nep-mkt New Economics Papers
on Marketing
Issue of 2015‒02‒11
ten papers chosen by
João Carlos Correia Leitão
Universidade da Beira Interior

  1. Pricing a Package of Services By Ketelaar, Felix; Szalay, Dezso
  2. Price dispersion and station heterogeneity on German retail gasoline markets By Haucap, Justus; Heimeshoff, Ulrich; Siekmann, Manuel
  3. Price Comparison Websites By Ronayne, David
  4. Product Line Design By Anderson, Simon P; Celik, Levent
  5. Can Willingness-To-Pay Values be Manipulated? Evidences from an Experiment on Organic Food in China By Xiaohua, Yu; Binjian, Yan; Zhifeng, Gao
  6. Emergency purchasing situations: implications for consumer decision-making By Alain Samson; Benjamin G. Voyer
  7. Agricultural marketing cooperatives with direct selling : A cooperative non cooperative game By Maxime Agbo; Damien Rousselière; Julien Salanié
  8. The importance of traceability in certification the quality of animal products By Iurchevici, Lidia; Chetroiu, Rodica
  9. The forecasting power of consumer attitudes for consumer spending By Barnes, Michelle L.; Olivei, Giovanni P.
  10. Nonlinear Pricing with Finite Information By Dirk Bergemann; Ji Shen; Yun Xu; Edmund M. Yeh

  1. By: Ketelaar, Felix; Szalay, Dezso
    Abstract: We study a tractable two-dimensional model of price discrimination. Consumers combine a rigid with a more flexible choice, such as choosing the location of a house and its quality or size. We show that the optimal pricing scheme involves no bundling if consumer types are affiliated. Conversely, if consumer types are negatively affiliated over some portion of types then some bundling occurs.
    Keywords: Bundling; Monopoly; Multidimensional screening; Price discrimination
    JEL: D42 D82 D86
    Date: 2014–12
  2. By: Haucap, Justus; Heimeshoff, Ulrich; Siekmann, Manuel
    Abstract: Price levels and movements on gasoline and diesel markets are heavily debated among consumers, policy-makers, and competition authorities alike. In this paper, we empirically investigate how and why price levels differ across gasoline stations in Germany, using eight months of data from a novel panel data set including price quotes from virtually all German stations. Our analysis specifically explores the role of station heterogeneity in explaining price differences across gasoline stations. Key determinants of price levels across fuel types are found to be ex-refinery prices as key input costs, a station's location on roads or highway service areas, and brand recognition. A lower number of station-specific services implies lower fuel price levels, so does a more heterogeneous local competitive environment.
    Keywords: Gasoline Pricing,Price Dispersion,Fuel Prices,Gasoline Stations
    JEL: L11 L71
    Date: 2015
  3. By: Ronayne, David (Department of Economics, University of Warwick)
    Abstract: Price comparison websites are commonly thought to benefit consumers by increasing competitive pressure between firms, in turn lowering prices faced by consumers. This article investigates the impact of the introduction of a PCW or ‘web aggregator’ to the market for a homogeneous good. We find that the introduction of a PCW increases prices, harming consumers. Under competing aggregators, consumer welfare does not improve when consumers check only one, and is only guaranteed to improve when they check all of them. Furthermore, when consumers do not check all, increasing the number of aggregators can increase prices. All equilibria feature price dispersion. Key words: JEL classification:
    Date: 2015
  4. By: Anderson, Simon P; Celik, Levent
    Abstract: We characterize the product line choice and pricing of a monopolist as the upper envelope of net marginal revenue curves to the individual product demand functions. The equilibrium product varieties to include in a product line are those yielding the highest upper envelope. In a central case (corresponding to a generalized vertical differentiation framework), the equilibrium range of varieties is exactly the same as the first-best socially optimal range. These upper envelope and first-best optimal range findings extend to a symmetric Cournot oligopoly as well.
    Keywords: Cournot multi-product competition; product differentiation; product line design; product line pricing; second-degree price discrimination
    JEL: L12 L13 L15
    Date: 2014–12
  5. By: Xiaohua, Yu; Binjian, Yan; Zhifeng, Gao
    Abstract: Human behaviours are driven by two different types of motives: implicit and explicit motives. Psychologists have developed two main tools, namely time pressure and cognitive load, to disentangle the two motives. It implies that the values of willingness to pay (WTP) are sensitive to time pressure and cognitive load levels in practice. An experiment with 233 students is conducted in China to study the willingness to pay for organic food with consideration of different time pressures and cognitive load levels. Results show that (1) increasing cognitive load could significantly reduce consumers’ WTP for organic food; and (2) time pressure does not have significant impact on WTP values. Such results remind us of being particularly cautious about the cognitive load situations of respondents during a WTP survey. Otherwise, the WTP results are unstable and inconvincible.
    Keywords: Motives, Time Pressure, Cognitive Load, WTP, Organic Food, Experiments, Agribusiness, Consumer/Household Economics, Institutional and Behavioral Economics, Marketing, Research Methods/ Statistical Methods, C91, Q13,
    Date: 2014–05
  6. By: Alain Samson; Benjamin G. Voyer
    Abstract: This article introduces the Emergency Purchasing Situation (EPS) as a distinct buying context. EPSs stem from an unexpected event (unanticipated need or timing of a need), as well as high product importance, which are associated with a short time frame for consumer decision-making. Our conceptual review integrates largely disconnected strands of research and theories relevant to EPSs and offers a series of independent propositions to understand how these situations might affect consumer decision-making, specifically heuristic versus reflective information processing in product evaluation. We discuss changes induced by the buying context in terms of regulatory focus, perceived time pressure, and stress. Our propositions further account for purchase involvement in the form of product importance, purchase risk, and product substitutability. Finally, we consider how individual differences (expertise and trust) may affect evaluation processes. Our discussion reflects on the implications of our model, avenues for future research, and how an understanding of EPSs can be used to improve managerial practice.
    Keywords: consumer behaviour; decision-making; emergency buying; dual-process; product evaluation; dual system; heuristics; information processing; regulatory focus; stress; time pressure; purchase involvement
    JEL: D11 D80 M30 Y80
    Date: 2014–10
  7. By: Maxime Agbo (African School of Economics, Abomey-Calavi, Benin); Damien Rousselière (AGROCAMPUS OUEST, Departement of Economics, Management and Society, Angers, France, UMR GRANEM, Angers, France); Julien Salanié (Université de Lyon, Lyon, F-69007, France ; CNRS, GATE Lyon St Etienne,F-69130 Ecully, France, Université Jean Monnet, Saint-Etienne, F-42000, France)
    Abstract: We build a theoretical model to study a market structure of a marketing cooperative with direct selling, in which many farmers are members of an agricultural marketing cooperative. They can sell their production either to the cooperative or on an oligopolistic local market. We show that the decision to sell to the cooperative induces an anti-competitive effect on the direct selling market. The cooperative facilitates collusion on the local market by making farmers softer competitors on that market. Conversely, direct selling may create a "healthy emulation" among farmers, leading to more production benefiting the cooperative.
    Keywords: marketing cooperative, direct selling, local market, competition
    JEL: D43 L11 Q13
    Date: 2014
  8. By: Iurchevici, Lidia; Chetroiu, Rodica
    Abstract: Traceability in Productis system is an innovative approach to verify the origin of food, which will have a significant impact both on final consumers, legislators and producers from the food industry, involving large cost savings. With a food traceability system according to HACCP/ISO 22000, it can intervene and recall from market at any time, precise on lot and batch, entirely and from every point of sale, the product that of a reason or other requests this thing. The traceability is seen as a way of ensuring the control, quality and efficiency.
    Keywords: traceability, food safety, consumers
    JEL: L15 P49 Q18
    Date: 2014–11–20
  9. By: Barnes, Michelle L. (Federal Reserve Bank of Boston); Olivei, Giovanni P. (Federal Reserve Bank of Boston)
    Abstract: The widely studied Reuters/Michigan Index of Consumer Sentiment is constructed from the answers to five questions from the more comprehensive Reuters/Michigan Surveys of Consumers. Yet little work has been done on what predictive power the information taken from this more thorough compilation of consumer attitudes and expectations may have for forecasting consumption expenditures. The authors construct a limited set of real-time summary measures for 42 questions selected from these broader Surveys corresponding to three broad economic determinants of consumption—income and wealth, prices, and interest rates, and then use regression analysis to evaluate and test the ability of these summary measures to predict future changes in real consumer expenditures, even when controlling for current and future fundamentals. They explain a nontrivial portion of consumption and other real activity forecast errors from professional forecasts. This is consistent with these measures' ability to predict consumption even when conditioning on a broader set of fundamentals as well as professional forecasters' judgmental forecast adjustments.
    JEL: E21 E27 E52 E66
    Date: 2014–10–30
  10. By: Dirk Bergemann (Cowles Foundation, Yale University); Ji Shen (Dept. of Finance, London School of Economics); Yun Xu (Dept. of Electrical Engineering, Yale University); Edmund M. Yeh (Dept. of Computer Science and Electrical Engineering, Northeastern University)
    Abstract: We analyze nonlinear pricing with finite information. A seller offers a menu to a continuum of buyers with a continuum of possible valuations. The menu is limited to offering a finite number of choices representing a finite communication capacity between buyer and seller. We identify necessary conditions that the optimal finite menu must satisfy, either for the socially efficient or for the revenue-maximizing mechanism. These conditions require that information be bundled, or "quantized" optimally. We show that the loss resulting from using the n-item menu converges to zero at a rate proportional to 1 = n^2. We extend our model to a multi-product environment where each buyer has preferences over a d dimensional variety of goods. The seller is limited to offering a finite number n of d-dimensional choices. By using repeated scalar quantization, we show that the losses resulting from using the d-dimensional n-class menu converge to zero at a rate proportional to d = n^{2/d}. We introduce vector quantization and establish that the losses due to finite menus are significantly reduced by offering optimally chosen bundles.
    Keywords: Mechanism design, Nonlinear pricing, Multi-Dimension, Multi-product, Private information, Limited information, Quantization, Information theory
    JEL: C72 C73 D43 D83
    Date: 2015–01

This nep-mkt issue is ©2015 by João Carlos Correia Leitão. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.