nep-mkt New Economics Papers
on Marketing
Issue of 2015‒01‒14
five papers chosen by
João Carlos Correia Leitão
Universidade da Beira Interior

  1. Dynamic Voluntary Advertising under Partial Market Coverage By Yohei Tenryu; Keita Kamei
  2. Best Prices: Price Discrimination and Consumer Substitution By Judith A. Chevalier; Anil K Kashyap
  3. STRATEGIC MARKETING OF TOURIST DESTINATION By Marko Gasiæ, Vladan Ivanoviæ, Marija Stojiljkoviæ
  4. The Determinants of Equity Transmission Between the New and Used Car Markets – A Hedonic Analysis By Alexander Kihm; Colin Vance
  5. Measuring Consumer Valuation of Limited Provider Networks By Keith Marzilli Ericson; Amanda Starc

  1. By: Yohei Tenryu (Graduate School of Economics, Osaka University); Keita Kamei (Graduate School of Economics, Kyoto University)
    Abstract: We consider a dynamic voluntary advertising model with a duopoly. Firms can use advertising and price as competitive tools where product quality is a given and the market is not fully covered by consumers. Advertising also plays a role as a public good. In this situation, we investigate how advertising, profits, and welfare respond to changes in consumer preference and product quality. We mainly find that a higher maximum preference value leads to increases in advertising, profits, and consumer surplus but a decrease in incumbent consumers’ utility. We further find that a technology improvement by a low-quality firm increase its profit and consumer surplus if the technology gap is relatively large but if this is not the case, then the innovation could have different effects on firms’ profits and consumer surplus.
    Keywords: Advertising, product quality, differential games, duopoly
    JEL: C72 C73 L13 M37
    Date: 2014–12
  2. By: Judith A. Chevalier; Anil K Kashyap
    Abstract: We propose a method for constructing price indices when retailers use periodic sales to price-discriminate amongst heterogeneous customers. To do so, we introduce a model in which Loyal customers buy one brand and do not strategically time purchases, while Bargain Hunters always pay the lowest price available, the "best price". We derive the ideal price index and demonstrate empirically that accounting for our best price construct substantially improves the match between conventional price indices and actual prices paid by consumers. We demonstrate that our methodology improves inflation measurement without imposing an unrealistically large burden on the data-collection agency.
    JEL: C43 D11 D12 D4 L81
    Date: 2014–12
  3. By: Marko Gasiæ, Vladan Ivanoviæ, Marija Stojiljkoviæ (BUSINESS SCHOOL OF APPLIED STUDIES - BLACE, Serbia)
    Abstract: In a dynamic tourism industry, the tourism market which is becoming increasingly competitive, business success of one destination directly depends upon in advance programmed objectives and ways of their implementation. Turbulent changes, tendencies and trends in the part of tourism demand and on the side of the tourism supply, as well, greatly affect business behavior and response to the tourist destination and thus require strategic marketing. However, the strategic marketing process is very complex and for its successful implementation is necessary to ensure the unity of the participants, because if it’s not provided marketing strategies won’t be properly implemented which will result in reduction of the competitiveness of tourist, profits, etc.
    Keywords: strategic marketing, market trends, marketing mix, analysis.
    JEL: M31 L83
    Date: 2014–09
  4. By: Alexander Kihm; Colin Vance
    Abstract: Drawing on a data set containing 371,082 observations on new and used cars from 2008, this study employs a hedonic model to estimate the determinants of prices in the primary and secondary car markets in Germany. We are specifically interested in identifying those vehicle attributes that are responsible for retaining the car’s value in the used car market. Beyond parameterizing the influence of technical features and brand name on the retail price, our model simultaneously generates a corresponding set of parameter estimates for the used car price, thereby allowing us to formally compare their magnitudes across the two markets. This comparison reveals that fuel consumption, in particular, is an important determinant of the price, one whose impact is higher in magnitude in the used car market than in the new car market. Large heterogeneity in how cars hold their investment value is also seen to depend on body type and brand/model name.
    Keywords: Retail prices; used car prices; hedonic model; Germany
    JEL: M31 R41
    Date: 2014–12
  5. By: Keith Marzilli Ericson; Amanda Starc
    Abstract: We measure provider coverage networks for plans on the Massachusetts health insurance exchange using a two measures: consumer surplus from a hospital demand system and the fraction of population hospital admissions that would be covered by the network. The two measures are highly correlated, and show a wide range of networks available to consumers. We then estimate consumer willingness-to-pay for network breadth, which varies by age. 60-year-olds value the broadest network approximately $1200-1400/year more than the narrowest network, while 30-year-olds value it about half as much. Consumers place additional value on star hospitals, and there is significant geographic heterogeneity in the value of network breadth.
    JEL: I10 I11 I13 L14
    Date: 2014–12

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