nep-mkt New Economics Papers
on Marketing
Issue of 2006‒11‒04
three papers chosen by
Joao Carlos Correia Leitao
Universidade da Beira Interior

  1. Selling to Consumers with Endogenous Types By Boone, Jan; Shapiro, Joel
  2. Optimal selection of households for direct marketing by joint modeling of the probability and quantity of response By Otter, Pieter W.; Scheer, Hiek van der; Wansbeek, Tom
  3. US Park Recreation Values (1968-2003): A Review of the Literature By Pamela Kaval

  1. By: Boone, Jan; Shapiro, Joel
    Abstract: For many goods (such as experience goods or addictive goods), consumers' preferences may change over time. In this paper, we examine a monopolist's optimal pricing schedule when current consumption can affect a consumer's valuation in the future and valuations are unobservable. We assume that consumers are anonymous, i.e. the monopolist can't observe a consumer's past consumption history. For myopic consumers, the optimal consumption schedule is distorted upwards, involving substantial discounts for low valuation types. This pushes low types into higher valuations, from which rents can be extracted. For forward looking consumers, there may be a further upward distortion of consumption due to a reversal of the adverse selection effect; low valuation consumers now have a strong interest in consumption in order to increase their valuations. Firms will find it profitable to educate consumers and encourage forward-looking behaviour.
    Keywords: addictive goods; endogenous types; experience goods; price discrimination
    JEL: D42 D82 L12
    Date: 2006–10
  2. By: Otter, Pieter W.; Scheer, Hiek van der; Wansbeek, Tom (Groningen University)
    Abstract: We present several methods for the maximization of expected profits when households are selected from a mailing list for a direct mail campaign. The response elicited from the campaign can vary over households, as is the case with fund raising or mail order selling. The decisions taken by the household are (a) whether to respond and, in the case of response, (b) the quantity of response, e.g. the sum donated or the monetary amount of the order. We jointly model both decisions and derive a number of profit maximizing selection methods. We empirically illustrate the methods using a data set from a charitable foundation. It appears that modeling both aspects of the response yields considerably higher profits relative to selection methods that are based on solely modeling the response probability.
    Date: 2006
  3. By: Pamela Kaval (University of Waikato)
    Abstract: The results of outdoor recreation consumer surplus studies for national parks, national forests, state parks and state forests in the United States from 1968 through 2003 are compared and analyzed across activity type, locational region, and park designation. The resulting data set includes 1,229 observations, spanning 36 years, 28 types of activities, and 106 locations. All consumer surplus data were converted to 2006 United States dollars per person per day for comparison purposes. It was discovered that activity and park type played a significant role in consumer surplus values. Activities such as mountain biking, windsurfing, and rock-climbing were among the highest valued activities while visiting environmental education centers was the lowest. When comparing park types, it was found that on average, activities at National Parks had higher values than national forests, state parks, or state forests. This meta-analysis is the most extensive literature review in the history of non-market consumer surplus values for outdoor recreation in the United States ever conducted and should prove beneficial to anyone seeking information on outdoor recreation studies as well as those wishing to conduct a benefit transfer analysis for their own land management area.
    Keywords: consumer surplus values; non-market valuation; Outdoor recreation; benefit transfer
    JEL: Q26
    Date: 2006–10–15

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