.) The paper
encouraged the model builder to assess the relative
impacts on his product's market share of a fixed change
in attractiveness for several different competitors; it
then indicated-in many circumstances-the market-
share distribution corresponding to his assessments.
The paper was not intended to offer new ways to
construct attractiveness functions. (The BKL refer-
ence list suggests that, contrary to Chatfield's warn-
ings, this should not cause paralysis among model
builders.) But the work might improve the logical
structure of market-share calculations once attractive-
ness ratings are at hand.
Two particular points in Chatfield's essay deserve
attention. He suggests that my results could actually
be harmful to the approximation of market shares,
apparently because he fears that the large number
of arbitrary constants the model allows could permit
shallow attractiveness functions-with no predictive
value-to fit current data. I do not see how-beyond
writing clearly-an author can be expected to act upon
the possibility that someone, somewhere, will misun-
derstand or misuse his work. Regression is widely
misused; would Chatfield argue for suppressing that?
(Or is regression also a "bad theory"?)
Last, Chatfield writes, with reference to an aspect
of the BKL paper, "If one is going to write mathemat-
ics one should ensure that it is correct." This remark
is wholly inappropriate. Though one axiom in the BKL
model is stronger than absolutely necessary, this in
no way reduces. the correctness of their analysis. And
their statement that the property equal-attractiveness-
implies-equal-market-share "does have some sub-
stance" is surely not wrong, for all linear-normalized
models of market share have this property. If one
is going to write criticism, I would think, one should
ensure that it is fair.
Journal of Marketing Research
Vol. XIII (August 1976), 312