nep-mkt New Economics Papers
on Marketing
Issue of 2006‒07‒15
eight papers chosen by
Joao Carlos Correia Leitao
Universidade da Beira Interior

  1. Two-Sided Markets with Pecuniary and Participation Externalities By Richard Schmidtke
  2. Analysing Website Choice and Consumer Loyalty: the Case of Book and CD Markets By Asmaa Khariji
  3. Collective Marketing Arrangements for Geographically Differentiated Agricultural Products: Welfare Impacts and Policy Implications By Sergio H. Lence; Stephan Marette; Dermot J. Hayes; William E. Foster
  4. Umbrella Branding and the Provision of Quality By Hendrik Hakenes; Martin Peitz
  5. Examining the segment retention problem for the “Group Satellite” case By Ana Oliveira-Brochado; F. Vitorino Martins
  6. Innovation strategies for SMEs and clusters: the challenges of a globalised Europe By Massimo FLORIO; Emanuele OZZIMO
  7. Factoring affecting the Demand for Health Insurance in a Micro Insurance Scheme By Bhat Ramesh; Jain Nishant
  8. E-consumers' search and emerging structure of B-to-C coalitions By Jacques Laye

  1. By: Richard Schmidtke (Department of Economics, University of Munich, Akademiestr. 1/III, 80799 Munich, Germany, Tel.: +49-89-2180 3957, Fax.: +49-89-2180 2767,
    Abstract: The existing literature on "two-sided markets" addresses participation externalities, but so far it has neglected pecuniary externalities between competing platforms. In this paper we build a model that incorporates both externalities. In our setup differentiated platforms compete in advertising and offer consumers a service free of charge (such as a TV program) that is financed through advertising. We show that advertising can exhibit the properties of a strategic substitute or complement. Surprisingly, there exist cases in which platforms benefit from market entry. Moreover, we show that from a welfare point of view perfect competition is not always desirable.
    Keywords: two-sided markets, broadcasting, advertising, market entry, digital television.
    JEL: D43 L13 L82
    Date: 2006–06
  2. By: Asmaa Khariji (Economics Department CEPN University of Paris-Nord)
    Keywords: discrete choice, online behavior, consumer loyalty
    JEL: C81 D12 L81
    Date: 2006–07–04
  3. By: Sergio H. Lence; Stephan Marette (Center for Agricultural and Rural Development (CARD); Food and Agricultural Policy Research Institute (FAPRI)); Dermot J. Hayes (Center for Agricultural and Rural Development (CARD)); William E. Foster
    Abstract: This paper examines the incentive of atomistic agricultural producers within a specific geographical region to differentiate and collectively market products. We develop a model that allows us to analyze the market and welfare effects of the main types of real-world producer organizations, using it to derive economic insights regarding the circumstances under which these organizations will evolve, and describing implications of the results obtained in the context of an ongoing debate between the European Union and United States. As the anticipated fixed costs of development and marketing increase and the anticipated size of the market falls, it becomes essential to increase the ability of the producer organization to control supply in order to ensure the coverage of fixed costs. Whenever a collective organization allows a market (with a new product) to exist that otherwise would not have existed there is an increase in societal welfare. Counterintuitively, stronger property right protection for producer organizations may be welfare enhancing even after a differentiated product has been developed. The reason for this somewhat paradoxical result is that legislation aimed at curtailing the market power of producer organizations may induce large technological distortions.
    Keywords: agricultural products, collective promotion, geographic indications, supply control, quality.
    Date: 2006–05
  4. By: Hendrik Hakenes (MPI for Research on Collective Goods, Kurt-Schumacher-Str. 10, 53113 Bonn, Germany,; Martin Peitz (International University in Germany, 76646 Bruchsal, Germany,
    Abstract: Consider a two-product firm that decides on the quality of each product. Product quality is unknown to consumers. If the firm sells both products under the same brand name, consumers adjust their beliefs about quality subject to the performance of both products. We show that if the probability that low quality will be detected is in an intermediate range, the firm produces high quality under umbrella branding whereas it would sell low quality in the absence of umbrella branding. Hence, umbrella branding mitigates the moral hazard problem. We also find that umbrella branding survives in asymmetric markets and that even unprofitable products may be used to stabilize the umbrella brand. However, umbrella branding does not necessarily imply high quality; the firm may choose low-quality products with positive probability.
    Keywords: Umbrella branding, reputation transfer, signaling, experience goods.
    JEL: L14 L15 M37 D82
    Date: 2006–06
  5. By: Ana Oliveira-Brochado (Faculdade de Economia do Porto, Universidade do Porto); F. Vitorino Martins (Faculdade de Economia do Porto, Universidade do Porto)
    Abstract: The purpose of this work is to determine how well, criteria designed to help the selection of the adequate number of market segments, perform in recovering small niche segments, in mixture regressions of normal data, with experimental data. The simulation experiment compares several segment retention criteria, including information criteria and classification-based criteria. We also address the impact of distributional misspecification on segment retention criteria success rates. This study shows that Akaike’s Information criterion with penalty factors of 3 and 4, rather than the traditional value of 2, are the best segment retention criteria to use in recovering small niche segments. Although these criteria were designed for the specific context of mixture models, they are rarely applied in the marketing literature.
    Keywords: Information criteria; Latent Class Segmentation.
    JEL: C15 C52 M31
    Date: 2006–07
  6. By: Massimo FLORIO; Emanuele OZZIMO
    Abstract: In this paper we discuss the challenges for the European SMEs fac ing increased global competition, and how it is possible to desig n innovative strategies through the new Regional Competitiveness and Employment Objective. First, the paper offers an assessment o f the importance of SMEs in the EU context and particularly in th e regions concerned by the new objective. Second, the paper will discuss how globalisation poses a serious thread to this developm ent pattern. Third, we briefly explain why further labour market and product liberalisation policies probably have a limited poten tial. Fourth, there is a wide empirical literature, and a lot of practical experience, on innovation strategies for SMEs and clust ers in Europe. The paper will offer a critical assessment of thes e findings and will suggest how to make the best use of the limit ed, but critical, resources available under the new Regional Comp etitiveness Objective.
    Keywords: EU Structural funds, SMEs, Clusters, Innovation strategies
  7. By: Bhat Ramesh; Jain Nishant
    Abstract: Health insurance schemes are increasingly recognised as preferable mechanisms to finance health care provision. In this direction micro health insurance schemes and community based health insurance schemes are assuming significant importance in reaching large number of people. However, at the community level despite low premiums the penetration of health insurance is small. The objective of this paper is to analyse factors determining the demand for private health insurance in a micro insurance scheme setting. The study uses two-stage model to examine this issue. First, we determine the factors which affect the insurance purchase decisions and at second level we focus on studying factors which affect the amount of insurance purchase using Heckman two-stage estimation procedure. The data of this study is based on survey and collection of primary data from the Anand district of Gujarat where Charotar Arogya Mandal is offering a health insurance scheme. The results indicate that income and healthcare expenditure are significant determinants of health insurance purchase. Age, coverage of illnesses and knowledge about insurance were also found to be affecting health insurance purchase decision positively. For the decision regarding amount of health insurance purchase, income was found to be having significant but non-linear relationship. In addition, number of children in the family, age, and perception regarding future healthcare expenditure were also found to be significant. The study discusses implications of these results.
    Date: 2006–07–05
  8. By: Jacques Laye (LEF Umr Inra-Engref, Nancy INRA)
    Keywords: B-to-C, coalition formation, multi-agent
    JEL: L11 C63 D83
    Date: 2006–07–04

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