nep-mkt New Economics Papers
on Marketing
Issue of 2011‒05‒07
seven papers chosen by
Joao Carlos Correia Leitao
University of Beira Interior and Technical University of Lisbon

  1. Paying for prominence By Armstrong, Mark; Zhou, Jidong
  3. Intertemporal Price Discrimination in Storable Goods Markets By Igal Hendel; Aviv Nevo
  4. Pigs in Cyberspace: A Natural Experiment Testing Differences between Online and Offline Club-Pig Auctions By Roe, Brian E.; Wyszynski, Timothy E.
  5. Fresh Produce Imports Affect U.S. Consumption and Prices By Huang, Sophia Wu; Huang, Kuo S.; Wells, Hodan Farah
  6. Point-of-Sale Nutrition Information and the Demand for Ready-to-Eat Cereals By Lin, Chung-Tung Jordan; Gao, Zhifeng; Lee, Jonq-Ying
  7. Price Elasticities of Demand for Food Away From Home (FAFH) By Levedahl, J. William

  1. By: Armstrong, Mark; Zhou, Jidong
    Abstract: We investigate three ways in which firms can become "prominent" and thereby influence the order in which consumers consider options. First, firms can affect an intermediary's sales efforts by means of commission payments. When firms pay commission to a salesman, the salesman promotes the product with the highest commission, and steers ignorant consumers towards the more expensive product. Second, sellers can advertise prices on a price comparison website, so that consumers investigate the suitability of products in order of increasing price. In such a market, equilibrium prices are lower when search costs are higher since a firm's benefit from being investigated first increases with search costs. Finally, consumers might first consider their existing supplier when they purchase a new product, which suggests a relatively benign rationale for the prevalence of cross-selling in markets such as retail banking.
    Keywords: Consumer search; e-commerce; price comparison websites; cross-selling; mis-selling; commission sales.
    JEL: M31 L13 D83
    Date: 2011–04–27
  2. By: Bakhtavoryan, Rafael; Capps, Oral Jr; Salin, Victoria
    Abstract: The US Food and Drug Administration confirmed in February 2007 that a major foodborne illness outbreak was caused by two peanut butter brands, Peter Pan and Great Value, manufactured by ConAgra Foods Inc. at its Sylvester, Georgia, processing plant. As a result, on February 14, 2007, ConAgra voluntarily issued a nationwide recall of its Peter Pan and Great Value peanut butter products produced since May 2006 and sold through grocery and retail stores throughout the United States. Using the ACNielsen Homescan Panel for calendar years 2006, 2007 and 2008, this study investigates the impacts of the recall on the demand for peanut butter by estimating a second degree polynomial distributed lag with a lag length of three and endpoint restrictions imposed. The estimation results showed that the recall did have a statistically significant positive impact on the demand for peanut butter as a category. Also, the recall appeared to have had a statistically significant demand-enhancing effect on the Jif peanut butter brand and a demand-diminishing effect on the Skippy peanut butter brand. In all the cases, the maximum impact of the recall took place one to two weeks after the release of the recall.
    Keywords: food recalls, polynomial distributed lag model, consumer behavior, Agricultural and Food Policy, Consumer/Household Economics, Demand and Price Analysis, Food Consumption/Nutrition/Food Safety, Health Economics and Policy, Marketing,
    Date: 2011
  3. By: Igal Hendel; Aviv Nevo
    Abstract: We study intertemporal price discrimination when consumers can store for future consumption needs. To make the problem tractable we offer a simple model of demand dynamics, which we estimate using market level data. Optimal pricing involves temporary price reductions that enable sellers to discriminate between price sensitive consumers, who anticipate future needs, and less price-sensitive consumers. We empirically quantify the impact of intertemporal price discrimination on profits and welfare. We find that sales: (1) capture 25-30% of the profit gap between non-discriminatory and third degree price discrimination profits, and (2) increase total welfare.
    JEL: D43 E3 E30 L1 L13
    Date: 2011–04
  4. By: Roe, Brian E.; Wyszynski, Timothy E.
    Abstract: We find sale prices and net revenues received by sellers in the Midwestern club pig market are higher at traditional face-to-face auctions than at comparable Internet auctions. The comparison overcomes adverse selection issues that commonly plague such analyses by using data from sellers that allocated pigs to both markets based solely on exogenous differences in dates between online and offline auctions. Furthermore, both auctions feature ascending price formats with âsoft-endingsâ and remaining quality variation is controlled by using detailed information on animal, seller and event characteristics. The results suggest that the higher prices and net revenues from traditional auctions are attributable to remaining differences in auction format and buyer pools. Furthermore, sellers may be willing to forgo higher revenues to capture the convenience and flexibility provided by Internet auctions, to reach buyers in other regions that face different seasonality in demand and to stimulate demand for privately negotiated sales.
    Keywords: auctions, electronic commerce, two-sided markets, livestock marketing, hedonic models, Agribusiness, Industrial Organization, Livestock Production/Industries, Marketing, D44, Q13,
    Date: 2011–04
  5. By: Huang, Sophia Wu; Huang, Kuo S.; Wells, Hodan Farah
    Keywords: Demand and Price Analysis, International Relations/Trade, Marketing,
    Date: 2011–07–24
  6. By: Lin, Chung-Tung Jordan; Gao, Zhifeng; Lee, Jonq-Ying
    Keywords: nutrition information, food demand, Demand and Price Analysis, Food Consumption/Nutrition/Food Safety, D12,
    Date: 2011
  7. By: Levedahl, J. William
    Abstract: Using a procedure by Deaton (1990) and data from a cross-sectional survey by CREST price elasticities of demand for three types of FAFH facilities are computed.
    Keywords: Price Elasticity of Demand, Food Away from Home, Cross-sectional data, Demand and Price Analysis, D12, C21,
    Date: 2011

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