nep-mkt New Economics Papers
on Marketing
Issue of 2013‒11‒16
eight papers chosen by
Joao Carlos Correia Leitao
Universidade da Beira Interior and Universidade de Lisboa

  1. Network Neutrality, Access to Content and Online Advertising By Antonio Russo; Anna D’Annunzio
  2. Competition in Posted Prices With Stochastic Discounts By David Gill; John Thanassoulis
  3. The Effect of Advertising and In-Store Promotion on the Demand for Chocolate By Jason C. Patalinghug
  4. Cooperation vs. Collusion: How Essentiality Shapes Co-opetition By Rey, Patrick; Tirole, Jean
  5. Why Should Business Education Care About Care? Toward an Educare Perspective By André, Kévin
  6. Are commercial ceilings adequate for the regulation of commercial overload on free-to-air TV channels? By Julia Rothbauer; Gernot Sieg
  7. Production and Marketing of Vegetables among smallholders in Ethiopia: The case of Lume district of Ethiopia By Gebreselassie, Samuel
  8. Press advertising and the ascent of the `Pensée Unique' By GABSZEWICZ, Jean J.; LAUSSEL, Didier; SONNAC, Nathalie

  1. By: Antonio Russo (KOF Swiss Economic Institute, ETH Zurich, Switzerland); Anna D’Annunzio (Sapienza University of Rome, Italy)
    Abstract: We investigate the implications of Network Neutrality regulation for Internet fragmentation. We model a two-sided market, where Content Providers (CPs) and consumers interact through Internet Service Providers (ISPs) and CPs sell consumers’ attention to advertisers. Under Network Neutrality, CPs can have their traffic delivered to consumers by ISPs for free, while in the Unregulated Regime they have to pay a (non-discriminatory) termination fee. In our model multiple impressions of an ad on a consumer are partially wasteful. Thus, equilibrium ad rates decrease when the audiences of CPs overlap. We show that universal distribution of content is always an equilibrium when Network Neutrality regulation is in place. In contrast, when competition among CPs strongly reduces their profits, in the Unregulated Regime ISPs can use termination fees to induce fragmentation and extract CPs’ extra profits. This occurs when repeated impressions of an ad rapidly lose value and consumers care for content availability to a relatively small extent. Our results suggest that the Unregulated Regime is never superior to Network Neutrality from a consumer surplus and social welfare point of view.
    Keywords: Network Neutrality, two-sided markets, Internet, advertising, fragmentation
    JEL: L1 D43 L13 L51
    Date: 2013–11
  2. By: David Gill; John Thanassoulis
    Abstract: We study price competition between firms over public list or posted prices when a fraction of consumers (termed 'bargainers') can subsequently receive discounts with some probability.� Such stochastic discounts are a feature of markets in which some consumers bargain explicitly; of markets in which sellers use the marketing practice of couponing; and of markets in which sellers offer both simple-to-understand tariffs (the posted prices) alongside complex or opaque tariffs that might offer a discount.� Even though bargainers receive reductions off the posted prices, the potential to discount dampens competitive pressure in the market by reducing the incentive to undercut a rival's posted price, thus raising all prices and increasing profits.� Welfare falls because of the stochastic nature of the discounts, which generates some misallocation of products to consumers.� We also find that stochastic discounts facilitate collusion by reducing the market share that can be gained from a deviation.
    Keywords: Posted prices, list prices, collusion, bargaining, negotiation, haggling, discounting, coupons, obfuscation, flat rate bias, price takers
    JEL: C78 D43 L13
    Date: 2013–10–30
  3. By: Jason C. Patalinghug (Wesleyan University)
    Abstract: This paper analyzes the effect of TV advertising and in-store displays on the sales of chocolates. I examine which method is more effective in gaining customers and in increasing total sales. Also, I look at the evidence to see whether the lack of advertising by a firm will hurt the industry as a whole. In this essay, I use a nested logit model on scanner data obtained by the Zwick Center for Food and Resource Policy at the University of Connecticut's Department of Agricultural and Resource Economics to examine the effect of TV advertising on chocolate sales. The results show that in-store displays and advertising both help increase the demand for chocolate.
    Keywords: nested logit, scanner data, advertising, in-store promotions
    JEL: D12 L25 L66 M37
    Date: 2013–10
  4. 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
  5. By: André, Kévin (ESSEC Business School)
    Abstract: This article considers the potential contribution of care ethics in business education through the lens of a new perspective, called "educare." This paper will first give a definition of educare as a pedagogical strategy which aims to make all students free to care. We will then look at why the educare strategy is relevant for business ethics education, given the intense challenges it is presently facing. Lastly, we will see how educare could be implemented effectively through service-learning.
    Keywords: Business Education; Business Ethics; Educare – Empathy; Ethic of Care; Service-Learning
    JEL: A13 I21 I23 M14
    Date: 2013–11–12
  6. By: Julia Rothbauer (Institute of Transport Economics, Muenster); Gernot Sieg (Institute of Transport Economics, Muenster)
    Keywords: advertising regulation, content differentiation, welfare
    JEL: L82 M38
    Date: 2013–09
  7. By: Gebreselassie, Samuel
    Abstract: Irrigated vegetable crop production as a viable economic venture helps farmers gain full employment, all year round and generate substantial amount of income. However, the positive prospects of emergence of dynamic and strong commercial horticulture sector among small farmers in the Lume area (as in other parts of the country) depends partly on further support on marketing and improved post-harvest product handling techniques. Specifically, there is a need to develop and improve marketing outlets for producers, and to improve marketing efficiency and competitiveness of existing vegetable markets. Any marketing support to small vegetable producers should focus on identifying and minimizing/neutralizing the factors that help brokers and wholesalers to determine price to their advantage. Any intervention should also be along the whole vale chain as competitiveness of one market depends on the other that precedes or follows it. It is essential to design marketing strategy for increasing market chain competitiveness (both along the whole value chain and in a given market especially where vegetable growers sell the bulk of their vegetable.
    Keywords: Crop Production/Industries, Marketing,
    Date: 2012–11
  8. By: GABSZEWICZ, Jean J.; LAUSSEL, Didier; SONNAC, Nathalie

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