nep-mkt New Economics Papers
on Marketing
Issue of 2012‒11‒24
seven papers chosen by
Joao Carlos Correia Leitao
University of Beira Interior and Technical University of Lisbon

  1. Deceptive advertising with rational buyers By Ursino, Giovanni; Piccolo, Salvatore; Tedeschi, Piero
  2. Austrian-style gasoline price regulation: How it may backfire By Obradovits, Martin
  3. Interfirm Bundled Discounts in Oligopolies By Jong-Hee Hahn; Sang-Hyun Kim
  4. Ethical consumption from niche to mainstream – Discovering consumers’ information need By Schleenbecker, Rosa; Hamm, Ulrich
  5. Identification of Demand Models of Multiple Purchases By Itai Sher; Kyoo il Kim
  6. E-books: Developments and Policy Considerations By OECD
  7. Perception of Global Food Security Issues in the German Public By Klumper, Wilhelm; Kathage, Jonas; Qaim, Matin

  1. By: Ursino, Giovanni; Piccolo, Salvatore; Tedeschi, Piero
    Abstract: We study a Bertrand game where two sellers supplying products of different and unverifiable qualities can outwit potential clients through their (costly) deceptive advertising. We characterize a class of pooling equilibria where sellers post the same price regardless of their quality and low quality ones deceive buyers. Although in these equilibria low quality goods are purchased with positive probability, the buyer (expected) utility can be higher than in a fully separating equilibrium. It is also argued that low quality sellers invest more in deceptive advertising the better is their reputation vis-à-vis potential clients — i.e., firms that are better trusted by customers, have greater incentives to invest in deceptive advertising when they produce a low quality product. Finally, we characterize the optimal monitoring effort exerted by a regulatory agency who seeks to identify and punish deceptive practices. When the objective of this agency is to maximize consumer surplus, its monitoring effort is larger than under social welfare maximization.
    Keywords: Misleading advertising; Deception; Bayesian Consumers; Asymmetric Information
    JEL: L1
    Date: 2012–11–08
  2. By: Obradovits, Martin
    Abstract: In January 2011, a price regulation was established in the Austrian gasoline market which prohibits firms from raising their prices more than once per day. Similar restrictions have been discussed in New York State and Germany. Despite their intuitive appeal, this article argues that Austrian-type policies may actually harm consumers. In a two-period duopoly model with consumer search, I show that in face of the regulation, firms will distort their prices intertemporally in such a way that their aggregate expected profit remains unchanged. This implies that, as some consumers find it optimal to delay their purchase due to expected price savings, but find it inconvenient to do so, a friction is introduced that decreases net consumer surplus in the market.
    Keywords: Price Regulation; Consumer Search; Price Dispersion; Intertemporal Search; Regulation; Austria
    JEL: L5 L13 D83
    Date: 2012–11–08
  3. By: Jong-Hee Hahn (school of economics, Yonsei Uneversity); Sang-Hyun Kim (Department of Economics, Michigan State University)
    Abstract: This paper shows that firms producing homogeneous goods (e.g. Bertrand competitors) can achieve supernormal profits using interfirm bundled discounts, which connect their product with a specific brand of other firm with market power. By committing to a price discount exclusively to buyers of a particular brand of another good, the firms create a sort of artificial switching costs and attain a semi-collusive outcome. In fact, the discount scheme allows the firms with no market power to avoid Bertrand trap by leveraging other firms' market power. Consumers are worse off due to higher prices under bundled discounts.
    Keywords: Brand-specific discounts, bundling, co-branding, co-promotion
    Date: 2012–07–13
  4. By: Schleenbecker, Rosa; Hamm, Ulrich
    Abstract: Fair Trade-products gained increasing importance during the last 15 years and entered the mainstream market. Nowadays, they are no longer sold only by a few selected shops but supermarkets and discount shops also offer them. The entrance into a different market is accompanied by an adjustment to a different group of consumers, which necessitates the exploration of consumers’ information needs regarding quantity and quality of Fair Tradeproducts. In this study, coffee as a popular Fair Trade-product was exemplary chosen in order to explore the task. As a survey method, an Information Display Matrix (IDM)-experiment was chosen in order to be able to trace the information acquisition behaviour and the final purchase decision. IDM experiments are suited to sequentially trace information search. The IDM was accompanied by a complementary questionnaire; both survey methods were conducted computer assisted. Results show that among the tested product attributes, product price, production methods, Fair Trade-label and the ethical attribute ‘protection of children’ were most important. Consumers are also willing to pay a higher price for a product which fulfills their requirements of a Fair Trade coffee. With regard to information acquisition behaviour, results show that consumers perform a rather extensive information search and apply strategic approaches, whereof attribute-based strategies are most popular.
    Keywords: Ethical Consumption, Fair Trade, Information Search Behaviour, Information Display Matrix, IDM, Organic, Agribusiness, Agricultural and Food Policy, D12, M 31,
    Date: 2012–09–18
  5. By: Itai Sher (Department of Economics, University of Minnesota); Kyoo il Kim (Department of Economics, University of Minnesota)
    Abstract: We study the nonparametric identification of distributions of utility functions in a multiple purchase setting with a finite number of consumers. Each utility function takes as arguments subsets or, alternatively, quantities of the multiple goods. We exploit mathematical insights from auction theory to generically identify the distribution of utility functions. We use price variation and aggregate data on the sales of each product, but not on individual level purchases or the total sales of bundles of products.
    Keywords: Multiple Discrete Choice, Multiple Purchase, Nonparametric Identification, Distribution of Utility Functions, Individual Heterogeneity, Submodularity, Gross Substitutes
    JEL: C14 D11
    Date: 2012–11–09
  6. By: OECD
    Abstract: Books have undergone a massive transformation from a physical object to something entirely different: the electronic book, or “e-book”. This report provides background on e-book markets and examines various policy issues related to e-books. These include differing tax rates in countries between physical books and e-books, consumer lock-in to specific platforms, limitations on how users can read and share their purchased content, and a lack of transparency about how data on their reading habits is being used.
    Date: 2012–10–29
  7. By: Klumper, Wilhelm; Kathage, Jonas; Qaim, Matin
    Abstract: Die Ergebnisse einer Befragung der deutschen Öffentlichkeit zum Thema Welternährung werden in diesem Beitrag vorgestellt. Die Befragung wurde online mit 1200 Personen durchgeführt. Welternährung ist für die Mehrheit kein Top-Thema. Die Meisten nehmen das Hungerproblem vor allem dann war, wenn die Medien in akuten Krisensituationen darüber berichten. Die Bewertung von Ursachen und Maßnahmen zeigt, dass Hunger in erster Linie als Verteilungsproblem gesehen wird. Ansätze zur Produktivitätssteigerung in der Landwirtschaft werden überwiegend als nicht zentral für die Verbesserung der Welternährung eingestuft. Umweltschutz wird von der Öffentlichkeit im Vergleich zur Welternährung eine höhere Priorität eingeräumt. Hieraus ergeben sich scheinbar einige Pauschalurteile. Was als positiv (negativ) für die Umwelt wahrgenommen wird, wird auch als positiv (negativ) für die Welternährung eingestuft. Dies betrifft z.B. die Einschätzung der Rolle des Ökolandbaus, chemischer Inputs und der Gentechnik. Eine stärkere Bewusstseinsbildung für das Thema Welternährung mit seinen Herausforderungen und ein schrittweiser Abbau von Vorurteilen erfordern verbesserte öffentliche Kommunikation.
    Keywords: Food security, hunger, environment, Consumer/Household Economics, Food Security and Poverty, Teaching/Communication/Extension/Profession, D12, Q01, Q02, Q56,
    Date: 2012–11

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