nep-mkt New Economics Papers
on Marketing
Issue of 2013‒11‒02
six papers chosen by
Joao Carlos Correia Leitao
Universidade da Beira Interior and Universidade de Lisboa

  1. Selling Cookies By Bergemann, Dirk; Alessandro Bonatti
  2. Can Fat Taxes and Package Size Restrictions Stimulate Healthy Food Choices? By E. HUYGHE; A. VAN KERCKHOVE
  4. The Mainstream Niche By Renaud Foucart
  5. The opportunism problem revisited: The case of retailer sales effort By Staahl Gabrielsen, Tommy; Johansen, Bjørn Olav
  6. Cooperation vs. Collusion: How Essentiality Shapes Co-opetition By Rey, Patrick; Tirole, Jean

  1. By: Bergemann, Dirk (Cowles Foundation, Yale University); Alessandro Bonatti (Sloan School of Management, MIT)
    Abstract: We develop a model of data pricing and targeted advertising. A monopolistic data provider determines the price to access "cookies," i.e., informative signals about individual consumers' preferences. The demand for information is generated by advertisers who seek to tailor their spending to the value of each consumer. We characterize the set of consumers targeted by the advertisers and the optimal monopoly price of cookies. The ability to influence the composition of the set of targeted consumers provides incentives to lower prices. Thus, the monopoly price of data is decreasing in the reach of the database and increasing in the number of competing sellers of exclusive data. Finally, we explore the implications of nonlinear pricing of information and characterize the exclusive data sales that emerge as part of the optimal mechanism.
    Keywords: Data providers, Information sales, Targeting, Online advertising, Media markets
    JEL: D44 D82 D83
    Date: 2013–10
    Abstract: Consumers prefer bonus packs, as opposed to price discounts, for healthy foods, but they want a price discount rather than a bonus pack for indulgent foods (Mishra & Mishra, 2011). This study conceptually replicates and extends this finding to show that consumers are more responsive to changes in price than to changes in package size for indulgent food options, whereas they are more responsive to changes in package size than to changes in price for healthy food options.
    Keywords: sales promotion, packaging, price, food, vice, virtue
    Date: 2013–08
  3. By: Michael Kopel (Department of Organization and Economics of Institutions, University of Graz, Graz); Marco Marini (Department of Computer, Control and Management Engineering, Università "La Sapienza" Roma)
    Abstract: The main aim of this paper is to study the propensity of consumer cooperatives (Coops) to use incentive schemes in situations of strategic interaction with profit-maximizing …rms (PMFs). Our model provides a reason why Coops are less prone than PMFs to pay variable bonuses to their managers. We show that this occurs under price competition when in equilibrium the Coop prefers to pay a at wage to its manager relying instead on her intrinsic motivation, whereas the pro…t-maximizing rival adopts a variable, high- powered incentive scheme. The main rationale is that, by recruiting a manager whose preferences are aligned with the company goals (e.g., a consumer-owner), the Coop is per se highly expansionary in term of output. Therefore, the Coop does not need to rely on an externally hired manager who sets prices aggressively to expand market share and quantity. Furthermore, adopting a monetary reward based on sales and pro…ts leads to distorted incentives with respect to the Coops goal, which after all is the welfare of its members.
    Keywords: Consumer Cooperatives, Strategic Incentives, Price Competition, Oligopoly.
    JEL: C70 C71 D23 D43
    Date: 2013
  4. By: Renaud Foucart
    Abstract: Consumption in the time of Internet is characterized by extremely low search costs, leading to increased product diversity (the long tail) and large mainstream products (superstars).� In this paper, I show how the mainstream taste can be catered by a niche product, while minority tastes can be mainstream.� A competitive market with arbitrarily small search costs supplies a product design corresponding to the mainstream taste at a price that only mainstream buyers are willing to pay.� Products corresponding to the taste of the minority are offered at lower price, and bought by several types of buyers.
    Keywords: Search, matching, horizontal product diversity
    JEL: C7 D8 L11
    Date: 2013–07–26
  5. By: Staahl Gabrielsen, Tommy (University of Bergen); Johansen, Bjørn Olav (University of Bergen)
    Abstract: We study a setting where the opportunism or commitment problem identifed by Hart and Tirole (1990) may arise. An upstream monopolist may sell its product to two differentiated downstream retailers. Contract unobservability induces the manufacturer and each retailer to free-ride on margins earned by rival retailers, resulting in low transfer prices and low overall profit. O'Brien and Shaffer (1992) proposed a solution to this problem involving squeezing retail margins by using maximum RPM and high transfer prices. We show that when retail demand depends in any degree of retail sales effort, this equilibrium breaks down, and the opportunism problem reappears with full force. We show that no type of own-sale contracts or combination of own-sale restraints will solve the problem if sales effort matter. Moreover we show that certain horizontal commitments, as for example industrywide minimum RPM, may restore the fully integrated outcome, but only in special cases.
    Keywords: Opportunism; RPM; sales effort
    JEL: L12 L14 L42
    Date: 2013–10–18
  6. By: Rey, Patrick; Tirole, Jean
    Abstract: The paper makes two related contributions. First, and in contrast with the rich body of literature on collusion with (mainly perfect) substitutes, it derives general results on the sustainability of tacit coordination for a class of nested demand functions that allows for the full range between perfect substitutes and perfect complements. Second, it studies the desirability of joint marketing alliances, an alternative to mergers. It shows that a combination of two informationfree regulatory requirements, mandated unbundling by the joint marketing entity and unfettered independent marketing by the firms, makes joint-marketing alliances always socially desirable, whether tacit coordination is feasible or not.
    Keywords: tacit collusion, cooperation, substitutes and complements, essentiality, joint marketing agreements, patent pools, independent licensing, unbundling, co-opetition.
    JEL: D43 L24 L41 O34
    Date: 2013–10–23

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