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on Marketing |
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Issue of 2015‒12‒28
eighteen papers chosen by João Carlos Correia Leitão Universidade da Beira Interior |
| By: | Luis Aguiar (European Commission - JRC - IPTS) |
| Abstract: | Interactive music streaming services have grown tremendously in recent years, raising questions about their eects on digital music sales and piracy. While often overlooked in practice, theoretical considerations suggest that these eects may differ according to the streaming services' functionality. Premium subscriptions, for instance, oer consumers unlimited and unconstrained access to music, providing little incentives to acquire digital music through alternative channels of consumption. On the other hand, free and advertisement-supported services provide consumers with very limited mobility in their usage. If music streaming allows for the discovery of new products, and if consumers value mobility, then free streaming services may well stimulate the use of channels that oer the possibility of mobile consumption. We rely on individual-level clickstream data on a representative sample of 5,000 French Internet users to study the question of how free music streaming aects music purchasing and piracy behavior. We exploit the introduction of a listening cap by the French streaming platform Deezer in June 2011 to identify this causal eect in a dierence-in-dierences setting. Our results show that free streaming services stimulate alternative channels of music consumption that oer mobility. We nd that users of Deezer's free streaming services visited licensed downloading websites up to 2.9% less than they would have had the restriction not been introduced. Similarly, they decrease their visits to unlicensed downloading websites by as much as 2%. Our ndings are indicative of online music streaming serving as an information channel for the discovery of new products, and our analysis serves as a rst step toward understanding the heterogeneity of eects that streaming platforms may have on the rapidly changing recorded music industry. |
| Keywords: | Music Streaming, Music Industry, Copyright |
| JEL: | K42 L82 O34 O38 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:ipt:decwpa:2015-16&r=mkt |
| By: | Zack Cooper; Stuart V. Craig; Martin Gaynor; John Van Reenen |
| Abstract: | We use insurance claims data for 27.6 percent of individuals with private employer-sponsored insurance in the US between 2007 and 2011 to examine the variation in health spending and in hospitals’ transaction prices. We document the variation in hospital prices within and across geographic areas, examine how hospital prices influence the variation in health spending on the privately insured, and analyze the factors associated with hospital price variation. Four key findings emerge. First, health care spending per privately insured beneficiary varies by a factor of three across the 306 Hospital Referral Regions (HRRs) in the US. Moreover, the correlation between total spending per privately insured beneficiary and total spending per Medicare beneficiary across HRRs is only 0.14. Second, variation in providers’ transaction prices across HRRs is the primary driver of spending variation for the privately insured, whereas variation in the quantity of care provided across HRRs is the primary driver of Medicare spending variation. Consequently, extrapolating lessons on health spending from Medicare to the privately insured must be done with caution. Third, we document large dispersion in overall inpatient hospital prices and in prices for seven relatively homogenous procedures. For example, hospital prices for lower-limb MRIs vary by a factor of twelve across the nation and, on average, two-fold within HRRs. Finally, hospital prices are positively associated with indicators of hospital market power. Even after conditioning on many demand and cost factors, hospital prices in monopoly markets are 15.3 percent higher than those in markets with four or more hospitals. |
| JEL: | I11 L10 L11 |
| Date: | 2015–12 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:21815&r=mkt |
| By: | Tiziana D'Alfonso (Department of Computer, Control and Management Engineering Antonio Ruberti (DIAG), University of Rome La Sapienza, Rome, Italy); Valentina Bracaglia (Department of Computer, Control and Management Engineering Antonio Ruberti (DIAG), University of Rome La Sapienza, Rome, Italy); Yulai Wan (Department of Logistics and Maritime Studies, Hong Kong Polytechnic University, Hung Hom, Kowloon, Hong Kong) |
| Abstract: | We study multiproduct pricing of core and side goods in the case of a (monopoly) airport city. The consumption of the side services is not conditional on the consumption of the core service, i.e., travellers as well as non-travellers may demand side goods but derive different benefits. We obtain several results in two different settings. The first one depicts the case in which individuals make decisions about buying core and side goods independently. In this case, non-traveller demand induces the facility to increase the core price with respect to the case in which only travellers may purchase side services. In the second one, individuals make decisions simultaneously, depending on their degree of foresight over the surplus that they anticipate to obtain from the consumption of side goods. In this case, the non-passenger demand might incentivizes the transport facility to charge lower core price, with respect to the case in which only travellers may purchase side services. Manipulating the side products mix in order to enrich the shopping experience of travellers (i.e., to increase the benefit that they derive from the joint consumption of core and side goods) may be welfare-enhancing. Traveller surplus would certainly increase, but such positive effects occur to the detriment of non-travellers, who find themselves to pay a higher price for side products, whatever is the level of consumer foresight. |
| Keywords: | monopoly; multiproduct pricing; complementarity effect; demand effect; hierarchical demands; airport city |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:aeg:report:2015-14&r=mkt |
| By: | Syaglova, Yulia (Russian Presidential Academy of National Economy and Public Administration) |
| Abstract: | The paper attempts to analyze the genesis of the main paradigms of marketing. Given the author's understanding and pointed out the advantages and disadvantages of each of them, and formulated trends in the further development of the concept of marketing. |
| Keywords: | marketing, marketing paradigm, genesis, relationship marketing, marketing 4P, 4C, 4R |
| JEL: | M31 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:rnp:wpaper:sy2&r=mkt |
| By: | Georgios Alaveras (European Commission – JRC - IPTS); Estrella Gomez Herrera (European Commission – JRC - IPTS); Bertin Martens (European Commission – JRC - IPTS) |
| Abstract: | This study examines geographical market segmentation in the market for e-books in the EU, based on data from the Amazon Kindle e-books store, the market leader. Residents in all EU countries have access to the Amazon US Kindle store. However, access to Amazon's 6 e-book stores in the EU (UK, Germany, France, Spain, Italy and the Netherlands) is restricted to residents in each of these countries and in 4 neighbouring countries with which they share a language. There is no cross-border store access between these 6 countries. Because e-book catalogues are 93% overlapping between these 6 stores, cross-border access restrictions do not significantly affect cross-border availability in the EU6+4=EU10. Even for the remaining EU18 cross-border availability is very high because they have access to nearly all e-books in the EU6 stores via the Amazon US store. They have no direct access to the EU6 e-book stores however. Lifting digital access walls for Amazon e-book stores in the EU would result in a small increase only in the book titles available to EU consumers. E-book prices vary between Amazon EU stores, and between EU and US e-book stores. Currently, EU10 consumers can find price arbitrage opportunities between their local store and the US store only. Consumers in the remaining EU18 can buy from the US store only. Lifting geographical access restrictions would increase price arbitrage options, especially for EU18 e-book consumers. However, the welfare impact is difficult to predict as it might lead to increased price convergence, with winners and losers. E-book prices excluding VAT appear to be negatively correlated with VAT rates. This reduces consumer price variation despite variations in VAT rates across countries. The discrepancy between universal access to the US e-book store and geographically restricted access to the same e-books in EU stores indicates that access is driven by commercial considerations rather than objective legal barriers related to the EU copyright management regime. Market segmentation piggy-backs on but is not driven by the copyright regime. |
| Keywords: | Amazon, e-books, geographical market segmentation, EU market, electronic publishing |
| JEL: | F15 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:ipt:decwpa:2015-13&r=mkt |
| By: | Abby Alpert; Darius Lakdawalla; Neeraj Sood |
| Abstract: | Pharmaceutical firms currently spend over $4 billion on direct-to-consumer advertising (DTCA) of prescription drugs, a nearly 30-fold increase since 1993 that has led to much debate about its value to patients. We examine how DTCA influences drug utilization along the extensive and intensive margins by exploiting a large and plausibly exogenous shock to DTCA driven by the introduction of Medicare Part D in 2006. Using data on advertising for local media markets from Nielsen, we show that Part D led to large relative increases in DTCA in geographic areas with a high concentration of Medicare beneficiaries compared to areas with a low concentration. We examine the effects of this sudden differential increase in advertising on non-elderly individuals to isolate the effects of advertising on drug utilization from the direct effects of Part D. Using data from pharmacy claims, we find substantial differential increases in drug utilization that mirror the increases in DTCA after Part D. These effects are driven both by increased take-up of treatment and improved drug adherence. Our results imply significant spillovers from Medicare Part D onto the under-65 population and an important role for non-price factors in influencing prescription drug utilization. |
| JEL: | H51 I10 I18 |
| Date: | 2015–11 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:21714&r=mkt |
| By: | Orazio Attanasio; Elena Pastorino |
| Abstract: | We propose a model of price discrimination to account for the nonlinearity of unit prices of basic food items in developing countries. We allow consumers to differ in their marginal willingness and absolute ability to pay for a good, incorporate consumers’ subsistence constraints, and model consumers’ outside options from purchasing a good, such as self-production or access to other markets, which depend on consumers’ preferences and income. We obtain a simple characterization of equilibrium non-linear pricing and show that nonlinear pricing leads to higher levels of consumption and lower marginal prices than those implied by the standard nonlinear pricing model. The model is nonparametrically and semiparametrically identified under common assumptions. We derive nonparametric and semiparametric estimators of the model’s primitives, which can easily be implemented using individual-level data commonly available for beneficiaries of conditional cash transfer programs in developing countries. The model well accounts for our data on rural Mexican villages. Importantly, the standard nonlinear pricing model, a special case of our model, is almost always rejected. We find that sellers have large degrees of market power and exert it by price discriminating across consumers through distortionary quantity discounts. Contrary to the prediction of the standard model, consumption distortions are less pronounced for individuals purchasing small quantities, despite the steep decline of observed unit prices with quantity. Overall, most consumers tend to benefit from nonlinear pricing relative to linear pricing. A novel result is that when sellers have market power, policies such as cash transfers that affect households’ ability to pay can effectively strengthen sellers’ incentive to price discriminate and thereby give rise to asymmetric price changes for low and high quantities, which exacerbate the consumption distortions associated with nonlinear pricing. We find evidence of these patterns in response to transfers in our data. These results confirm the importance of our proposed extension of the standard nonlinear pricing model in evaluating the distributional effects of nonlinear pricing. |
| JEL: | D42 D43 D82 I38 O12 O13 O22 |
| Date: | 2015–11 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:21718&r=mkt |
| By: | Dold, Malte |
| Abstract: | The objective of this note is to revisit the meaningfulness of the Condorcet Jury Theorem (CJT) and apply it to the recent debate on liberal paternalism and consumer protection. The CJT con-sists of two parts, (a) stating that a jury of experts is always more competent than a single expert given a certain level of competence, and (b) asserting that for large juries, the collective com-petence approaches infallibility. This note argues that these insights suggest the application of a Condorcet jury voting procedure to the case of nudging boundedly rational consumers. The note proposes a simple calculus for finding an optimal jury size and advocates consumers' meta-preferences as the jury's evaluative dimension for designing soft paternalistic policies. |
| Keywords: | Bounded Rationality,Condorcet Jury Theorem,Consumer Policy,Educative Nudges,Hierarchical Preferences,Knowledge Problem,Liberal Paternalism |
| JEL: | B41 D03 D63 D71 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:wgspdp:201507&r=mkt |
| By: | Donald Kenkel; Alan Mathios; Hua Wang |
| Abstract: | The FDA is considering using its regulatory authority over the tobacco industry to promote public health by restricting the advertising of menthol cigarettes. In this paper we contribute new empirical evidence on the effects of magazine advertisements for menthol cigarettes on cigarette demand. Unlike previous research on cigarette advertising and demand, we use individual-level data and a measure of advertising exposure based on each consumer’s magazine-reading habits. These data allow us to control for individual heterogeneity that influences both advertising exposure and cigarette demand. We exploit quasi-experimental variation in advertising exposure in the 2000s created by sharply different supply-side variation in menthol and non-menthol advertising. We examine the importance of controlling for heterogeneity by estimating simple models relating advertising exposure to behavior and then adding specifications that take advantage of the richness of our individual-level data. We examine advertising effects on multiple margins of cigarette demand. Our empirical results do not provide any evidence that menthol advertising in magazines affects cigarette demand at various margins: the probability of menthol use; smoking participation; the number of cigarettes smoked per day; the probability of a past-year quit attempt; and anti-smoking attitudes among teens. |
| JEL: | I12 |
| Date: | 2015–12 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:21790&r=mkt |
| By: | Chris Moore; Dennis Guignet; Kelly B. Maguire; Chris Dockins; Nathalie B. Simon |
| Abstract: | The Chesapeake Bay is the largest estuary in the United States and the third largest in the world. The surrounding Watershed encompasses 64,000 square miles, and is home to about 18 million people. There have been numerous studies measuring the value of different components of the Chesapeake Bay but no study or set of studies provides a comprehensive estimate of the values associated with the improvements likely to result from recently implemented pollution limits. To fill this gap we developed a stated preference (SP) survey that uses a discrete choice experiment response format to examine households’ willingness to pay (WTP) for water quality improvements in the Chesapeake Bay. During extensive focus group testing, care was taken to identify the environmental attributes that are most important to both users and non-users and to quantitatively describe these attributes using understandable and tangible metrics. The survey was mailed to a stratified random sample of households across 17 states in the eastern U.S. and the District of Columbia. This paper reports the results of the empirical analysis, including marginal WTP estimates for each environmental attribute and total WTP for the expected outcome of the pollution reduction program. A comparison of WTP across households suggests that a substantial portion of the benefits can be attributed to nonusers. Results also show that benefits from improving water quality in freshwater lakes in the Watershed are an important ancillary benefit likely to result from reducing pollution in the Bay. |
| Keywords: | Chesapeake Bay, choice experiment, stated preference, TMDL, water quality |
| JEL: | Q51 Q53 |
| Date: | 2015–11 |
| URL: | http://d.repec.org/n?u=RePEc:nev:wpaper:wp201506&r=mkt |
| By: | Asche, Frank (UiS); Misund, Bard (UiS); Oglend, Atle (UiS) |
| Abstract: | This study examines the Fish Pool salmon futures contract with respect to how well the market performs in terms of the futures price being an unbiased estimator of the spot price and whether the market provide a price discovery function. Using data for 2006-2014 and with futures prices with maturities up to 6 months we find that spot and lagged futures prices are cointegrated and that the futures price provides an unbiased estimate of the spot price. We also find that, with the exception of the front month, that the causality is one-directional. The spot prices lead futures prices between 1 to 6 months maturity. Hence, while the spot and lagged futures prices are unbiased estimates, we do not find support for the hypothesis that futures prices provides a price discovery function. Rather, it seems that innovations in the spot price influence futures prices. This finding is not uncommon in new and immature futures contracts markets. Hence, the salmon futures market is still immature and has not yet reached the stage where futures prices are able to predict future spot prices. |
| Keywords: | Atlantic salmon; futures prices; price discovery |
| JEL: | G13 G14 Q22 |
| Date: | 2015–12–18 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:stavef:2015_016&r=mkt |
| By: | Latyshova, Ludmila (Russian Presidential Academy of National Economy and Public Administration); Syaglova, Yulia (Russian Presidential Academy of National Economy and Public Administration) |
| Abstract: | The theoretical background of the customer – oriented approach is considered. The author’s understanding of this concept for nowadays is to pay much attention to indicators of customer focus, dividing them into external, for example, customer satisfaction and loyalty index; and internal, which are based on the performance of employees’ engagement. The concept of customer focus today - is the basis of competitiveness, sustainable development of the company through effective alignment of business processes of the organization of client relations. |
| Keywords: | customer-oriented approach; customer-centric company; customer focus; internal business processes; metrics of the customer - driven company; the employee engagement |
| JEL: | M31 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:rnp:wpaper:sy1&r=mkt |
| By: | Melisande Cardona (European Commission - JRC - IPTS); Nestor Duch-Brown (European Commission - JRC - IPTS); Bertin Martens (European Commission – JRC - IPTS) |
| Abstract: | This report presents empirical evidence about the obstacles that European consumers face when trying to buy online goods and services in other EU Member States. It relies on data from a consumer survey carried out in February-March 2015 in the EU28. By comparing named websites with respondents’ answers on the location of web shops, we find that 77% correctly assess whether a website is located domestically or in a foreign country. We also find that survey results are biased because cross-border purchases are under-reported. In addition, the report finds that prices, variety and transaction costs are strong drivers to shift consumer purchases of goods from offline to online shops, as predicted by economic theory. Consumers’ perceptions of risk still hold them back from online transactions, which leaves some margin for policy makers to improve the regulatory and institutional setting. The results are less conclusive for online access to digital media content and for shifting online purchases from domestic to foreign markets. |
| JEL: | D12 |
| Date: | 2015–06 |
| URL: | http://d.repec.org/n?u=RePEc:ipt:decwpa:2015-06&r=mkt |
| By: | Michail Batikas (European Commission – JRC - IPTS); Estrella Gomez Herrera (European Commission – JRC - IPTS); Bertin Martens (European Commission – JRC - IPTS) |
| Abstract: | This study compares the film catalogues among the 11 Netflix country stores in the EU that provide film streaming services to consumers on the basis of a subscription (SVOD) business model. We estimate cross-border availability of films in Netflix in the EU at 31%, somewhat lower than the 40% availability of downloadable films in the Apple iTunes stores in the EU. Availability patterns are to a large extent driven by consumer preferences and geographical and linguistic proximity. The average delay in availability between theatre and Netflix release (“windowing”) in the EU11 is 326 days, with wide variations across countries, compared to only 112 days delay in the US. Windowing delays are shortening for more recent films. For a sample of films in the UK Netflix catalogue we find that they remain available for 340 days on average. |
| Keywords: | Netflix, digital film, video on demand, VoD, film catalogues |
| JEL: | F15 |
| Date: | 2015–11 |
| URL: | http://d.repec.org/n?u=RePEc:ipt:decwpa:2015-11&r=mkt |
| By: | Emek Basker; Lucia Foster; Shawn Klimek |
| Abstract: | Employment by gasoline stations increased between 1977 and 1992, a period during which many stations converted from full-service to self-service pumps, outsourcing to customers tasks previously performed by employees. Applying several identification strategies to establishment-level data from the Census of Retail Trade over this period, we show that self-service stations employ approximately 0.4 fewer workers per pump. At the same time, stations that adopted self service expanded their size and diversified operations by adding convenience stores, mitigating the job-loss impact of self service. |
| Keywords: | Customer-labor substitution, retail, gasoline station, self service, full service, outsourcing |
| JEL: | D22 D24 J23 L81 |
| Date: | 2015–12 |
| URL: | http://d.repec.org/n?u=RePEc:cen:wpaper:15-45&r=mkt |
| By: | Marius Yapo (Département d'économique, Université de Sherbrooke); Jie He (Â Département d'économique, Université de Sherbrooke); Bruno Gagnon (Département de génie civil, Université de Sherbrooke); Luc Savard (Département d'économique, Université de Sherbrooke); Roland Leduc (Département de génie civil, Université de Sherbrooke) |
| Abstract: | L’objectif de cet article est de déterminer la volonté à payer (VAP) de la population sherbrookoise et magogoise pour l’amélioration de la qualité des eaux du lac et de la rivière Magog; ainsi que leur volonté à accepter (VAA) pour une compensation monétaire dans un scénario d’interruption du système d’épuration des eaux usées. Pour cela, nous utilisons une enquête d’évaluation contingente qui emploie le format de questionnaire VAP-VAA de type MBDC (Multiple Bounded Discrets Choices ou questionnaires à choix discrets et multi-bornes). Pour approfondir l’analyse, nous suivons la logique du modèle de Welsh et Poe (1998) pour déterminer les VAP et VAA moyennes des individus résidant autour du lac et de la rivière Magog. À cet effet, nous trouvons une VAP moyenne par habitant de 98$CA/mois, et une VAA moyenne par habitant de 758$CA/mois. |
| Keywords: | Évaluation contingente; Qualité de l’eau; Volonté-à-payer; Volonté-à-accepter; lac Magog; rivière Magog. |
| Date: | 2015–12 |
| URL: | http://d.repec.org/n?u=RePEc:shr:wpaper:15-15&r=mkt |
| By: | James Richard Hill; Peter A. Groothuis |
| Abstract: | The influx of international players into the NBA has led researchers to investigate whether pay discrimination exists for these new entrants. Using a two-stage double fixed-effect model, Yang and Lin (2015) found evidence of salary discrimination against international players. Using a similar technique with a much longer unbalanced panel dataset (1989-2013), we are unable to verify their results. Key Words: Wage Discrimination, NBA |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:apl:wpaper:15-13&r=mkt |
| By: | Dennis Guignet; Charles Griffiths; Heather Klemick; Patrick J. Walsh |
| Abstract: | Almost 30% of aquatic grasses worldwide are either lost or degraded (Barbier et al, 2011). The Chesapeake Bay is no exception, with levels of submerged aquatic vegetation (SAV) remaining below half of the historic levels. This decline is largely attributed to excessive nutrient and sediment loads degrading Bay water quality. SAV provide many important functions to natural ecosystems, many of which are directly beneficial to local residents. To understand the implicit value residents place on SAV and the localized ecosystem services it provides, we undertake a hedonic property value study using residential transaction data from 1996 to 2008 in eleven Maryland counties adjacent to the Chesapeake Bay. These data are matched to high resolution maps of Baywide SAV coverage. We pose a quasi-experimental comparison and examine how the price of homes near and on the waterfront vary with the presence of SAV. On average, waterfront and near-waterfront homes within 200 meters of the shore sell at a 5% to 6% premium when SAV are present. Applying these estimates to the 185,000 acre SAV attainment goal yields total property value gains on the order of $300 to 400 million. |
| Keywords: | aquatic grasses, Chesapeake Bay, ecological input, ecosystem services, hedonics, submerged aquatic vegetation, SAV, water quality |
| JEL: | Q51 Q53 |
| Date: | 2014–12 |
| URL: | http://d.repec.org/n?u=RePEc:nev:wpaper:wp201406&r=mkt |