nep-mkt New Economics Papers
on Marketing
Issue of 2005‒10‒29
seven papers chosen by
Joao Carlos Correia Leitao
Universidade da Beira Interior

  1. Diffusion of Mobile Phones in China By Sangwan, S.; Pau, L-F.
  2. Discrimination as a Competitive Device: The Case of Local Television News By Caitlin Knowles Myers
  3. The Productivity impact of E-Commerce in the UK, 2001: Evidence from microdata By Ana Rincon-Aznar; Catherine (Kate) Robinson; Michela Vecchi
  4. The Effects of Consumer Protection on Sales Signs, Consumer Search and Competition By Chris M. Wilson
  5. File-Sharing, Sampling, and Music Distribution By Martin Peitz; Patrick Waelbroeck
  6. An Economist's Guide to Digital Music By Martin Peitz; Patrick Waelbroeck
  7. An Empirical Test of the Theory of Sales: Do Household Storage Costs Affect Consumer and Store Behavior? By David R. Bell; Christian A.L. Hilber

  1. By: Sangwan, S.; Pau, L-F. (Erasmus Research Institute of Management (ERIM), RSM Erasmus University)
    Abstract: Diffusion of mobile communication has induced great societal changes in China. Factors at global market, communications industry and end-user market levels are driving the adoption at a high rate. Firstly, China?s economic emergence together with e.g. accession to WTO has led to foreign investment increase in telecom and communications industry. Secondly, a parallel deregulation and reengineering of the telecom industry ensured an introduction of competition in the domestic terminals market and facilitated manufacturing in China. Finally, overall growth in China has increased purchasing power enabling consumers to adopt new technologies. At the market level, challenges and future growth depends on a favorable business environment both for local and multinationals organizations, operators and service providers, and most importantly to the distribution channels (retailers and resellers). Market mechanisms such as improvement in payment methods, regulations for content providers, branded and low-end mobile phones marketing, applications and support in Chinese language are required for a systematic and not just sporadic adoption of mobile devices. Product development and innovation, improvement in distribution infrastructure, mobile services operators skill enhancement are some measures that can growth of mobile communication and increase in average consumer spending.
    Keywords: China;Mobile phones diffusion;Market developments;China?s industrial policy;
    Date: 2005–10–14
  2. By: Caitlin Knowles Myers (Middlebury College and IZA Bonn)
    Abstract: Local news offers a unique look not only at customer preferences but also at the strategic response of firms to these preferences. This paper uses a combination of ratings data and newly gathered information on television stations in 25 U.S. markets to examine the decisions of competing firms and how customers respond to the journalists who appear onair at the different stations in a market. The results indicate that there is a negative correlation between the racial, gender, and age composition of competing firms. Moreover, the ratings data suggest that the stations with relatively few blacks on-air are catering to the more discriminatory customers. While a similar result is found for age and gender, the reverse holds for other groups, suggesting possible tastes for diversity for Hispanics and Asians. Taken as a whole, the evidence supports a theoretical model in which firms differentiate via the characteristics of their employees in response to customer prejudice.
    Keywords: economics of gender and minorities, customer discrimination, product differentiation, Nielsen ratings
    JEL: J71
    Date: 2005–10
  3. By: Ana Rincon-Aznar; Catherine (Kate) Robinson; Michela Vecchi
    Abstract: This paper considers the impact of e-commerce on establishment level productivity for all sectors of the economy, using data from the UK E-commerce survey. E-Commerce represents the operational application of technology in the production process and may be regarded as an innovation driven change in workplace practice.Using a production function approach to measuring productivity, we find that OLS estimation fails to adequately account for the selectivity bias amongst enterprises that use e-commerce. Using a treatment effect estimator, we find that both e-buying and e-selling have significant and positive impacts on productivity.
    Date: 2005–05
  4. By: Chris M. Wilson (University of East Anglia)
    Abstract: Within a one-shot, duopoly game, we show that firms cannot use false in- store price comparisons to deter rational consumers from further beneficial price search in an effort to create market power. However, by introducing a consumer protection authority that monitors price comparisons, we formalise Nelson’s (1974) conjecture by showing that ‘middle-order’ monitoring can actually facilitate the deception of fully rational consumers, to deter them from otherwise optimal search. Despite this effect, we show that no increase in monitoring can ever harm consumers due to a second, larger effect that improves consumer information and increases the intensity of price competition.
    Keywords: Comparative Price Advertising, Deception, Obfuscation, Cheap Talk
    JEL: L10 D43 D83
    Date: 2005–10–24
  5. By: Martin Peitz (International University in Germany, D-76646 Bruchsal); Patrick Waelbroeck (ECARES, Université Libre de Bruxelles, CP 114, 50 av. Roosevelt, 1050 Bruxelles, Belgium)
    Abstract: The use of file-sharing technologies, so-called Peer-to-Peer (P2P) networks, to copy music files has become common since the arrival of Napster. P2P networks may actually improve the matching between products and buyers - we call this the matching effect. For a label the downside of P2P networks is that consumers receive a copy which, although it is an imperfect substitute to the original, may reduce their willingness-to-pay for the original - we call this the competition effect. We show that the matching effect may dominate so that a label's profits are higher with P2P networks than without. Furthermore, we show that the existence of P2P networks may alter the standard business model: sampling may replace costly marketing and promotion. This may allow labels to increase profits in spite of lower revenues.
    Keywords: ?le-sharing, P2P, sampling, information transmission, piracy, music
    JEL: L11 L82
    Date: 2004–12
  6. By: Martin Peitz (International University in Germany, D-76646 Bruchsal); Patrick Waelbroeck (ECARES, Université Libre de Bruxelles, CP 114, 50 av. Roosevelt, 1050 Bruxelles, Belgium)
    Abstract: In this guide, we discuss the impact of digitalization on the music industry. We rely on market and survey data at the international level as well as expert statements from the industry. The guide investigates recent developments in legal and technological protection of digital music and describes new business models as well as consumers' attitude towards music downloads. We conclude the guide by a discussion of the evolution of the music industry.
    Keywords: Music, Internet, File-sharing, Peer-to-peer, Piracy, Digital Rights Management, Copyright, E-commerce
    Date: 2004–12
  7. By: David R. Bell; Christian A.L. Hilber
    Abstract: We revisit and test Salop and Stiglitz (1982) Theory of Sales. Equilibrium predictions are that higher consumer storage costs lead to: (1) higher average prices, (2) fewer promotions, and (3) shallower promotions. Empirical estimates of storage cost are developed for approximately 1,000 households using the American Housing Survey (1989), United States Census (1990), and Stanford Market Basket Database (19911993). A test of the key assumption finds consumers with higher storage costs shop more often and purchase smaller quantities per visit; moreover, all three equilibrium predictions are supported. The estimated quantitative effects on shopping frequency and prices are economically important.
    Keywords: Consumer Behavior, Retail Prices, Price Promotion, Storage Costs.
    JEL: D12 D40 M3
    Date: 2004–08

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