nep-mkt New Economics Papers
on Marketing
Issue of 2007‒01‒23
six papers chosen by
Joao Carlos Correia Leitao
University of the Beira Interior

  2. Why were FIFA World Cup Tickets so cheap?: Monopoly Pricing, Demand Quality and Two-Sided Markets By Eichhorn, Christoph; Sahm, Marco
  3. Price Points and Price Rigidity By Levy, Daniel; Lee, Dongwon; Chen, Allan (Haipeng); Kauffman, Robert; Bergen, Mark
  4. Accelerated Internationalisation by Emerging Multinationals: the Case of hite Goods Sector By Federico BONAGLIA; Andrea GOLDSTEIN; John MATHEWS
  5. Optimal Sale: Auctions with a Buy-Now Option By Subir Bose; Arup Daripa

  1. By: Juan Luis Nicolau (Universidad de Alicante)
    Abstract: The objective of this study is to test the effect of the consumer¿s variety-seeking behaviour on the distance the tourist is prepared to travel; that is, his/her willingness to travel further. The empirical application is carried out in Spain in a context with 26 destinations, by applying Mixed Logit Models. The results evidence that the variety-seeking behaviour reduces the dissuasive effect of distance. El objetivo del presente estudio es contrastar el efecto del comportamiento ¿búsqueda de variedad¿ en la distancia que el turista está dispuesto a realizar; es decir, su predisposición a viajar más o menos lejos. La aplicación empírica se desarrolla en España en un contexto de 26 destinos, aplicándose un Modelo Logit Mixto. Los resultados evidencian que la ¿búsqueda de variedad¿ reduce el ¿efecto disuasivo¿ de la distancia.
    Keywords: Marketing Turístico, Búsqueda de variedad, Modelo Logit Mixto. Tourism Marketing, Variety-seeking behaviour, Mixed Logit Model.
    Date: 2006–12
  2. By: Eichhorn, Christoph; Sahm, Marco
    Abstract: We examine the pricing decision of a multi-product monopolist in a two-sided market where the type structure of buyers on one side of the market is an important determinant of profit on the other side. In this situation it might be optimal to set prices below the maximum sellout price and to ration demand by a random mechanism in the first market to reach a type distribution more favorable for sales in the other market. The model establishes demand quality as an alternative link between markets in addition to standard quantitative effects and explains frequently observed underpricing, e.g. in the (sports) entertainment industry. It also provides an explanation for the effort a monopolist incurs to deter from resale.
    Keywords: Underpricing; Demand Rationing; Resale Deterrence
    JEL: L12 D42 D45
    Date: 2007–01
  3. By: Levy, Daniel; Lee, Dongwon; Chen, Allan (Haipeng); Kauffman, Robert; Bergen, Mark
    Abstract: We offer new evidence on the link between price points and price rigidity using two datasets. One is a large weekly transaction price dataset, covering 29 product categories over an eight-year period from a large U.S. supermarket chain. The other is from the Internet, and includes daily prices over a two-year period for 474 consumer electronic goods covering ten product categories, from 293 different Internet retailers. Across the two datasets, we find that (i) 9 is the most frequently used price-ending for the penny, dime, dollar and the ten-dollar digits, (ii) the most common price changes are in multiples of dimes, dollars, and ten-dollars, (iii) 9-ending prices are at least 24% (and as much as 73%) less likely to change in comparison to prices ending with other digits, and (iv) the average size of the price change is higher if the price ends with 9 in comparison to non-9-ending prices. This link between price points and price rigidity is robust across a wide range of prices, products, product categories, and retail formats. We offer a behavioral explanation for the findings.
    Keywords: Price Point; 9-Ending Price; Price Rigidity; Rational Inattention; E-Commerce
    JEL: M30 E12 L16 M21 D80 E31
    Date: 2007–01–11
  4. By: Federico BONAGLIA (OECD Development Centre, Paris - France); Andrea GOLDSTEIN (OECD Development Centre, Paris - France); John MATHEWS (MacquarieGraduate School of Management, Sydney - Australia)
    Abstract: The emergence of a "second wave" of developing-country multinational enterprises (MNEs) in a variety of industries is one of the characterizing features of globalization. These new MNEs did not delay their internationalisation until they were large, as did most of their predecessors, and often become global as a result of direct firm-to-firm contracting. Many grow large as they internationalise conversely, they internationalise in order to grow large. This is a striking pattern which, if confirmed, indicates that enterprises from developing countries have pursued distinctive approaches to internationalisation. It is a further interesting hypothesis to investigate to what extent such firms, born as suppliers of established incumbents, have leveraged on their "latecomer" status to accelerate their internationalisation. This paper documents how emerging MNEs may follow quite different patterns to reach, or at least approach, global competitiveness. In particular, it investigates how three latecomer MNEs pursued global growth through accelerated internationalisation combined with strategic and organizational innovation. Haier (China), Mabe (Mexico) and Arcelik (Turkey) emerged as Dragon Multinationals in the large home appliances (so-called "white goods") industry. This is a producer-driven global value chain, characterized by mature technology and rapid delocalization to developing countries, where not only input costs are lower, but demand growth rates are higher - giving a decided latecomer advantage to these MNEs. Haier, Mabe and Arçelik leveraged their strategic partnership with established MNEs to upgrade their operations, evolving from the production of simple goods, into new product lines developed through their own design, branding and marketing capabilities. The recipe of their success has been the ability to treat global competition as an opportunity to build capabilities, move into more profitable industry segments, and adopt strategies that turn latecomer status into a source of competitive advantage. At the same time, their experiences show that there are many strategies and trajectories for going global.
    Date: 2006–10
  5. By: Subir Bose; Arup Daripa (School of Economics, Mathematics & Statistics, Birkbeck)
    Abstract: We characterize the optimal selling mechanism in a scenario where similar goods are sold to “high end” buyers through a posted price and to “lower end” buyers through an auction. We show that the optimal mechanism involves an auction which is a standard optimal auction (Myerson (1981)) up to a critical type. Types above the critical type are pooled. Further, the allocation probability jumps up at the critical type and is the maximal possible for the pooled types. Therefore other than pooling at the top, the optimal mechanism allocates the object as efficiently as in a standard optimal auction. We show that posted price selling followed by auctions with a “temporary” buy-now option implements the optimal mechanism. Auctions with such an option are in widespread use on eBay.
    Keywords: Optimal Auction, eBay Auctions, Buy-Now Option, Posted Price, Price Discrimination
    JEL: D44
    Date: 2007–02
  6. By: William R. Johnson
    Abstract: Technological changes over the past two decades have made it easier to distribute and to copy intellectual property. Creators and owners of intellectual property have responded to these changes with a variety of creative pricing strategies. The paper reviews some of these pricing innovations. Two broad categories of innovations are explored: those that facilitate price discrimination and those that exploit complementarities between di¤erent types of creative works.
    Keywords: pricing, intellectual property
    JEL: D4 O34
    Date: 2005–04

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