nep-mkt New Economics Papers
on Marketing
Issue of 2006‒08‒05
five papers chosen by
Joao Carlos Correia Leitao
Universidade da Beira Interior

  1. The elimination of Madagascar ' s Vanilla Marketing Board, ten years on By Cadot, Olivier; Dutoit, Laure; de Melo, Jaime
  2. Evaluating Welfare with Nonlinear Prices By Peter C. Reiss; Matthew W. White
  3. Another look at credit card pricing and its disclosure: Is the semi-annual pricing data reported by credit card issuers to the Fed helpful to consumers or researchers? By Mark Furletti; Christopher Ody
  4. Micropayments: the final frontier for electronic consumer payments By James C. McGrath
  5. Microenterprises and Multiple Bank Relationships: Evidence from a Survey among Professionals By Doris Neuberger; Solvig Räthke

  1. By: Cadot, Olivier; Dutoit, Laure; de Melo, Jaime
    Abstract: This paper explores how the elimination of Madagascar ' s Marketing Board in 1995 affected prices paid to farmers, incentives, and regional indicators of poverty and inequality. After steadily losing market share, Madagascar has been able to regain some of the lost ground since the mid-1990s. Margins between freight on board (FOB) and farmgate prices have spectacularly narrowed down, but this effect is dwarfed by that of world-price volatility. A counterfactual analysis based on a model of Cournot competition between vanilla traders suggests that whatever limited competition there is among them has contributed to raise purchase prices and the cash income of vanilla farmers. But the effect on farmers ' consumption remains small because a large part of it is self-consumed. The effect on aggregate measures of poverty and inequality is even smaller, even at the regional level. After taking into account the reduction in Madagascar ' s monopoly power on the world vanilla market implied by the elimination of the Marketing Board, the induced rise in producer prices is estimated to have lifted about 20,000 individuals out of poverty.
    Keywords: Markets and Market Access,Access to Markets,Economic Theory & Research,Crops & Crop Management Systems,Food & Beverage Industry
    Date: 2006–08–01
  2. By: Peter C. Reiss; Matthew W. White
    Abstract: This paper examines how to evaluate consumer welfare when consumers face nonlinear prices. This problem arises in many settings, such as devising optimal pricing strategies for firms, assessing how price discrimination affects consumers, and evaluating the efficiency costs of many transfer programs in the public sector. We extend prior methods to accommodate a broad range of modern pricing practices, including menus of pricing plans. This analysis yields a simpler and more general technique for evaluating exact consumer surplus changes in settings where consumers face nonlinear prices. We illustrate our method using recent changes in mobile phone service plans.
    JEL: D12 D40 H20 L10
    Date: 2006–07
  3. By: Mark Furletti; Christopher Ody
    Abstract: Credit Card Pricing Developments and Their Disclosure,” a January 2003 Payment Cards Center Discussion Paper, examined the history and dynamics of credit card pricing and how such pricing is described to consumers in Truth in Lending solicitation disclosures. In this paper, we examine credit card pricing as revealed to consumers in a different context: that of a semiannual shopping guide that the Board of Governors publishes pursuant to the Truth in Lending Act. Specifically, we ask two questions: Are the data on credit card pricing in the guide useful to consumers? Are the data collected for the guide (commonly known as Terms of Credit Card Plan [TCCP] data) of value to researchers? With respect to both of these questions, we find that the data are becoming less useful.
    Keywords: Credit cards
    Date: 2006
  4. By: James C. McGrath
    Abstract: Small payments of less than $5 have resisted the wave of electronification that has swept consumer payments in recent years. However, a number of innovations — both new technologies and new ways of doing business — have done much to make such electronic “micropayments” less expensive and more convenient. Now, having proven themselves in several online markets, micropayments are poised to make inroads at the physical point of sale. This paper looks at some of the success stories (and failures), both in the U.S. and abroad, to identify possible conditions for success and to gauge the outlook for the future. It finds that industry structure, the coordination of standards, and customer preferences and experiences have all influenced the development of these products. While different markets around the world have supported different types of solutions, the successful products have delivered clear utility to the consumer, along with compelling economics for the different parties in the value chain. With critical mass in sight, the future looks promising.
    Keywords: Electronic funds transfers
    Date: 2006
  5. By: Doris Neuberger (University of Rostock); Solvig Räthke (University of Rostock)
    Abstract: An overview of previous evidence about relationship banking to SMEs shows that multiple banking relationships prevail even at small firms, but there is hardly evidence on the number of banking relationships held by micro firms. To close this gap, we use data from a survey conducted among professionals in Germany in 2002. Being self-employed persons acting in the services sector, professionals are mostly informationally opaque micro firms. To explain the number of their banking relationships, we investigate characteristics of the firm and its loan demand, characteristics of the housebank and its relationship to the borrower, and variables of bank market structure and regulation. Consistent with the theory of asymmetric information, we find that these firms hold a small number of bank relationships, which increases in firm size and age. An increase in the duration or importance of the housebank relationship does not induce multiple banking relationships as predicted by the hold-up theory. Professionals rather tend to hold multiple banking relationships to increase their credit availability and finance larger loans. The type of the housebank and local banking market concentration do not seem to matter. All in all, the results indicate that multiple bank relationships help to overcome credit rationing.
    JEL: G21 G32
    Date: 2006

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