MCI-package: Multiplicative Competitive Interaction (MCI) Model
Description
The Multiplicative Competitive Interaction (MCI) Model (Nakanishi/Cooper 1974) is an econometric model for analyzing market shares and/or market areas in a market divided in $i$ submarkets (e.g. groups of persons or geographical regions) and served by $j$ suppliers (e.g. firms or locations). The explained/response variable of the model is $p_{ij}$, the market shares of $j$ in $i$, which are logically consistent (that means: 0 < $p_{ij}$ < 1, $\sum_{j=1}^n{p_{ij} = 1}$). The model is non-linear but can be transformed to be estimated by OLS (ordinary least squares) regression using the log-centering transformation. The MCI model can especially be used in retail location analysis because it is also an econometric approach to estimate the parameters of the popular Huff model for market areas (Huff 1962). The functions in this package include fitting the MCI model, the log-centering transformation of MCI datasets and other tools for data preparation.References
Cooper, L. G./Nakanishi, M. (1988): Market-Share Analysis: Evaluating competitive marketing effectiveness. Boston, Dordrecht, London : Kluwer.
Huff, D. L. (1962): Determination of Intra-Urban Retail Trade Areas. Los Angeles : University of California.
Huff, D. L./McCallum, D. (2008): Calibrating the Huff Model Using ArcGIS Business Analyst. ESRI White Paper, September 2008.
Nakanishi, M./Cooper, L. G. (1974): Parameter Estimation for a Multiplicative Competitive Interaction Model - Least Squares Approach. In: Journal of Marketing Research, 11, 3, p. 303-311.
Nakanishi, M./Cooper, L. G. (1982): Simplified Estimation Procedures for MCI Models. In: Marketing Science, 1, 3, p. 314-322.
Wieland, T. (2015): Raeumliches Einkaufsverhalten und Standortpolitik im Einzelhandel unter Beruecksichtigung von Agglomerationseffekten. Theoretische Erklaerungsansaetze, modellanalytische Zugaenge und eine empirisch-oekonometrische Marktgebietsanalyse anhand eines Fallbeispiels aus dem laendlichen Raum Ostwestfalens/Suedniedersachsens. Geographische Handelsforschung, 23. 289 pages. Mannheim : MetaGIS.