nep-mkt New Economics Papers
on Marketing
Issue of 2012‒03‒21
four papers chosen by
Joao Carlos Correia Leitao
University of Beira Interior and Technical University of Lisbon

  1. Marketing Response Models for Shrinking Beer Sales in Germany By Polasek, Wolfgang
  2. Certification of Corporate Social Responsibility Activities in Oligopolistic Markets By Constantine Manasakis; Evangelos Mitrokostas; Emmanuel Petrakis
  3. In Absolute or Relative Terms? How Framing Prices Affects the Consumer Price Sensitivity of By Hendrik Schmitz; Nicolas R. Ziebarth
  4. Consumer protection and contingent charges By Armstrong, Mark; Vickers, John

  1. By: Polasek, Wolfgang (Department of Economics and Finance, Institute for Advanced Studies, Vienna, Austria and CMUP, Porto)
    Abstract: Beer sales in Germany are confronted for several years with a shrinking market share in the market of alcoholic beverages. I use the approach of sales response function (SRF) models as in Polasek and Baier (2010) and adapt it to time series observation of beer sales for simultaneous estimation. I propose a new class of growth sales (gSRF) models having endogenous and exogenous variables as in Polasek (2011) together with marketing efforts that follow a sustained growth allocation principle. This approach allows to model growth rates in markets that are exposed to fierce competition and where marketing efforts cannot be evaluated directly. The class of gSRF models has the property that it models supply (i.e. marketing efforts) and demand factors jointly in a log-linear regression model that are correlated over time. The estimated model can explain the relative success of marketing expenditures for the shrinking beer market in the period 1999-2010.
    Keywords: Sales response functions (SRF), Marketing budget models, MCMC estimation, Beer consumption, Optimal budget allocation
    JEL: C11 C15 C52 E17 R12
    Date: 2012–03
  2. By: Constantine Manasakis (Department of Political Science, University of Crete); Evangelos Mitrokostas (Department of Economics, University of Portsmouth); Emmanuel Petrakis (Department of Economics, University of Crete)
    Abstract: We investigate the impact of alternative certifying institutions on firms’ incentives to engage in costly Corporate Social Responsibility (CSR) activities as well as their relative market and societal implications. We find that the CSR certification standard is the lowest under for-profit private certifiers and the highest under a Non Governmental Organization (NGO), with the standard of a welfare maximizing public certifier lying in between. Yet, regarding industry output, this ranking is reversed. Certification of CSR activities is welfare enhancing for consumers and firms and should be encouraged. Finally, the market and societal outcomes of CSR certification depend crucially on whether certification takes place before or after firms’ CSR activities.
    Keywords: Corporate Social Responsibility, Oligopoly, Vertical Differentiation, Certification
    JEL: L13 L5 M14
    Date: 2012
  3. By: Hendrik Schmitz; Nicolas R. Ziebarth
    Abstract: Health Plan Choice Abstract: This paper provides field evidence on (a) how price framing affects consumers’ decision to switch health insurance plans and (b) how the price elasticity of demand for health insurance can be influenced by policymakers through simple regulatory efforts. In 2009, in order to foster competition among health insurance companies, German federal regulation required health insurance companies to express price differences between health plans in absolute Euro values rather than percentage point payroll tax differences. Using individual-level panel data, as well as aggregated health plan-level panel data, we find that the reform led to a sixfold increase in an individual’s switching probability and a threefold demand elasticity increase.
    Keywords: Health insurance; health plan switching; price competition; price elasticity; SOEP
    JEL: H51 I11 I18
    Date: 2011–12
  4. By: Armstrong, Mark; Vickers, John
    Abstract: Contingent charges for financial services, such as fees for unauthorized overdrafts, are often controversial. We study the economics of contingent charges in a stylized setting with naive and sophisticated consumers. We contrast situations where the naive benefit from the presence of sophisticated consumers with situations where competition works to subsidize the sophisticated at the expense of the naive, arguably unfairly. The case for regulatory intervention in these situations depends in good part, but not only, on the weight placed on distributional concerns. The economic and legal issues at stake are well illustrated by a case on bank charges recently decided by the UK Supreme Court.
    Keywords: Consumer protection; retail banking; bounded rationality; economics of contracts
    JEL: D18 G14 G21
    Date: 2012–03

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