nep-mkt New Economics Papers
on Marketing
Issue of 2014‒08‒28
five papers chosen by
João Carlos Correia Leitão
Universidade da Beira Interior

  1. Search and Ripoff Externalities By Armstrong, Mark
  2. Do expert reviews really drive demand? Evidence from a German car magazine By Dewenter, Ralf; Heimeshoff, Ulrich
  3. Effects of product and supplier criticality on resilience capabilities: An empirical analysis of a global supply chain By Sarker, Sudipa; Engwall, Mats; Trucco, Paolo; Feldmann, Andreas
  4. Public and private investments in innovation capabilities : structural transformation in the Chilean wine industry By Dutz, Mark A.; O'Connell, Stephen D.; Troncoso, Javier L.
  5. The Market for Paintings in Paris between Rococò and Romanticism By Federico Etro; Elena Stepanova

  1. By: Armstrong, Mark
    Abstract: This paper surveys models of markets in which some consumers are "savvy" while others are not. We discuss when the presence of savvy consumers improves the deals available to non-savvy consumers in the market (the case of search externalities), and when the non-savvy fund generous deals for savvy consumers (ripoff externalities). We also discuss when the two groups of consumers have aligned or divergent views about market interventions. The analysis covers two overlapping families of models: those which examine markets with price/quality dispersion, and those which exhibit forms of consumer hold-up.
    Keywords: Consumer protection, consumer search, price dispersion, hold-up, add-on pricing.
    JEL: D03 D18 D8 L13 M3
    Date: 2014–07
  2. By: Dewenter, Ralf; Heimeshoff, Ulrich
    Abstract: A wide range of media provide information on many products based on reviews or expert opinions. A natural question is, whether these reviews and expert opinions have any effect on sales. A small but growing literature in economics and marketing science deals with this issue, by testing the relevance of such product information for goods such as financial instruments, wine, books and movies. However, most of these products have in common that quality is very difficult to measure. It is always also a matter of taste whether these products can be seen as high or low quality goods. Based on a unique dataset, we test whether test scores published in a major German car magazine have significant impact on registrations of new cars in Germany. We find that test scores for certain cars have statistically significant impact on the number of new cars sold by several leading manufacturers on the German car market. --
    Keywords: Car magazines,Test Scores,Demand
    JEL: L15 L82
    Date: 2014
  3. By: Sarker, Sudipa (KTH Royal Institute of Technology, & Politecnico di Milano); Engwall, Mats (Department of Industrial Economics and Management, Royal Institute of Technology, Stockholm); Trucco, Paolo (Politecnico di Milano); Feldmann, Andreas (Department of Industrial Economics and Management, Royal Institute of Technology, Stockholm)
    Abstract: From resilience perspective, it is important for supply chains to have multiple suppliers in order to maintain a high level of operational performance. On the contrary, keeping multiple suppliers are expensive from purchasing perspective, because, large amount of internal resources are required to maintain numerous suppliers. Moreover, some products may only have a sole source of supply. Against the backdrop, it is important for supply chains to understand, how, different products and supplier compositions affect different resilience capabilities. Hence, drawing from the literature of supply chain resilience, first, conceptual linkages among product criticality, supplier criticality and resilience capabilities are derived. Second, data from four plants of a global manufacturing organization with different supplier and product compositions are collected. Finally, hypothesized relationships are tested by using parametric statistical tests. The empirical data indicate that product and supplier criticality affect different capabilities of supply chain resilience. Theoretical contribution of this research is the conceptual model that is derived from synthesizing the existing literature of supply chain resilience. Practical contribution is the enhanced understanding of the effects of product and supply criticality on different resilience capabilities.
    Keywords: Supply Chain Resilience; Supply Disruption; Business Impact; Time to Recovery; Empirical Study
    JEL: L14 L23
    Date: 2014–08–06
  4. By: Dutz, Mark A.; O'Connell, Stephen D.; Troncoso, Javier L.
    Abstract: This paper assembles novel data on the Chilean wine industry to investigate the role of investments in knowledge capital on sales growth in domestic and international markets. The study uses archival data collected from the Government of Chile to compile and categorize public expenditures and programs supporting the Chilean wine industry over the period of 1990-2012 into investment in different types of knowledge capital. These spending categories are related to industry-level sales growth. The paper finds that the most important correlate is spending on research and development. The study also uses data from a new survey of Chilean wine firms to capture information on firm-specific investments in knowledge capital. The findings show that investments in collaboration capital, in particular hiring foreign consultants, as well as participation in international wine fairs are the strongest correlates of growth in export sales, while spending on aspects of branding (local advertising and brand design) are the strongest correlates of domestic market sales growth.
    Keywords: Investment and Investment Climate,E-Business,ICT Policy and Strategies,Markets and Market Access,Economic Theory&Research
    Date: 2014–07–01
  5. By: Federico Etro (Department of Economics, University Of Venice Cà Foscari); Elena Stepanova (Sant’Anna School of Advanced Studies, Pisa)
    Abstract: We analyze organization of auctions and bidding strategies with a unique dataset on Paris auctions between 700s and 800s. Prices reflect the objective features of the paintings and of the sale, and they reveal a substantial death effect, with upward jumps in the years after the death of the artists. Both the hedonic and repeated sale price indexes show a declining pattern for the relative price of paintings starting with the French Revolution. On this basis we analyze the emerging role and market power of art dealers and employ network theory to study whether they created rings to manipulate the outcome of the auctions for their profits. Dealers appear to have been divided into four main communities heavily trading between themselves and we find evidence of collusive behavior with lower hammer prices for buyers belonging to the same community of the dealers organizing the auction.
    Keywords: Art market, Hedonic prices, Repeated sales price index, Network theory.
    JEL: Z11 N0 D4
    Date: 2014

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