ggomnbd_PMF: GGompertz/NBD: Probability Mass Function (PMF)

In CLVTools: Tools for Customer Lifetime Value Estimation

GGompertz/NBD: Probability Mass Function (PMF)

Description

Calculate P(X(t)=x), the probability that a randomly selected customer makes exactly x transactions in the interval (0, t].

Usage

ggomnbd_nocov_PMF(r, alpha_0, b, s, beta_0, x, vT_i)

ggomnbd_staticcov_PMF(
  r,
  alpha_0,
  b,
  s,
  beta_0,
  x,
  vCovParams_trans,
  vCovParams_life,
  mCov_life,
  mCov_trans,
  vT_i
)

Arguments

r	shape parameter of the Gamma distribution of the purchase process. The smaller r, the stronger the heterogeneity of the purchase process.
alpha_0	scale parameter of the Gamma distribution of the purchase process.
b	scale parameter of the Gompertz distribution (constant across customers)
s	shape parameter of the Gamma distribution for the lifetime process The smaller s, the stronger the heterogeneity of customer lifetimes.
beta_0	scale parameter for the Gamma distribution for the lifetime process
x	The number of transactions to calculate the probability for (unsigned integer).
vT_i	Number of periods since the customer came alive.
vCovParams_trans	Vector of estimated parameters for the transaction covariates.
vCovParams_life	Vector of estimated parameters for the lifetime covariates.
mCov_life	Matrix containing the covariates data affecting the lifetime process. One column for each covariate.
mCov_trans	Matrix containing the covariates data affecting the transaction process. One column for each covariate.

Details

mCov_trans is a matrix containing the covariates data of the time-invariant covariates that affect the transaction process. Each column represents a different covariate. For every column a gamma parameter needs to added to vCovParams_trans at the respective position.

mCov_life is a matrix containing the covariates data of the time-invariant covariates that affect the lifetime process. Each column represents a different covariate. For every column a gamma parameter needs to added to vCovParams_life at the respective position.

Value

Returns a vector of probabilities.

References

Bemmaor AC, Glady N (2012). “Modeling Purchasing Behavior with Sudden “Death”: A Flexible Customer Lifetime Model” Management Science, 58(5), 1012-1021.

Adler J (2022). “Comment on “Modeling Purchasing Behavior with Sudden “Death”: A Flexible Customer Lifetime Model” Management Science 69(3):1929-1930.

The expression for the PMF was derived by Adler J (2024). (unpublished)

CLVTools documentation built on Oct. 13, 2024, 9:07 a.m.