nep-mkt New Economics Papers
on Marketing
Issue of 2009‒03‒14
two papers chosen by
Joao Carlos Correia Leitao
Technical University of Lisbon

  1. Milk Marketing Order Winners and Losers By Hayley H. Chouinard; David E. Davis; Jeffrey LaFrance; Jeffrey M. Perloff
  2. Making Sense of Non-Binding Retail-Price Recommendations By Stefan Bühler; Dennis L. Gärtner

  1. By: Hayley H. Chouinard; David E. Davis; Jeffrey LaFrance; Jeffrey M. Perloff (School of Economic Sciences, Washington State University)
    Abstract: Determining the impacts on consumers of government policies affecting the demand for food products requires a theoretically consistent micro-level demand model. We estimate a system of demands for weekly city-level dairy product purchases by nonlinear three stage least squares to account for joint determination between quantities and prices. We analyze the distributional effects of federal milk marketing orders, and find results that vary substantially across demographic groups. Families with young children suffer, while wealthier childless couples benefit. We also find that households with lower incomes bear a greater regulatory burden due to marketing orders than those with higher income levels.
    Keywords: Milk, marketing orders, dairy industry regulation
    JEL: Q1 D12 E21
    Date: 2008–12
  2. By: Stefan Bühler; Dennis L. Gärtner
    Abstract: This paper provides a theoretical rationale for non-binding retail price recommendations (RPRs) in vertical supply relations. Analyzing a bilateral manufacturer-retailer relationship with repeated trade, we show that linear relational contracts can implement the surplusmaximizing outcome. If the manufacturer has private information about production costs or consumer demand, RPRs may serve as a communication device from manufacturer to retailer. We characterize the properties of efficient bilateral relational contracts with RPRs and discuss extensions to settings where consumer demand is affected by RPRs, and where there are multiple retailers or competing supply chains.
    Keywords: vertical relationships, relational contracts, asymmetric information, price recommendations
    JEL: D23 D43 L14 L15
    Date: 2009–02

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