nep-mkt New Economics Papers
on Marketing
Issue of 2014‒03‒15
eight papers chosen by
Joao Carlos Correia Leitao
Universidade da Beira Interior and Universidade de Lisboa

  1. Platform contents By Renault, Régis
  2. Brand influence on consumer preference for environmental labels By Mohamed Akli Achabou
  3. Branding and Collusion in Vertically Differentiated Industries By Garcia, Daniel
  4. An "Image Theory" of RPM By Inderst, Roman; Pfeil, Sebastian
  5. Consumer Cooperatives as a new Governance Form: The Case of the Cooperatives in the Broadband Industry By Bert Sadowski
  6. Got green milk? A field experimental trial of consumer demand for a climate label By Matsdotter, Elina; Elofsson, Katarina; Arntyr, Johan
  7. How the 'made in' can influence the eco-equality assessment of a product: An experimental study on the case of the European Ecolabel By Sihem Dekhili; Mohamed Akli Achabou
  8. Media bias and advertising: Evidence from a German car magazine By Dewenter, Ralf; Heimeshoff, Ulrich

  1. By: Renault, Régis
    Abstract: A monopoly platform hosts advertisers who compete on a market for horizontally differentiated products. These products may be either mass market products that appeal broadly to the entire consumer population or niche products that are tailored to the tastes of some particular group. Consumers search sequentially through ads incurring a surfing cost of moving to the next ad. They may click on an ad at some cost, which provides all relevant information and the opportunity to buy. The platform chooses which information is in an ad and may be observed by consumers before they click. It also selects the level of sur ng costs and click costs and charges a per click ad price. Higher surfing and click costs and more mass market advertising reduces the platform's attractiveness but enhances advertisers' market power. If ads are uninformative, the platform optimally attracts only niche advertising. This is however not feasible if search costs cannot be made su ciently low, in which case both types of products are advertised. The platform benefits from requiring firms to advertise prices, only if it is unable to attract consumers with uninformative ads. The analysis is extended to allow advertising to include product information and allow the platform to provide non advertising content (e.g. entertainment or news).
    Keywords: Internet platforms; Internet; Consumers; Mass markets products; Advertising;
    JEL: L86 L81 M37
    Date: 2014–02
  2. By: Mohamed Akli Achabou
    Abstract: This research explores the relevance of the strategic choice of Nespresso to opt for an environmental self-declaration in a context of increasing scepticism of the consumers to ecolabells, particularly those established by companies. To reach this goal, an empirical study was driven with 134 French consumers. The results of a joint analysis show that the environmental label established by Nespresso is favorably perceived by the consumers and influences positively their preference with the same degree of importance as the Fairtrade independent certification. The consumers seem to rely on the brand and think that it would not take the risk of showing false information at the risk of damaging its reputation. Entreprises. Pour atteindre cet objectif une étude empirique a été conduite auprès de 134 consommateurs français. Les résultats d’une analyse conjointe montrent que l’affichage responsable établi par Nespresso est favorablement perçu par les consommateurs et influence positivement leur préférence avec un même degré d’importance que la certification indépendante Fairtrade. Les consommateurs semblent faire confiance à la marque et pensent qu’elle ne prendrait pas le risque d’afficher de fausses informations au risque de nuire à sa réputation.
    Keywords: eco-certification, brand, consumer preference, conjoint analysis method.
    Date: 2014–02–25
  3. By: Garcia, Daniel
    Abstract: This paper presents a model of collusion in vertically differentiated industries where firms have the option to make their products distinguishable to consumers by attaching a brand. We show that if consumers’ preferences are linear in the quality dimension and their beliefs satisfy a standard refinement, collusion is facilitated in the absence of brands. More precisely, we show that if collusion is feasible with brands it is also feasible without them
    Keywords: Collusion; Branding; Vertical Differentiation
    JEL: D83 L13 L40
    Date: 2014–02–22
  4. By: Inderst, Roman; Pfeil, Sebastian
    Abstract: We show how a brand manufacturer’s control over retail prices can lead to efficiencies when consumers rely on prices as a signal of quality. For this we first show how higher prices can be associated with both higher quality perception as well as higher actual quality. We next identify a conflict of interest between retailers and manufactures. Retailers do not internalize the ensuing reputation spill-over that higher prices have on demand at all outlets. And they have less incentives to support brand image through higher prices as this erodes their own position in negotiations while increasing that of the manufacturer. Our efficiency defence for RPM thus applies even when retailers need not be incentivized to undertake non-contractible activities, as in our model the key opportunism problem, with respect to quality provision, lies between the manufacturer and consumers.
    Keywords: Resale Price Maintenance; Quality Incentives; Quality Image
    JEL: L15 L42
    Date: 2014–01
  5. By: Bert Sadowski
    Abstract: Since Williamson’s semi-final paper (1975) on governance forms in a market economy, a growing number of studies have focused on new forms of governance, but research seems to have neglected consumer cooperatives despite their growing importance in some sectors of the economy. With an increasing emergence of consumer cooperatives in industries such as electricity generation or broadband telecommunications, however, there is a need to study the specific structure and function of consumer cooperatives in the market economy. In the literature, the growth of consumer cooperatives has been attributed to problems of market failure in conjunction with high risk and uncertain investment. In order to examine incentives for consumers to join a consumer cooperative, we make a distinction between different types of risks and benefits. The evolution of broadband markets in the Netherlands provides an interesting example to examine the function and structure of local cooperatives in a dynamic market. In the paper, we analyze the incentives of 759 consumers to opt in favor of setting up of a cooperative aimed at providing broadband services via a fiber network. We found that the risks associated with creating cost-efficiencies and switching cost are important determinants for consumers to join a cooperative. In addition, benefits expected from consumers with respect to user network externalities and indirect gains derived will affect the probability of consumers to join a cooperative.
    Keywords: cooperatives, broadband
    Date: 2014–02
  6. By: Matsdotter, Elina (Department of Economics, Swedish University of Agricultural Sciences); Elofsson, Katarina (Department of Economics, Swedish University of Agricultural Sciences); Arntyr, Johan (Ramböll Sverige AB)
    Abstract: A majority of consumers claim to prefer climate-labelled food over non-labelled alternatives. However, there is limited empirical evidence that such labels actually influence consumer behaviour when shopping. The purpose of this study is to investigate whether qualitative information about a voluntary climate labelling scheme affects the demand for milk in the short run. In a randomized field experiment conducted in 17 retail stores in Sweden, the effects of a climate label on milk demand was measured. Results suggest that climate labelling increased demand for medium-fat climate labelled milk by approximately 7%. The response is significantly smaller than suggested by consumer surveys but larger than that observed in earlier studies of actual purchasing behaviour where quantitative information on climate impact was provided.
    Keywords: Climate labelling; milk; demand; voluntary policy instruments; randomized controlled trial
    JEL: D12 D83 Q18 Q54
    Date: 2014–02–13
  7. By: Sihem Dekhili; Mohamed Akli Achabou
    Abstract: This research explores the country of origin effect on the evaluation of ecolabelled products. Findings from experimentation indicate that the mention of a country of origin with favorable image in terms of sustainable development has a neutral effect on the evaluation of an ecolabelled product. However, the indication of a country with a negative image affects negatively the product’ evaluation.
    Keywords: consumer behaviour; country of origin; european ecolabel; sustainable development
    Date: 2014–02–25
  8. By: Dewenter, Ralf; Heimeshoff, Ulrich
    Abstract: This paper investigates the existence of a possible media bias by analyzing the impact of automobile manufacturer's advertisements on automobile reviews in a leading German car magazine. By accounting for both endogeneity and sample selection using a two-step procedure, we find a positive impact of advertising volumes on test scores. The main advantage of our study is the measurement of technical characteristics of cars to explain test scores. Due to this kind of measurement, we avoid serious biases in estimating media bias caused by omitted variables. --
    Keywords: Car magazines,Media bias,Selection model,Instrumental variable estimation
    JEL: L15 L82
    Date: 2014

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