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on Marketing |
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Issue of 2005‒11‒05
three papers chosen by Joao Carlos Correia Leitao Universidade da Beira Interior |
| By: | Cesar L. Revoredo Giha (Department of Land Economy, University of Cambridge, UK); Denis A. Nadolnyak (Department of Agricultural and Applied Economics, University of Georgia, USA); Stanley M. Fletcher (Department of Agricultural and Applied Economics, University of Georgia, USA) |
| Abstract: | The elimination of the marketing quota system that regulated the peanut market since the 1930s has been accompanied by the emergence of marketing contracts between farmers and peanut buyers (mainly peanut shellers). Two types of contracts have been observed, forward contracts for delivery at harvest or at a later date and “option to purchase” contracts. We analyze the clauses of contracts used by major shellers in order to infer the motivation behind these contracts (i.e., risk sharing, reduction of transaction costs, improve coordination, exercise of market power, etc.). The analysis points out that the main role of the contracts is to replace the marketing structure existing prior the 2002 Farm Act, where peanut marketing was quite regulated. In this sense, the reduction of transaction costs associated to the need for coordinating a continuous supply of homogeneous quality seems to be the most plausible explanation. |
| Keywords: | US agriculture, agricultural marketing, peanuts, economics of agricultural contracts |
| Date: | 2005–06 |
| URL: | http://d.repec.org/n?u=RePEc:lnd:wpaper:200511&r=mkt |
| By: | Carriquiry, Miguel A.; Babcock, Bruce A. |
| Abstract: | Based on accepted advances in the marketing, economics, consumer behavior, and satisfaction literatures, we develop a micro-foundations model of a firm that needs to manage the quality of a product that is inherently heterogeneous in the presence of varying customer tastes or expectations for quality. Our model blends elements of the returns to quality, customer lifetime value, and service profit chain approaches to marketing. The model is then used to explain several empirical results pertaining to the marketing literature by explicitly articulating the trade-offs between customer satisfaction and costs (including opportunity costs) of quality. In this environment firms will find it optimal to allow some customers to go unsatisfied. We show that the relationship between the expected number of repeated purchases by an individual customer is endogenous to the choice of quality by the firm, indicating that the number of purchases cannot be chosen freely to estimate a customer’s lifetime value. |
| Keywords: | consumer satisfaction, heterogeneous customers, quality expectations, quality heterogeneity, quality management, repeated purchases |
| Date: | 2005–10–25 |
| URL: | http://d.repec.org/n?u=RePEc:isu:genres:12449&r=mkt |
| By: | David S. Evans; Albert L. Nichols; Richard Schmalensee |
| Abstract: | U.S. v. Microsoft and the related state suit filed in 1998 appear finally to have concluded. In a unanimous en banc decision issued in late June 2004, the D.C. Circuit Court of Appeals rejected challenges to the remedies approved by the District Court in November 2002. The wave of follow-on private antitrust suits filed against Microsoft also appears to be subsiding. In this paper we review the remedies imposed in the United States, in terms of both their relationship to the violations found and their impact on consumer welfare. We conclude that the remedies addressed the violations ultimately found by the Court of Appeals (which were a subset of those found by the original district court and an even smaller subset of the violations alleged, both in court and in public discourse) and went beyond them in important ways. Thus, for those who believe that the courts were right in finding that some of Microsoft's actions harmed competition, the constraints placed on its behavior and the active, ongoing oversight by the Court and the plaintiffs provide useful protection against a recurrence of such harm. For those who believe that Microsoft should not have been found liable because of insufficient evidence of harm to consumers, the remedies may be unnecessary, but they avoided the serious potential damage to consumer welfare that was likely to accompany the main alternative proposals. The remedies actually imposed appear to have struck a reasonable balance between protecting consumers against the types of actions found illegal and harming consumers by unnecessarily restricting Microsoft's ability to compete. |
| JEL: | K21 L1 L4 L6 |
| Date: | 2005–10 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:11727&r=mkt |