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on Marketing |
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Issue of 2007‒10‒20
three papers chosen by Joao Carlos Correia Leitao University of the Beira Interior |
| By: | Yongmin Chen (Department of Economics, University of Colorado at Boulder); Scott J. Savage (Department of Economics, University of Colorado at Boulder); |
| Abstract: | An important issue in economics is how market structure affects prices. While the standard view is that competition lowers prices, Chen and Riordan (2006) argued that with product differentiation it is not exceptional for prices to be higher under duopoly than monopoly. This paper empirically investigates one implication from Chen and Riordan, namely, that prices are lower under duopoly when consumer preferences for the two products are similar, and they are more likely to be higher under duopoly if consumer preferences for the two products are more diverse. Focusing on the price for cable modem Internet access, with or without competition from a digital subscriber line provider, and using education dispersion as a proxy for consumer preference diversity, we find empirical support for this implication. In markets where education dispersion is low, competition reduces prices. As education dispersion increases, the negative effect of competition on prices diminishes; and when the dispersion is high enough, competition increases prices. |
| Keywords: | competition, Internet, preference diversity, prices |
| JEL: | L1 L13 L96 |
| Date: | 2007–09 |
| URL: | http://d.repec.org/n?u=RePEc:net:wpaper:0713&r=mkt |
| By: | K. COUSSEMENT; D. VAN DEN POEL |
| Abstract: | Customer complaint management is becoming a critical key success factor in today’s business environment. This study introduces a methodology to improve complaint handling strategies through an automatic email classification system that distinguishes complaints from non-complaints. As such, complaint handling becomes less time-consuming and more successful. The classification system combines traditional text information with new information about the linguistic style of an email. The empirical results show that adding linguistic style information into a classification model with conventional text-classification variables results in a significant increase in predictive performance. In addition, this study reveals linguistic style differences between complaint emails and others. |
| Keywords: | Customer Complaint Handling, Call Center Email, Voice of Customers (VOC), Singular Value Decomposition (SVD), Latent Semantic Indexing (LSI), Automatic Email Classification |
| Date: | 2007–09 |
| URL: | http://d.repec.org/n?u=RePEc:rug:rugwps:07/481&r=mkt |
| By: | Nicholas Economides (Stern School of Business, New York University); Joacim Tåg (Swedish School of Economics and Business Administration, FDPE, and HECER); |
| Abstract: | We discuss the benefits of net neutrality regulation in the context of a two-sided market model in which platforms sell Internet access services to consumers and may set fees to content and applications providers “on the other side” of the Internet. When access is monopolized, we find that generally net neutrality regulation (that imposes zero fees “on the other side” of the market) increases total industry surplus compared to the fully private optimum at which the monopoly platform imposes positive fees on content and applications providers. Similarly, we find that imposing net neutrality in duopoly increases total surplus compared to duopoly competition between platforms that charge positive fees on content providers. We also discuss the incentives of duopolists to collude in setting the fees “on the other side” of the Internet while competing for Internet access customers. Additionally, we discuss how price and non-price discrimination strategies may be used once net neutrality is abolished. Finally, we discuss how the results generalize to other two-sided markets. |
| Keywords: | net neutrality, two-sided markets, Internet, monopoly, duopoly, regulation, discrimination |
| JEL: | L1 D4 L12 L13 C63 D42 D43 |
| Date: | 2007–09 |
| URL: | http://d.repec.org/n?u=RePEc:net:wpaper:0714&r=mkt |