nep-mkt New Economics Papers
on Marketing
Issue of 2006‒01‒29
seven papers chosen by
Joao Carlos Correia Leitao
Universidade da Beira Interior

  1. The Role of Advertising in Commercial Banking By Örs, Evren
  2. Does a Platform Owning Monopolist Want Competition? By Andras Niedermayer
  3. Consumers' immediate memory for prices By VANHUELE, Marc; LAURENT, Gilles; DREZE, Xavier
  4. Paths to positivity: exploring the dynamics of positive organizing By Cunha, Miguel Pina e; Cunha, Rita Campos e; Rego, Arménio
  5. Mixing Media with Two-Part Tariffs By Hoernig, Steffen; Valletti, Tommaso
  6. Bricolage in organizations By Cunha, Miguel Pina e
  7. Does it pay to be socially responsible? Evidence from Spanish retail banking sector By Callado-Muñoz, Francisco J; Utrero-González, Natalia

  1. By: Örs, Evren
    Abstract: I use a new Call Reports data item to revisit the role of advertising in US commercial banking. I examine how banks' advertising varies with the deposit market structure and whether bank profitability is influenced by advertising. My analysis addresses the endogeneity of market structure and advertising variables using instrumental variables. I find that banks advertise more with increasing market concentration, whereas banks with larger market shares and size advertise less. I also find that advertising has a positive and economically significant impact on bank profitability. These results suggest that advertising is an important aspect of bank competition.
    Keywords: depository institutions; market structure; non-price competition
    JEL: D40 G21 M37
    Date: 2006–01
  2. By: Andras Niedermayer
    Abstract: We consider a software vendor selling both a monopoly platform (e.g. operating system) and an application that runs on this platform. He may face competition by an entrant in the applications market. Consumers are heterogeneous in their preferences for both the platform and the applications. They first buy the platform and then the applications. Their utility over the horizontally differentiated applications is known only after they bought the platform. In equilibrium the platform seller can be better off with a competitor in the applications market for three reasons. First, the platform vendor makes more profits with his platform. Second, the competitor’s entry serves as a credible commitment to lower prices for applications. Third, higher ex ante expectations of product diversity lead to a higher demand for his application. Competition may be profit enhancing even if the first two effects are absent, i.e. the product diversity effect can be sufficient. The model also gives an answer to the much debated question why Microsoft prices MS Office significantly higher than its operating system.
    Keywords: Two-sided markets; platforms; entry; complementary goods; price commitment; product diversity; Microsoft
    JEL: D41 D43 L13 L86
    Date: 2005–12
  3. By: VANHUELE, Marc; LAURENT, Gilles; DREZE, Xavier
    Abstract: In this article, the authors examine the cognitive mechanics involved in keeping prices in short-terme memory for subsequent recall. Consumers code and store prices verbally, visually, and in terms of their magnitude. The encoding used influences immediate recall performance. The memorability of prices depends on their verbal length, usualness and overall magnitude. They find that the performance of consumers recall prices better than what previous digit span studies with simple numbers have suggested.
    Keywords: consumer behavior; numerical cognition; price memory
    JEL: D10
    Date: 2005–01–01
  4. By: Cunha, Miguel Pina e; Cunha, Rita Campos e; Rego, Arménio
    Abstract: This paper advances a theory about the way patterns of positive and negative organizing unfold. It is grounded in data collected from 58 individuals. We followed an inductive logic and used critical incidents to collect information on positive and negative processes and outcomes. From this we extracted six dimensions, which are present in different combinations in the 116 incidents narrated by the participants: recognition/ indifference, communication/silence, interaction/separation, confidence/distrust, loyalty/betrayal, and organizational transparency/organizational secrecy. We then analyzed how these dimensions fit together and discovered that they could be organized around four major patterns combining the clarity/opacity of organizational rules and the considerate/ detached behavior of leaders. We assert that positive leaders are essential in the creation of positive organizations, regardless of the features of the external context.
    Keywords: positive organizing; organizational energy; leadership
    Date: 2005
  5. By: Hoernig, Steffen; Valletti, Tommaso
    Abstract: We consider a media market where consumers mix content offered by different firms and firms charge two-part tariffs. As compared to pure linear pricing (pay-per-view), firms make higher profits, while consumers are worse off and the allocation is not first-best. We also consider flat subscription fees and show that they make mixing unattractive. Both two-part tariffs and pay-per-view Pareto-dominate flat fees.
    Keywords: combinable products; flat fees; pay-per-view; two-part tariffs
    JEL: L13 L82
    Date: 2006–01
  6. By: Cunha, Miguel Pina e
    Abstract: Theories of management and organization have traditionally overlooked the concept of bricolage. Focused on the rationality of resource allocation, scholars have missed the relevance of the skill of “inventing” resources from available materials. Changes in the nature of competition are, however, stressing the importance of speed and change as competitive factors in shifting environments. In these environments it may be impossible to search and wait for the presumably adequate resources. Bricolage, therefore, may be a relevant practice in these environments. This article discusses the concept of organizational bricolage by asking such questions as: What is bricolage? Why is bricolage a relevant practice? Why is bricolage so often ignored? How can it be facilitated?
    Keywords: resources; resourcing; bricolage; improvisation
    Date: 2005
  7. By: Callado-Muñoz, Francisco J; Utrero-González, Natalia
    Abstract: This paper presents a theoretical and empirical analysis of strategic competition in retail banking when some of the financial firms are non-profit organisations that invest in social activities. Banking literature about competition is fairly large, but the strategic interaction between profit maximizing and non profit maximizers has not been extensively analysed except for Purroy and Salas (1999). In this paper, a completely different approach is taken. An adaptation of Hotelling’s two stage model of spatial competition is developed to take into account consumer perceptions respect to the two different types of financial institutions. The empirical analysis confirms that consumers take into account other features different from the price, such as social contribution or closer service to make a deposit or mortgage decision. These conclusions are of interest in the debate about a firm’s social or ethical activities. It is shown that if consumers value social activities, firms can improve their results by behaving socially responsible.
    Keywords: Strategic competition; Hotelling´s model; Spanish banking; Corporate social responsibility
    JEL: D83 G21 D21
    Date: 2006–01

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