nep-mkt New Economics Papers
on Marketing
Issue of 2007‒05‒26
five papers chosen by
Joao Carlos Correia Leitao
University of the Beira Interior

  1. Consumer Information and Pharmaceutical Prices: Theory and Evidence By Granlund, David; Rudholm, Niklas
  2. Les effets des labels " bio " et " commerce équitable " sur le consentement à payer des chocolats By Tagbata, D.; Sirieix, L.
  3. The Doubtful Profitability of Foggy Pricing By Miravete, Eugenio J
  4. Cognitive styles and person-environment fit: an inquiry on the consequences of cognitive (mis)fit By Cools, E.; Van den Broeck, H.
  5. Competitive Pricing By Antonio Villar

  1. By: Granlund, David (Department of Economics); Rudholm, Niklas (The Swedish Retail Institute (HUI))
    Abstract: In this paper, the impact of increased information on brand name and generic pharmaceutical prices is analyzed both theoretically and empirically. The theoretical results show that an increase in information is likely to reduce the price of brand name pharmaceuticals, while the results regarding generics are less clear. In the empirical part of the paper, the introduction of the substitution reform in the Swedish pharmaceuticals market in October 2002 is used as a natural experiment regarding the effects of increased consumer information on pharmaceutical prices. The results clearly show that the reform has lowered the price of both brand name- and generic pharmaceuticals.
    Keywords: Pharmaceutical industry; generic competition; generic drugs; brand name drugs
    JEL: D80 D83 I11 L65
    Date: 2007–04–01
  2. By: Tagbata, D.; Sirieix, L.
    Abstract: Previous research has extensively studied the gap between environmental or social concern, and behaviour. However, measuring environmental or social dimension valuation remains challenging. This paper therefore fills this gap by measuring fair trade and organic labels valuation, using an experimental method (BDM mechanism). Two "organic and fair trade" and two conventional chocolate products have been tested by 102 consumers (blind test and full products test). Results show that organic and fair trade labels increase consumers willingness to pay (WTP), and allow to identify three consumers clusters : in the first one, consumers do not value these labels; on the contrary, consumers' WTP for organic and fair trade products in the second segment is significantly higher than their WTP for conventional products. In the last segment, taste is the most important criterion, and there is an additional WTP for fair trade and organic label only if consumers like the product. Our research is a contribution to a better understanding of consumers' valuation of fair trade and organic label, leading to managerial proposals as regard to this market (importance of taste, usefulness of double labels). ...French Abstract : Cet article répond à la question théorique des liens entre préoccupations environnementales et sociales, et à la question pratique de l'intérêt du double label " bio-équitable ", en s'appuyant sur une expérimentation économique basée sur le principe des enchères (mécanisme BDM). Quatre chocolats (deux bio-équitables, deux conventionnels) ont été dégustés et les personnes interrogées ont donné leur consentements à payer (CAP) sur la base de la dégustation ou/et des labels. Les résultats montrent qu'à l'aveugle, les deux chocolats bio-équitables ne sont pas les plus appréciés, mais qu'ils ont les CAP les plus élevés lorsque les labels sont apparents. Cependant, trois segments de consommateurs réagissant différemment au label " bio-équitable " ont été identifiés : près de la moitié sont insensibles à la présence du label ; pour un deuxième segment, l'influence du label " bio-équitable " sur la valorisation des produits est positive et importante ; enfin, pour le troisième segment, la valorisation du label " bio-équitable " est conditionnée au goût du produit. Notre étude apporte des résultats intéressants qu'il conviendra de vérifier sur des échantillons représentatifs dans plusieurs pays : le label bio-équitable entraîne une valorisation des produits ; cependant, la sensibilité des consommateurs à ce label est variable et le marché de ces produits ne doit pas être sur-estimé. Par ailleurs, les efforts sur l'amélioration de la qualité des produits bio-équitables doivent être maintenus. Enfin, le couplage des labels " bio " et " équitable " sur un même produit entraîne une sous-additivité du CAP par rapport aux CAP des deux labels considérés séparément et la double labellisation ne doit donc pas être systématique.
    JEL: C90 D12 D64 M31 Q20
    Date: 2007
  3. By: Miravete, Eugenio J
    Abstract: A particular tariff option is said to be foggy when another option or a combination of other tariff options offered by the same firm is always less expensive regardless of the usage profile of any customer. Alternatively, tariff fogginess may refer to the whole set of tariff options and it is related to the low likelihood that a particular tariff option ends up being the least expensive one among those of a menu of tariff plans for an arbitrary distribution of usage patterns. This paper takes advantage of the exogenous entry of a second carrier in the early U.S. cellular telephone industry. It shows that competition induces firms to introduce mostly non-foggy options, thus abandoning deceptive pricing strategies (fog lifting) aimed to profit from mistaken choices of consumers rather than softening competition through the use of foggy tactics (co-opetition). Results indicate that tariff fogginess is less severe with the entry of a second firm in the industry according to either definition of foggy pricing. Thus competition alone, and in particular the tactics of entrants, appears to correct deceptive pricing strategies, although such correction does not necessarily occur immediately after the entry of a competitor but rather in the long run. Results are robust to the existence of individual uncertainty regarding future telephone usage when consumers sign up for a particular tariff plan.
    Keywords: Co-opetition; Fog-Lifting; Foggy Strategies; Nonlinear Pricing; Phasing-out
    JEL: D43 L96 M21
    Date: 2007–05
  4. By: Cools, E.; Van den Broeck, H.
    Abstract: There is currently considerable interest in the key elements of person-environment fit to understand vocational behaviour and to develop strategic human resource management practices. In the light of this interest, we wanted (1) to investigate with the new Cognitive Style Indicator whether people within similar functions have similar cognitive styles, and (2) to examine the consequences of cognitive (mis)fit on three work attitudes. We used two large-scale databases (N = 24,267 and N = 2,182) to address these issues. We identified mainly a knowing-oriented cognitive climate in finance, information technology (IT), and research and development (R&D) functions; a planning-oriented cognitive climate in administrative and technical and production functions; and a creating-oriented cognitive climate in sales and marketing functions and general management. Furthermore, our findings demonstrated that people with a creating style show more job search behaviour and intention to leave than people with a planning style, irrespective of the cognitive climate they are working in. We contribute to increased understanding of the influence of cognitive styles on organisational behaviour and work attitudes. This study is relevant for selection and recruitment policies of organisations and in the context of training, job design, and workforce planning.
    Date: 2007–04–23
  5. By: Antonio Villar (Department of Economics, Universidad Pablo de Olavide)
    Abstract: Competitive pricing is a pricing rule that combines two principles that are present in competitive markets. The profit principle (an action will be chosen only if it yields maximal payoffs), and the scarcity principle (markets make expensive those commodities that restrict production possibilities). It is shown that, under standard assumptions, these principles imply profit maximization at given prices. But also that they can be applied to economies with non-convex production sets (e.g. firms with S-shaped production functions). The chief properties of this pricing rule, as well as the existence and efficiency of the associated equilibria, are analyzed
    Keywords: non-convex production sets, competitive pricing rule, competitive pricing equilibrium.
    JEL: D50
    Date: 2007–05

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