nep-mkt New Economics Papers
on Marketing
Issue of 2012‒09‒30
six papers chosen by
Joao Carlos Correia Leitao
University of Beira Interior and Technical University of Lisbon

  1. Do consumers prefer offers that are easy to compare? An experimental investigation. By Crosetto, Paolo; Gaudeul, Alexia
  2. Brand Name and Private Label Price Setting by a Monopoly Store By Jeffrey M. Perloff; Jeffrey LaFrance; Hayley H. Chouinard
  3. Consumer evaluation of a typical Italian salami: an experimental auction approach By Gianluca Stefani; Alessio Cavicchi
  4. Competition versus Collusion: The Impact of Consumer Inertia By Bos Iwan; Peeters Ronald; Pot Erik
  5. Mandatory labelling, nutritional taxes and market forces: An empirical evaluation of fat policies in the French fromage blanc and yogurt market. By Olivier Allais;; Fabrice Etile;; Sebastien Lecocq
  6. Language, Internet and Platform Competition: the case of Search Engine By Jeon, Doh-Shin; Jullien, Bruno; Klimenko, Mikhail

  1. By: Crosetto, Paolo; Gaudeul, Alexia
    Abstract: Abstract Firms can exploit consumers' mistakes when facing complex purchasing decision problems but Gaudeul and Sugden (2012) argue that if at least some consumers disregard offers that are difficult to compare with others then firms will be forced into adopting common ways to present their offers and thus make choice easier. We design an original experiment to check whether consumers’ indeed favor those offers that are easy to compare with others in a menu. A sufficient number of subjects do so with sufficient intensity for offers presented in common terms to generate higher revenues than offers that are expressed in an idiosyncratic way.
    Keywords: Bounded Rationality; Cognitive Limitations; Standards; Consumer Choice; Experimental Economics; Heuristics; Pricing Formats; Spurious Complexity
    JEL: D18 D81 C91
    Date: 2012–09–20
  2. By: Jeffrey M. Perloff; Jeffrey LaFrance; Hayley H. Chouinard
    Abstract: A monopoly that sells to brand-name loyal customers and to price-sensitive customers must decide whether to carry both name-brand and a private-label products and how much to charge. The monopoly may charge either more or less for the brand name if it carries a private label, and the price differential between the products is sensitive to cost and taste parameters.
    Keywords: brand name, private label, monopoly, pricing
    JEL: L2 D3 D4
    Date: 2012–09
  3. By: Gianluca Stefani (University of Florence); Alessio Cavicchi (University of Macerata)
    Abstract: <div style="text-align: justify">This paper reports results of an evaluation experiment designed to provide both hedonic scores and measurements of consumer willingness to pay (WTP), on the basis of visual inspection, tasting, and presentation of information on origin, ingredients, and production processes of typical kinds of Italian salami with pig blood as their principal component. The information on the production methods and ingredients seemed to interact negatively with the sensorial perception of the product after tasting, probably because of the presence of blood and other problematic components among the ingredients.</div>
    Keywords: hedonic scores,experimental auctions,food marketing,consumer behavior
    JEL: C91 C93 D12 Q13
    Date: 2011–12
  4. By: Bos Iwan; Peeters Ronald; Pot Erik (METEOR)
    Abstract: We consider a model of dynamic price competition to analyze the impact of consumer inertia on theability of firms to sustain high prices. Three main consequences are identified: (i) maintaininghigh prices does not require punishment strategies when firms are sufficiently myopic, (ii) ifbuyers are sufficiently inert, then high prices can be sustained for all discount factors, and(iii) the ability to maintain high prices may depend non-monotonically on the level of thediscount factor. These results provide a number of valuable insights with regard to competitiveand collusive pricing behavior. For example, our findings suggest that measures aiming at loweringthe degree of consumer inertia may in fact facilitate collusion in network industries.
    Keywords: microeconomics ;
    Date: 2012
  5. By: Olivier Allais;; Fabrice Etile;; Sebastien Lecocq
    Abstract: This paper evaluates and compares two popular options of nutritional policy: mandatory front-of-pack labelling and the fat tax. Using household scanner data on fromages blancs and dessert yogurts, the distribution of consumer preferences for fat and for front-of-pack fat labels are separately identiÂ…ed by exploiting an exogenous difference in labelling requirements between the two product categories. The demand estimates are then used to calibrate an oligopolistic supply model, and to evaluate the impact of public policies. In the absence of producer price response, making fat labels mandatory would reduce by 38% the fat supplied by this market to regular consuming households. An ad-valorem tax of 10% (5%) on the producer price of full-fat (half-skimmed) products has a similar impact. However, after accounting for producer price response, mandatory labels yield only a 1:5% decrease in fat purchases, as against -9% for the fat tax. This is explained by the producer price response, which neutralises up to 96% of the impact of mandatory labelling on consumer demand. This illustrates how market forces can defeat any intended effect of market-based public health actions.
    Date: 2012–07
  6. By: Jeon, Doh-Shin; Jullien, Bruno; Klimenko, Mikhail
    Abstract: The World Wide Web was originally a totally English-based medium due to its US origin. Although the presence of other languages has steadily risen, content in English is still dominant, which raises a natural question of how bilingualism of con- sumers of a home country a¤ects production of web content in the home language and domestic welfare? In this paper, we address this question by studying how bilingual- ism a¤ects competition between a foreign search engine and a domestic one within a small country and thereby production of home language content. We ?nd that bilingualism unambiguously softens platform competition, which in turn can induce a reduction in home language content and in home country?s welfare. In particular, it is possible that content in the foreign language crowds out so much content in the home language that consumers enjoy less content when they are bilingual than when they are monolingual.
    Keywords: anguage, Bilingualism, Platform, Search Engine, Two-sided Mar- ket, International Trade.
    Date: 2012–09–14

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