nep-mkt New Economics Papers
on Marketing
Issue of 2012‒04‒10
five papers chosen by
Joao Carlos Correia Leitao
University of Beira Interior and Technical University of Lisbon

  1. Why Might Organic Labels Fail to Influence Consumer Choices? Marginal Labelling and Brand Equity Effects By Fabrice Larceneux; Florence Benoît-Moreau; Valérie Renaudin
  2. Product quality, competition, and multi-purchasing By Anderson, Simon P.; Foros, Øystein; Kind, Hans Jarle
  3. Evidence on the effects of mandatory disclaimers in advertising By Green, Kesten C.; Armstrong, J. Scott
  4. Platform Pricing at Sports Card Conventions By Ginger Zhe Jin; Marc Rysman
  5. The Effects of Gasoline Price Regulations: Experimental Evidence By Haucap, Justus; Müller, Hans Christian

  1. By: Fabrice Larceneux (DRM - Dauphine Recherches en Management - CNRS : UMR7088 - Université Paris IX - Paris Dauphine); Florence Benoît-Moreau (DRM - Dauphine Recherches en Management - CNRS : UMR7088 - Université Paris IX - Paris Dauphine); Valérie Renaudin (DRM - Dauphine Recherches en Management - CNRS : UMR7088 - Université Paris IX - Paris Dauphine)
    Abstract: An organic label offers a market signal for producers of organic food products. In Western economies, the label has gained high recognition, but organic food still represents a small part of total food consumption, which raises questions about the label's efficacy. By considering organic labels as a signal of quality for consumers, this article studies how this signal interacts with brand signals when both are visible to consumers, applying a cobranding framework. This research examines the moderating effect of the brand on organic label effects. In a 2×2 experimental design using real consumers (N0122) in a shopping context, it found that, depending on brand equity, the marginal effect of organic labelling information in terms of perceived product quality varies. In particular, when brand equity is high (low), the organic label appears less (more) effective. However, regardless of the brand equity level, an organic label makes the environmentally friendly attribute salient, which has a positive impact on perceived quality. Pertinent implications for marketing and public policy are discussed.
    Keywords: Organic label . Brand equity . Label equity . Cobranding . Perceived quality
    Date: 2012–01–01
  2. By: Anderson, Simon P.; Foros, Øystein; Kind, Hans Jarle
    Abstract: In a Hotelling duopoly model, we introduce quality that is more appreciated by closer consumers. Then higher common quality raises equilibrium prices, in contrast to the standard neutrality result. Furthermore, we allow consumers to buy one out of two goods (single-purchase) or both (multi-purchase). Prices are strategically independent when some consumers multi-purchase because suppliers price the incremental benefit to marginal consumers. In a multi-purchase regime, there is a hump-shaped relationship between equilibrium prices and quality when quality functions overlap. If quality is sufficiently good, it might be a dominant strategy for each supplier to price high and eliminate multi-purchase.
    Keywords: content competition; hotelling model with quality; incremental pricing; multi-purchase
    JEL: D12 D71 D82 H41 O12
    Date: 2012–04
  3. By: Green, Kesten C.; Armstrong, J. Scott
    Abstract: We found no evidence that consumers benefit from government-mandated disclaimers in advertising. Experiments and common experience show that admonishments to change or avoid behaviors often have effects opposite to those intended. We found 18 experimental studies that provided evidence relevant to mandatory disclaimers. Mandated messages increased confusion in all, and were ineffective or harmful in the 15 studies that examined perceptions, attitudes, or decisions. We conducted an experiment on the effects of a government-mandated disclaimer for a Florida court case. Two advertisements for dentists offering implant dentistry were shown to 317 subjects. One advertiser had implant dentistry credentials. Subjects exposed to the disclaimer more often recommended the advertiser who lacked credentials. Women and less-educated subjects were particularly prone to this error. In addition, subjects drew false and damaging inferences about the credentialed dentist.
    Keywords: consumer protection; corrective advertising; decision making; government regulation; judgment
    JEL: H11 M37 K23
    Date: 2012–03–30
  4. By: Ginger Zhe Jin; Marc Rysman
    Abstract: We study a new data set of US sports card conventions in order to evaluate the pricing theory of two-sided markets. Conventions are two-sided because organizers must set fees to attract both consumers and dealers. We have detailed information on consumer price, dealer price and, since most conventions are local, the market structure for conventions. We present several findings: first, consumer pricing decreases with competition at any reasonable distance, but pricing to dealers is insensitive to competition and in longer distances even increases with competition. Second, when consumer price is zero (and thus constrained), dealer price decreases more strongly with competition. These results are compatible with existing models of two-sided markets, but are difficult to explain without such models.
    JEL: D4 L1 L8
    Date: 2012–03
  5. By: Haucap, Justus; Müller, Hans Christian
    Abstract: Economic theory suggests that gasoline retail markets are prone to collusive behavior. Oligopoly market structures prevail, market interactions occur frequently, prices are highly transparent, and demand is rather inelastic. A recent sector inquiry in Germany backed suspicions of tacit collusion and suggested to adopt regulatory pricing rules for gas stations similar to those implemented in Austria, parts of Australia, Luxembourg or parts of Canada. In order to increase consumer welfare these rules either restrict the number of price changes per day or they limit the mark‐up for gasoline retail prices. As theoretical predictions about the impact of these measures are mixed and empirical studies rare, we analyze the effects, using an experimental gasoline market in the lab. Our results reveal that two of the suggested rules rather decrease consumer welfare: The Austrian rule which only allows one price increase per day (while price cuts are always possible) and the Luxembourg rule which introduces a maximum markup for retailers. While no rule tends to induce lower retail prices, the Western Australian rule which allows at most one daily price change (no matter whether up or down) does at least not harm consumers. --
    Keywords: Gasoline Prices,Fuel Prices,Experimental Gasoline Market,Fuel Price Regulation,Retail Price Regulation,Gas Stations
    JEL: L13 L71 L81 L88 K23 C90
    Date: 2012

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