nep-mkt New Economics Papers
on Marketing
Issue of 2016‒06‒18
twelve papers chosen by
João Carlos Correia Leitão
Universidade da Beira Interior

  1. Advertising and Aggregate Consumption: A Bayesian DSGE Assessment By Benedetto Molinari; Francesco Turino
  2. Is Fair Trade Fair for Consumers? A Hedonic Analysis of U.S. Retail Fair Trade Coffee Prices By Wang, Xiaojin
  3. Substitutes or Complements? Consumers’ Preferences and Willingness to Pay for Animal Welfare, Organic, Local and Low Fat Food Attributes By Akaichi, Faical; Glenk, Klaus; Revoredo-Giha, Cesar
  4. Product-centric Information Management: A Case Study of a Shared Platform with Blockchain Technology By Mattila, Juri; Seppälä, Timo; Holmström, Jan
  5. Avian Influenza: outbreaks and the impact on UK consumer demand for poultry. By Siettou, Christina
  6. Returns to Consumer Search: Evidence from eBay By Thomas Blake; Chris Nosko; Steven Tadelis
  7. Leveraging Dominance with Credible Bundling By Hurkens, Sjaak; Jeon, Doh-Shin; Menicucci, Domenico
  8. Do agents maximise? Risk taking on first and second serves in tennis By Jeffrey Ely; Romian Gauriot; Lionel Page
  9. Introduction of new food and drink products in the UK: is there a trend towards more sustainability? By Costa-Font, Montserrat; Revoredo-Giha, Cesar
  10. Analyzing the Factors for Creating Competition among Products By Alvi, Mohsin; Mirza, Mohammad Haris; Khan, M. Mubashir Q.; Aqeel, Beenish; Ikram, Midra
  11. Consumer Responses to Food Products Produced Near the Fukushima Nuclear Plant By Aruga, Kentaka
  12. Product Quality and International Price Dynamics By Marta Arespa; Diego Gruber

  1. By: Benedetto Molinari (University of Malaga, Spain; The Rimini Centre for Economic Analysis, Italy); Francesco Turino (Universitat d'Alacant, Spain)
    Abstract: Aggregate data reveal that in the U.S. advertising absorbs approximately 2% of GDP and has a well-defined pattern over the business cycle, being strongly procyclical and highly volatile. Because the purpose of brand advertising is to foster sales, we ask whether such spending appreciably affects the dynamics of aggregate consumption and, through this avenue, the economic activity. This question is addressed by developing a dynamic general equilibrium model in which households' preferences for differentiated goods depend on the intensity of brand advertising, which is endogenously determined by profit-maximizing firms. Once the model is estimated to match the U.S. economy, it argues that in the long run the presence of advertising raises aggregate consumption, investment, and hours worked, eventually fostering the whole economic activity. We also find that advertising has a relevant impact on fluctuations in consumption and investment over the business cycle. All of the above mentioned effects are proven to depend crucially on the degree of competitiveness of advertising at the firm level.
    Date: 2016–06
  2. By: Wang, Xiaojin
    Abstract: This study aims to investigate the impact of the fair trade label on the market for coffee in the United States, a country with high public awareness regarding environmental and social matters. A revealed preference approach is adopted, using monthly Nielsen scanner sales panel data. The pricing of labelled ground and whole bean coffee is studied over the 2011-2013 period. Hedonic estimates are obtained for what consumers pay for different product characteristics. Results would provide information on the existing price differences between labelled and conventional coffee, and add to the ongoing analysis and debate over fair trade coffee.
    Keywords: fair trade, coffee, hedonic price, social premium, Nielsen scanner data, Agricultural and Food Policy, Consumer/Household Economics, Demand and Price Analysis, Food Consumption/Nutrition/Food Safety, International Development, International Relations/Trade, Marketing, C13, D44, O31, Q13,
    Date: 2016
  3. By: Akaichi, Faical; Glenk, Klaus; Revoredo-Giha, Cesar
    Abstract: A choice experiment was carried out in Scotland to assess consumers’ preferences and willingness to pay (WTP) for four popular food attributes (i.e. animal welfare, organic, local and low fat attributes) and determine whether these attributes are independent, complement or substitutes. The results showed that the majority of consumers have positive preferences and are willing to pay a price premium for the four attributes. Furthermore, the results from the interactions between attributes showed that labelling organic pork as local could significantly increase its demand. The results also show that the co-existence of animal welfare and organic/local/low fat labels is likely to generate a discounting effect on consumers’ total premium for these bundles of food attributes (i.e. these attributes are perceived by consumers as overlapping). Organic and local attributes were found to be independent.
    Keywords: Agricultural and Food Policy,
    Date: 2016–04
  4. By: Mattila, Juri; Seppälä, Timo; Holmström, Jan
    Abstract: Product-centric information management is a key concept in understanding the interoperability between increasingly intelligent and autonomous goods in distributed computing architectures. In the same way as consumers are an important source of data in contemporary platforms, products — especially durable and capital goods — can be considered equally valuable for industries that have not yet been platformatized. By exploiting a blockchain technology approach, this paper makes an effort to combine product-centric information management with platform literature in order to understand possible development trajectories for multi-sided platforms, across industry sectors. Through a novel perspective, this paper offers new insights into product-centric information management and shows that blockchain technology can have interesting and useful applications in the architectural design of industrial platforms. The paper concludes with some managerial implications about the nature of multi-sided markets for durable and capital goods. Furthermore, some policy implications are presented regarding the free flowing of information, as well as the role of the public authority in fostering platform development. Though the examination of an inductive case study, this paper aims to provide a clearer understanding on the ambiguous phenomenon of blockchain technology. The formulation of this particular case study will also assist other scholars in presenting their respective use cases in later studies. Furthermore, the presented case study will also prepare scholars for the complexities that companies face when designing blockchain-based applications and architectures. This paper suggests that understanding blockchain technology is essential when considering the implementation of the product-centric information management approach in practice. The inductive case study herein provides some bottom-up evidence suggesting that companies operating in the markets for durable and capital goods could build multi-sided platforms as a response to the prevalent consumer-centric platform trajectory. For practitioners, our detailed argumentation suggest that companies should consider use cases very carefully to determine which technology generates the broadest network effects in each particular situation.
    Keywords: Social and Behavioral Sciences, Product-centric Information Management, Intelligent Products, Product Life Cycle Management, Platforms, Multi-sided Markets, Blockchain Technology
    Date: 2016–04–01
  5. By: Siettou, Christina
    Abstract: According to FAO (2008) the year 2006 was identified as the ‘peak’ of the highly pathogenic avian influenza (HPAI) H5N1 with 60 countries reporting outbreaks. The UK had its first confirmed AI outbreak in March 2006 and, to date, the country has experienced eleven AI outbreaks. Most countries reporting AI outbreaks had, as a result, experienced a highly negative impact on their poultry consumption. This paper sets out to examine how AI outbreaks affected UK consumer demand for poultry. Pilot data have been obtained on a four weekly basis from the Agriculture and Horticulture Development Board (AHDB) for the period May 2nd 2010 to March 1st 2015. By employing the Almost Ideal Demand System (AIDS) model, the preliminary results have indicated that during the examined period poultry meat had the highest demand in terms of monetary amounts accounting for 43 per cent of the market. Overall, the pilot data revealed that there is no evidence to support that the occurrence of an AI outbreak, either in the UK or elsewhere in the world, had affected consumption of poultry in the UK. This result complies with the FAS London statement that UK consumers have ‘faith’ in poultry.
    Keywords: AIDS model, Avian Influenza, Consumer demand, Food safety, Poultry sales and consumption, Agricultural and Food Policy, Demand and Price Analysis, Q13,
    Date: 2016–04
  6. By: Thomas Blake; Chris Nosko; Steven Tadelis
    Abstract: A growing body of empirical literature finds that consumers are relatively limited in how much they search over product characteristics. We assemble a dataset of search and purchase behavior from eBay to quantify the returns, and thus implied costs, to consumer search on the internet. The extensive nature of the eBay data allows us to examine a rich and detailed set of questions related to search in a way that previous structural models cannot. In contrast to the literature, we find that consumers search a lot: on average 36 times per purchase over 3 (distinct) days, with most sessions ending in no purchase. We find that search costs are relatively low, in the region of 25 cents per search page. We pursue the analysis further by, i) examining how users refine their search, ii) how search behavior spans multiple search sessions, and iii) how the amount of search relates to finding lower prices.
    JEL: D43 D83 L13
    Date: 2016–06
  7. By: Hurkens, Sjaak; Jeon, Doh-Shin; Menicucci, Domenico
    Abstract: We contribute to the leverage theory of tying by studying bundling of a dominant firm instead of a monopolist. We show that, when one firm has symmetric dominance across all markets, bundling has a positive demand size effect on the dominant firm but affects both firms similarly through the demand elasticity effect. The demand size affect is hump-shaped in dominance level whereas the demand elasticity affect is increasing and negative (positive) for low (high) dominance levels. This makes bundling credible for sufficiently strong dominance. In the case of asymmetric dominance levels, we identify three different circumstances in which a firm can credibly leverage its dominance in some (tying) markets to foreclose a dominant rival in other (tied) markets. Our findings provide a justification for the use of contractual bundling for foreclosure.
    Keywords: Bundling; Dominance; Entry Barrier; leverage; Tying
    JEL: D43 L13 L41
    Date: 2016–05
  8. By: Jeffrey Ely; Romian Gauriot; Lionel Page
    Abstract: We investigate whether expert players with high incentives are able to optimally determine their degree of risk taking in contest. We use a large dataset on tennis matches and look at players risk taking on first and second serves. We isolate a specic situation, let serves, where second serves and first serves occur in a way which is as good as random. This creates the setting of a quasi-experiment which we can use to study players' serving strategies on first and second serves in comparable serving situations. We find that players, both men and women, are able to adopt serving strategies which meet the requirements of optimality arising from simple assumptions about risk-return trade-offs in serves. It's an insidious disease of backing off the second serve after they miss the first serve. Bill Tym, Vanderbilt Coach Nine of the top 20 men as of the Aug. 2 rankings would be better off statistically or virtually unaffected by using their first-serve technique on the second serve. New York Times, Aug 29, 2010
    Date: 2016–05–31
  9. By: Costa-Font, Montserrat; Revoredo-Giha, Cesar
    Abstract: Manufacturers and retailers are major influences in shaping consumers’ food preferences and choices through a variety of activities such as the distribution formats they create, the ways they operate them and the new food and drink products that they introduce. This paper focuses on the UK food and drink market and its purpose is to explore the role of retailers and manufacturers, as agents of change, when introducing food and drink products with sustainability attributes. In particular the following questions were investigated: whether there is trend as regards food and drink products with sustainability related claims in the UK market and what companies are leading the introduction of new products with sustainable claims and in what categories. The data analysed in this paper were extracted from Mintel’s Global New Products Database (GNPD), which provides information about new products launched in selected countries. The data was subject to a statistical analysis to answer the two aforementioned questions. The analysis revealed that products with sustainability claims show a positive trend, with ‘environmentally friendly package’ being the most popular claim. Overall, the results indicate that the sustainability message is increasingly present in the development of new products of retailers and manufacturers in the UK and retailers through their private labels are playing an important role except for the case of products with carbon neutral calims.
    Keywords: New product development, UK food industry, sustainability, Agricultural and Food Policy, Research and Development/Tech Change/Emerging Technologies,
    Date: 2016–04
  10. By: Alvi, Mohsin; Mirza, Mohammad Haris; Khan, M. Mubashir Q.; Aqeel, Beenish; Ikram, Midra
    Abstract: There are so many reasons of competition among products; the purpose of this study was to find different factors on which competition was dependent. Hypotheses were generated to find the impact of factors on competition. A cross-sectional design research study was conducts through a survey form where a total of 260 respondents participated. Result was derived with the help of statistical tool i.e. one sample T-test and mean value was assigned 4. The end result concluded that competition is dependent on all the factors (availability of goods, delivery on time, discounted pricing by suppliers, cost of products, quality of products, promotional activities and number of variations) except one factor (product support services). This study to some extend gave a view that product services created no difference for customers to buy but other factors related to cost and quality mattered.
    Keywords: Competition, Products, Customer, One Sample T-test,
    JEL: C1 D1 D2 D4 D7 M1 O1
    Date: 2016–03–20
  11. By: Aruga, Kentaka
    Keywords: Agricultural and Food Policy,
    Date: 2016–02
  12. By: Marta Arespa (Universitat de Barcelona); Diego Gruber (Kernel Analytics)
    Abstract: Two puzzling facts of international real business cycles are 1) weak or negative correlations between the terms of trade and output, and 2) a rise in relative consumption for countries where national goods become relatively more expensive. We show these puzzles either vanish or become much weaker in recent data. We propose a new mechanism that generates endogenous international price movements that are consistent with both the "old" and the "new" facts. In this mechanism, firms operating in a monopolistically competitive environment adjust price and quality of their products in response to technological shocks. This model is consistent with the old facts if price levels are not adjusted for quality. Instead, if quality adjustments to price level are introduced, the model's properties are in line with the new facts.
    Keywords: Quality, International Real Business Cycle, Ba kus- Smith puzzle,Hedoni Prices.
    JEL: E31 F44
    Date: 2016

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