|
on Marketing |
|
Issue of 2014‒08‒09
seven papers chosen by Joao Carlos Correia Leitao Universidade da Beira Interior and Universidade de Lisboa |
| By: | Mitsukuni Nishida (The Johns Hopkins Carey Business School); Marc Remer (Economic Analysis Group, U.S. Department of Justice) |
| Abstract: | Information frictions play a key role in a wide array of economic environments and are frequently incorporated into formal models as search costs. Yet, as search costs are typically unobserved, little empirical work investigates the determinants of the distribution of consumer search costs and the implications for policy. This paper explores the sources of heterogeneity in consumer search costs and how this heterogeneity and market structure shape firms' equilibrium pricing and consumers' search behavior in retail gasoline markets. We estimate the distribution of consumer search costs using price data for a large number of geographically isolated markets across the United States. The results demonstrate that the distribution of consumer search costs varies significantly across geographic markets and that market and population characteristics, such as household income, explain some of the variation. Policy counterfactuals suggest that the shape of the consumer search cost distribution has important implications for both government policy and firms' strategic pricing behavior. The experiments reveal that (1) the search cost distribution needs to be sufficiently heterogeneous to generate equilibrium price dispersion, and (2) the market-level expected price paid decreases in the number of firms, but consumers with high search costs may be worse off from an increased number of firms. |
| Date: | 2014–07 |
| URL: | http://d.repec.org/n?u=RePEc:doj:eagpap:201402&r=all |
| By: | Lola Hernandez; Nicole Jonker; Anneke Kosse |
| Abstract: | Due to the financial crisis, an increasing number of households face financial problems. This may lead to an increasing need for monitoring spending and budgets. We demonstrate that both cash and the debit card are perceived as helpful in this respect. We show that, on average, consumers responsible for the financial decision making within a household find the debit card more useful for monitoring their household finances than cash. Individuals differ in major respects, however. In particular, low earners and the liquidity-constrained prefer cash as a monitoring and budgeting tool. Finally, we present evidence that at an aggregated level, such preferences strongly affect consumer payment behaviour. We suggest that the substitution of cash by cards may slow down because of the financial crisis. Also, we show that cash still brings benefits that electronic alternatives have been unable to match. This suggests that inclusion of enhanced budgeting and monitoring features in electronic payment instruments may encourage consumers to use them more frequently. |
| Keywords: | payment surveys; cash; debit card; consumer choice; budgeting; financial distress; self-control |
| JEL: | C81 D12 D14 E41 G21 |
| Date: | 2014–07 |
| URL: | http://d.repec.org/n?u=RePEc:dnb:dnbwpp:429&r=all |
| By: | Rahmat, Abdul Khabir; Faisol, Nasruddin |
| Abstract: | The purpose of the study is to explore on the elements of outsourced logistics service quality and how the users’ satisfaction was formed within the Malaysian culture context. This qualitative study was based on five semi-structured interviews which were carried out with the executive officers and department managers of four logistics providers firms and one manufacturer. The data were analyzed using thematic analysis method. Rather than the organization’s performance-related factors, the results revealed that, within the Malaysian national culture context, there are influence of the cultural element towards customer satisfaction. There are four (4) logistics service quality elements identified include timeliness, task accuracy and the condition of the product, and the quality of key contact personnel. There are eight (8) other elements leading to satisfaction which is not within the original logistics service quality theory. They include efficient, consistent service, responsiveness, ensuring customers’ reputation, sensitive to other people feelings, taking blame to ensure satisfaction, emotional closeness between personnel and the family as a base of identity. The emerging elements provides the key insights on the elements which lead to satisfaction in the context of Malaysian logistics service users. Rather than the organization’s performance-related factors, the results revealed that, within the Malaysian national culture context, there are influence of the cultural element towards customer satisfaction. |
| Keywords: | Logistics Service Quality, Collectivist Society, Customer Satisfaction, Third Party Logistics, Manufacturing, Malaysia |
| JEL: | L80 L84 L9 L91 |
| Date: | 2014–07–08 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:57364&r=all |
| By: | Philippe Choné (CREST-LEI); Laurent Linnemer (CREST-LEI) |
| Abstract: | We study the exclusionary properties of nonlinear price-quantity schedules in an Aghion-Bolton style model with elastic demand and product differentiation. We distinguish three regimes depending on whether and how the price of the incumbent good is linked to the quantity purchased from the rival firm. We find that the supply of rival good is distorted downwards. Moreover, given the quantity supplied from the rival, the buyer may opportunistically purchase inefficiently many units from the incumbent to pocket quantity rebates. We show that the possibility for the buyer to dispose of unconsumed units attenuates the opportunism problem and limits the exclusionary effects of nonlinear pricing. |
| Keywords: | Inefficient exclusion; buyer opportunism; disposal costs; quantity rebates; incomplete information |
| JEL: | L12 L42 D82 D86 |
| Date: | 2014–06 |
| URL: | http://d.repec.org/n?u=RePEc:crs:wpaper:2014-16&r=all |
| By: | Bergantino, Angela Stefania; Capozza, Claudia |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:sit:wpaper:14_01&r=all |
| By: | Joanne W. Hsu; David A. Matsa; Brian T. Melzer |
| Abstract: | This paper studies the impact of unemployment insurance (UI) on consumer credit markets. Exploiting heterogeneity in UI generosity across U.S. states and over time, we find that UI helps the unemployed avoid defaulting on their mortgage debt. We estimate that UI expansions during the Great Recession prevented about 1.4 million foreclosures. Lenders respond to this decline in default risk by expanding credit access and reducing interest rates for low-income households at risk of being laid off. Our findings call attention to two benefits of unemployment insurance not previously highlighted: reducing deadweight losses from loan default and expanding access to credit. |
| JEL: | D14 G21 H31 R28 |
| Date: | 2014–07 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:20353&r=all |
| By: | Philippe Choné (CREST-LEI); Laurent Linnemer (CREST-LEI) |
| Abstract: | We adapt the exclusion model of Choné and Linnemer (2014) to reflect the notion that dominant firms are unavoidable trading partners. In particular, we introduce the share of the buyer’s demand that can be addressed by the rival as a new dimension of uncertainty. Nonlinear price-quantity schedules allow the dominant firm to adjust the competitive pressure placed on the rival to the size of the contestable demand, and to distort the rival supply at both the extensive and intensive margins. When disposal costs are sufficiently large, this adjustment may yield highly nonlinear and locally decreasing schedules, such as “retroactive rebates”. |
| Keywords: | Inefficient exclusion; buyer opportunism; disposal costs; quantity rebates; incomplete information. |
| JEL: | L12 L42 D82 D86 |
| Date: | 2014–06 |
| URL: | http://d.repec.org/n?u=RePEc:crs:wpaper:2014-17&r=all |