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on Marketing |
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Issue of 2008‒10‒28
eight papers chosen by Joao Carlos Correia Leitao Technical University of Lisbon |
| By: | Rachel Griffith; Ephraim Leibtag; Andrew Leicester; Aviv Nevo |
| Abstract: | A common approach to measuring price changes is to look at the change of the expenditure needed to purchase a fixed basket of goods. It is well-known that this approach suffers from problems and creates several biases in the measurement of price changes faced by consumers. Substitution and outlet bias, two commonly studied concerns, are both driven by consumer choices of what and where to buy. However, consumers also make other choices, including how much and when to buy. We discuss the implications of consumers' timing and quantity decisions have on standard practices of computing of computing a price index. <br><br>We use household-level data on quantities purchased and prices paid to construct a measure of the savings made by consumers' optimizing behaviour in the purchase of food. In particular, we compare the prices actually paid by the consumers to various alternatives that do not allow for substitution. Our analysis suggests that the average consumer makes significant, and comparable in magnitude, savings from the four dimensions of choice that we study. Furthermore, our data suggests significant heterogeneity in consumer behavior, and that this behavior is correlated with demographics. Our findings suggest that ignoring timing and quantity decisions, when computing a price index, can generate biases on the order of magnitude of substitution and outlet biases. |
| JEL: | D12 E31 L11 L16 |
| Date: | 2008–10 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:14433&r=mkt |
| By: | Tae H. Oum; Xiaowen Fu |
| Abstract: | This paper examines revenue structure, regulation, and market power of airports, and how they affect airport’s services to airlines and influence the form of vertical relationship between airport and airlines, and thus, eventually on competition in airline markets. In addition, we also examine the competitive consequences of common ownership, coordination or alliance among multiple airports in a region. The key findings are: Concession revenues are of increasing importance to airports. The positive externality of air traffic on the demand for non-aeronautical services, along with competition among both airlines and airports, induces a vertical cooperation between airports and the dominant carrier at the airport. Airports have substantial market power due to the low price elasticity of their aeronautical services. However, such airports’ market power is moderated by competition in both the airline and airport markets. There are benefits for both airports and airlines from entering into long term relationships. |
| Date: | 2008–09 |
| URL: | http://d.repec.org/n?u=RePEc:oec:itfaaa:2008/17-en&r=mkt |
| By: | Hammond, Jerome W. |
| Keywords: | Livestock Production/Industries, Marketing, |
| Date: | 2008–01–14 |
| URL: | http://d.repec.org/n?u=RePEc:ags:umaees:7567&r=mkt |
| By: | Yi Zhu (Marshall School of Business, University of Southern California); Kenneth C. Wilbur (Marshall School of Business, University of Southern California) |
| Abstract: | Websites increasingly allow advertisers to choose whether to bid for advertising on a per-impression or per-click basis. We present the first analysis of this new hybrid auction market. The conventional wisdom in this industry is that brand advertisers (e.g., Coca-Cola) will bid for impressions, while direct response advertisers (e.g., Amazon.com) will bid for clicks. We find that in an auction setting similar to that used by Facebook and Google, brand advertisers may have an incentive to bid for clicks, while simultaneously lowering their click through rates. We suggest a variant on the current hybrid auction used in practice to incent brand advertisers to bid for impressions, which leaves the seller of online advertising weakly better off. |
| Keywords: | Advertising, Auctions, Internet Marketing, Search Advertising |
| Date: | 2008–10 |
| URL: | http://d.repec.org/n?u=RePEc:net:wpaper:0825&r=mkt |
| By: | Paul Duguid; Teresa da Silva Lopes; John Mercer |
| Abstract: | This paper looks at trademarks and brands, beyond the conventional interests of marketing and law, as a way to explaining the evolution of international business and economies in general. It shows that the perspective defended by many scholars such as Chandler (1990), Wilkins (1991, 1994) and Koehn’ (2001), about the Anglo-Saxon countries, and in particular the United States, leading the transition to modern trade-marks is narrow in its focus. Instead of the United States standing out as historically on the leading edge of innovation in the law and practice of trade marking, it appears from several directions to have been on the trailing edge. France and Britain have a more enduring interest in trademarking. The paper also looks at one particular subset of trade mark registration data – non durable consumer goods. These, and in particular food, are the dominant sectors in the three countries in terms of trademarking, reflecting the character of the sectors where imagery associated with the products is so central in competition. The paper relies on original data from three countries, France, the United Kingdom and the United States, in particular trade mark registrations, and the analysis spans for a period of one hundred years period 1870-1970. |
| Keywords: | trade marks, brands, international business history, intellectual property rights, trademark law |
| JEL: | F14 F31 |
| Date: | 2008–09 |
| URL: | http://d.repec.org/n?u=RePEc:cgs:wpaper:21&r=mkt |
| By: | Wilko Bolt; Kimmo Soramäki |
| Abstract: | We develop a model of two-sided markets that illustrates the role of bargaining power between the two sides of the market. We are interested in the profit maximizing usage fees set by identical duopolistic platforms which engage in homogeneous, Bertrand-type competition. We find that for a sufficiently low marginal cost duopolistic two-sided competition reduces to a grab-the-dollar game with two asymmetric (pure) Nash equilibria. These equilibria are characterized by highly skewed prices, in which the side with all the bargaining power pays a minimum price. The other side of the market is used for cross-subsidization and is charged a high price. Compared to the monopoly outcome, competition lowers the total price charged to both sides, although the seller's equilibrium price may exceed the monopoly price. Both platforms enjoy excess profits.Key Words: platform competition, bargaining power, asymmetric equilibria, skewed pricing |
| Keywords: | platform competition; bargaining power; asymmetric equilibria; skewed pricing |
| JEL: | E24 E52 J50 |
| Date: | 2008–09 |
| URL: | http://d.repec.org/n?u=RePEc:dnb:dnbwpp:181&r=mkt |
| By: | Egertson, Kenneth E. |
| Keywords: | Livestock Production/Industries, Marketing, |
| Date: | 2008–01–14 |
| URL: | http://d.repec.org/n?u=RePEc:ags:umeira:7556&r=mkt |
| By: | Nicolás Figueroa; Ronald Fischer; Sebastian Infante |
| Abstract: | We analyze a market where two firms producing a homogenous good compete by means of two mechanisms: prices and a loyalty bonus. We assume that firms act simultaneously when posting their loyalty bonus and prices. Consumers who purchase from a firmin the first period must return the bonus in case they switch providers in the second period. They fully anticipate the effects on future prices of accepting the bonus and maximize their total surplus over both periods. We first show that there is no equilibrium with prices and bonuses equal to zero. We then show the existence of a SPNE where firms are able to obtain half the monopoly profits using large bonuses in the first period and high prices in the second period. We completely characterize all the symmetric equilibria of the game and show that, in general, firms obtain positive profits even when they compete in prices, the good is homogenous, and consumers are forward-looking. Finally we show that if firms are allowed to discriminate between old and new customers, the standard zero price equilibria reappear. JEL Classification: L13. |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:edj:ceauch:249&r=mkt |