nep-mkt New Economics Papers
on Marketing
Issue of 2007‒06‒18
seven papers chosen by
Joao Carlos Correia Leitao
University of the Beira Interior

  1. Consumer Search and Information Intermediaries By Moez Bennouri; C. Robert Clark; Jacques Robert
  2. Monopoly pricing of social goods By Sääskilahti, Pekka
  3. Optimal Bundle of Multimedia Services in Emerging Mobile Markets By NAM, ChanGi; KIM, SeongCheol; CHO, DeockHee; LEE, HyeongJik
  4. Excess Demand and Rationing: Selling to an Input By Lutz-Alexander Busch; Phil Curry
  5. Breadth and Depth of Main Technology Fields: An empirical investigation using patent data By Muge Ozman
  6. Reciprocity, Inequity Aversion, and Oligopolistic Competition By Pinto, Luis Santos
  7. Bundles and Range Strategies: The Case of Telecom Operators By PERNET, Sophie

  1. By: Moez Bennouri (Service de l’enseignement de la finance, HEC Montréal); C. Robert Clark (IEA, HEC Montréal); Jacques Robert (TI, HEC Montréal)
    Abstract: In this paper we model the market for a homogeneous good and examine the role of information in determining market outcomes. Unlike in Baye and Morgan (2001) where consumers can only learn about the prices charged by different firms by subscribing to an information intermediary’s service, we allow consumers to shop for price quotes. We are interested in determing the impact on market outcomes of allowing for this additional means of information acquisition. Relative to the case where consumers have no interest in searching for prices, consumers become no better off as the cost of search falls. The intermediary, in an effort to compensate for the loss of revenue that it might have earned from consumers, increases the fees that it charges to firms for the right to advertise their product through it. As a result, fewer firms advertise in equilibrium, and so, those that do post higher prices, and, in expectation, consumers pay more for the product. The price increase appropriates all of the gains in consumer surplus generated by the decrease in the cost of search.
    Keywords: Search, advertising, information intermediary, price dispersion
    Date: 2007–01
  2. By: Sääskilahti, Pekka
    Abstract: We analyse the roles of social network topology and size on the monopoly pricing of network goods in a market, where consumers interact with each other and are characterised by their social relations. The size effect is the well-known network externalities phenomenon, while the topological effect has not been previously studied in this context. The topological effect works against, and dominates, the size effect in monopoly pricing by reducing the monopoly's capacity to extract consumer surplus. Under asymmetric information about consumer types, the monopoly prefers symmetric network topologies, but the social optimum is an asymmetric network.
    Keywords: social relations; networks; coordination; monopoly
    JEL: L14 D42 D82
    Date: 2007
  3. By: NAM, ChanGi; KIM, SeongCheol; CHO, DeockHee; LEE, HyeongJik
    Abstract: Although various emerging technologies have been launched, they present limitations as far as offering full-scale ubiquitous services independently is concerned. In view of this fact, service providers are likely to provide bundled services among possible combinations of services. Indeed, making a timely decision regarding the value maximization of bundled service is directly related to service providers' future growth and success in the turbulent market environment. This paper aims to find the optimal service bundle among five emerging mobile services: T-DMB, S-DMB, WiBro, HSDPA, and Telematics. Considering what kinds of service features among the five emerging services offer differentiation to customers, we examine four attributes (TV, voice, portable wireless internet, and location-based services) using conjoint analysis to distinguish the service features. Our results show that TV service is the most favored among the attributes, followed by voice service in second position, and the internet and location-based service in third and fourth place respectively. Our result implies that mobile operators would be better off bundling HSDPA and S-DMB first, and then adding other services later, while fixed operators would be better off bundling WiBro and S-DMB first and other services later.
    Keywords: telecommunications and broadcasting convergence; emerging service; 4G Technology; T-DMB; S-DMB; WiBro; HSDPA; telematics; customer preference.
    JEL: H23 K21 L82 L96
    Date: 2006–09
  4. By: Lutz-Alexander Busch (University of Waterloo); Phil Curry (Simon Fraser University)
    Abstract: This paper develops a model that explains the persistence of excess demand for some goods. It offers that, for some goods, consumers care about who else is consuming the good. As such, their willingness to pay depends on their beliefs about the other consumers. We demonstrate that screening mechanisms that impose costs in negative correlation to an individual's (positive) externality can increase profits while appearing to generate excess demand. We feel that such a model is appropriate in that casual observation seems to indicate that it does well in predicting which goods would use such a screening mechanism and which would not.
    Keywords: excess demand, distributional waits, scalping, pricing
    JEL: L11 K42
    Date: 2007–06
  5. By: Muge Ozman (Science and Technology Policies Research Centre)
    Abstract: Recently work on technological change has emphasized the importance and implications of different knowledge bases among industries in terms of innovative potential. In some industries, products and processes have become more complex, as well as there appears to be increased convergence in some market segments. Although increasing attention has been given to features of knowledge bases, there have been limited empirical research on how to measure them. In this paper a method is proposed to measure empirically the breadth and depth dimensions of main technology fields, sectors and firms in the economy. For this purpose, we measure the knowledge bases of 30 main technology fields by using the concepts of breadth and depth. Breadth corresponds to the range of different subjects that a technology field draws upon. Depth refers to the extent to which a certain field is exploited in detail. We position the main technology fields in the breadth and depth space by utilizing the EPO (European Patent Office) database between 1978-2000. We also present the evolution of breadth and depth through time, as well as the breadth and depth dimensions of 40 largest firms in biotechnology and telecommunications. Our results reveal that the both technology fields and firms are largely scattered in the breadth and depth space. Biotechnology stands out to have the highest breadth and depth.
    Keywords: Patents, Breadth and depth, technology fields, knowledge base.
    Date: 2007–06
  6. By: Pinto, Luis Santos
    Abstract: This paper studies how reciprocity and inequity aversion influence the behavior of firms in imperfectly competitive markets. The paper shows that if reciprocal firms compete à la Cournot, then they are able to sustain “collusive” outcomes under a positive reciprocity equilibrium. By contrast, Stackelberg warfare outcomes may emerge under a negative reciprocity equilibrium. The results for inequity aversion are similar. Cournot competition between inequity averse firms can be harmful to consumers if it leads to equilibria where firms feel compassion toward each other. However, in equilibria where inequity averse firms are envious of each other consumers are better off than if firms were selfish. The paper also shows that only under very restrictive conditions does reciprocity or inequity aversion have an impact on Bertrand competition. Finally, the paper shows that non-selfish preferences have a greater impact on equilibrium outcomes in markets with a small number of firms.
    Date: 2007
  7. By: PERNET, Sophie
    Abstract: Against a background of competition and the generalisation of IP that characterises the field of electronic communications, the concept of the "bundle" has resulted in the emergence of "triple play", and even "quadruple play." This paper offers an overview of the growth of this phenomenon by introducing a distinction between the basic components of multiplay strategies and the diverse range of functions that can be linked to these strategies.
    Keywords: Bundle; range strategy; triple play; quadruple play.
    JEL: O33 L86 L82 O14 L88 H41 K23 L90 L96
    Date: 2006–09

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