nep-mkt New Economics Papers
on Marketing
Issue of 2016‒11‒06
eleven papers chosen by
João Carlos Correia Leitão
Universidade da Beira Interior

  1. Vertical Information Restraints: Pro- and Anti-Competitive Impacts of Minimum Advertised Price Restrictions By John Asker; Heski Bar-Isaac
  2. Price Competition in the Presence of a Web Aggregator By Oksana Loginova; Andrea Mantovani
  3. Online Product Safety Sweep Results: Australian Competition and Consumer Commission By OECD
  4. Advance Selling, Competition, and Brand Substitutability By Oksana Loginova
  5. What makes a price fair ? An experimental study of transaction experience and endogenous fairness views By Herz, Holger; Taubinsky, Dmitry
  6. Non-comparative and comparative advertising in oligopolistic markets By Alipranti, Maria; Mitrokostas, Evangelos; Petrakis, Emmanuel
  7. Online Product Safety: Trends and Challenges By OECD
  8. REGIONALITY BEYOND QUALITY: COMPENSATION OF INFERIOR TASTE FOR STRAWBERRIES By Lorenz, Bettina Anne-Sophie; Langen, Nina; Landwehr, Stefanie; Hartmann, Monika
  9. Organizational learning in the context of performing arts By Lisa Balzarin; Monica Calcagno; Francesco Casarin
  10. Art experiences and eWOM: Exploring the content of museum reviews By Francesco Zanibellato; Umberto Rosin; Francesco Casarin
  11. Rockets and feathers: Asymmetric pricing and consumer search - Evidence from electricity retailing By Heim, Sven

  1. By: John Asker; Heski Bar-Isaac
    Abstract: We consider vertical contracts where the retail market may involve search frictions. Minimum advertised price restrictions (MAP) act as a restraint on customers’ information and so can increase search frictions in the retail sector. Such restraints, thereby, soften retail competition—an impact also generated by resale price maintenance (RPM). However, by accommodating (consumer or retailer) heterogeneity, MAP can allow for higher manufacturer profits than RPM. We show that they can do so through facilitating price discrimination among consumers; encouraging service provision; and facilitating manufacturer collusion. Thus, welfare effects may be positive or negative compared to RPM or to the absence of such restrictions.
    JEL: K21 L13 L15 L22 L42
    Date: 2016–10
  2. By: Oksana Loginova (Department of Economics, University of Missouri); Andrea Mantovani (Department of Economics, University of Bologna)
    Abstract: In this paper we examine the impact of a web aggregator on firms and consumers in a horizontally differentiated market. When a firm pays a fee to be listed on the aggregator's website, its location and price become observable to e-users (consumers who visit the website). We consider two settings, depending on the possibility for online firms to offer discounts to e-users. In equilibrium, not all firms will go online - some will choose to remain offline. Online firms attract more customers due to reduced mismatch costs, but face a tougher price competition. When the proportion of e-users is relatively low, price discrimination may hurt the firms. Therefore, less of them can afford to go online. The opposite holds when e-users predominate; price discrimination yields a higher number of online restaurants than uniform pricing. Finally, we evaluate the aggregator's optimal policy regarding the fee and whether to impose uniform pricing or to allow price discrimination. We discover that, unless the proportion of e-users is relatively low, the aggregator induces only a few restaurants to go online.
    Keywords: online reviews aggregators, price discrimination, competition
    JEL: C72 D43 D61 L11 L13 M31
    Date: 2015–03–12
  3. By: OECD
    Abstract: In April 2015, 25 jurisdictions participated in an OECD product safety sweep to determine the extent to which a selected number of products identified as: i) banned or recalled from the market; ii) presenting inadequate product labelling and safety warnings; or iii) not meeting voluntary and mandatory safety standards, were available for sale via e-commerce. This report provides a summary of the results of the sweep, which shows that a large proportion of the 1 709 inspected products were available for sale to consumers at domestic and cross-border levels. The results have been used to inform the OECD 2016 report “Online product safety: Trends and challenges”.
    Date: 2016–11–03
  4. By: Oksana Loginova (University of Missouri)
    Abstract: This paper studies the impact of competition on the benefits of advance selling. I construct a two-period price-setting game with heterogeneous consumers and two firms that produce different brands. Some consumers prefer one brand, others prefer the other brand. Consumers derive common value from their preferred brand, but they differ in how strongly they dislike their less preferred brand. I consider the situation in which one firm can offer consumers the opportunity to pre-order its product in advance of the regular selling season. I calculate the benefits of advance selling when this firm faces competition from the other firm in the regular selling season and when it does not. I show that competition enhances the benefits of advance selling when in the advance selling season consumers are uncertain about which brand they will prefer. Comparative statics analysis with respect to brand substitutability reveals some interesting results. For example, I find that in the competitive setting the firm has greater incentives to advance sell when the brands are more substitutable, while the reverse holds in the monopolistic setting.
    Keywords: advance selling, price competition, strategic consumers, valuation uncertainty, consumer heterogeneity, substitutability of brands
    JEL: C72 D42 D43 L12 L13 M31
    Date: 2016–10
  5. By: Herz, Holger; Taubinsky, Dmitry
    Abstract: People’s fairness preferences are an important constraint for what constitutes an acceptable economic transaction, yet little is known about how these preferences are formed. In this paper, we provide clean evidence that previous transactions play an important role in shaping perceptions of fairness. Buyers used to high market prices, for example, are more likely to perceive high prices as fair than buyers used to low market prices. Similarly, employees used to high wages are more likely to perceive low wages as unfair. Our data further allows us to decompose this history dependence into the effects of pure observation vs. the experience of payoff-relevant outcomes. We propose two classes of models of path-dependent fairness preferences -either based on endogenous fairness reference points or based on shifts in salience- that can account for our data. Structural estimates of both types of models imply a substantial deviation from existing history-independent models of fairness. Our results have implications for price discrimination, labor markets, and dynamic pricing.
    Keywords: Reference Points; Fairness; Salience; Bargaining; Endogenous Preferences; Price Stickiness
    JEL: D00 C9 C78
    Date: 2016–10–24
  6. By: Alipranti, Maria; Mitrokostas, Evangelos; Petrakis, Emmanuel
    Abstract: We study firms' advertising strategies in an oligopolistic market in which both non-comparative and comparative advertising are present. We show that in equilibrium firms mix over the two types of advertising, with the intensity of comparative advertising exceeding that of non-comparative advertising; moreover, that the intensity of comparative increases relatively to non-comparative advertising as market competition intensifies. Interestingly, the use of comparative advertising may lead to higher consumers' surplus and welfare in a mixed advertising market than in the absence of advertising or when either comparative or non-comparative advertising is not present.
    Keywords: Comparative Advertising,Non-comparative advertising,Oligopoly,Product Differentiation
    JEL: L13 M37
    Date: 2016
  7. By: OECD
    Abstract: This report explores the scope and magnitude of selected product safety challenges faced by consumers when purchasing tangible goods via e-commerce. It provides an overview of the government and business initiatives that have been carried out to protect consumers from three categories of unsafe products that are available for sale online in a number of jurisdictions. Such products include those: i) which have been banned or recalled; ii) with inadequate labelling and safety warnings; and iii) which do not meet voluntary and mandatory safety standards. The report is informed by the results of an OECD online product safety sweep carried out in April 2015, in which 25 jurisdictions participated and inspected a total of 1 709 selected products available for sale online.
    Date: 2016–11–03
  8. By: Lorenz, Bettina Anne-Sophie; Langen, Nina; Landwehr, Stefanie; Hartmann, Monika
    Abstract: In order to gain a better understanding of the preferences for regional food products in Germany, our study analyzes consumers’ WTP for unlabeled versus regionality labeled strawberries under consideration of taste perception effects.Our results indicate that stated regional origin does not influence the taste perception for strawberries but that it may influence consumers’ WTP. Thus, we conclude that consumer preferences for regional food products presumably are not only related to quality perceptions but in addition influenced by other aspects such as superior affective or moral valuation of a regional origin.
    Keywords: regionality, labels, Consumer/Household Economics,
    Date: 2016
  9. By: Lisa Balzarin (Dept. of Management, Università Ca' Foscari Venice); Monica Calcagno (Dept. of Management, Università Ca' Foscari Venice); Francesco Casarin (Dept. of Management, Università Ca' Foscari Venice)
    Abstract: Organizational learning is the focus of the present research, with an empirical investigation on the dynamics of knowledge acquisition adopted by two cultural organizations operating in the field of performing arts. In particular, data reveals how the artistic metaphor assumes the role of a context from which acquiring useful data and concepts for the managerial development of the cultural enterprise. Also the use of interviews to professionals working in other enteprises, as a planned way to access data, produced useful information.
    Keywords: organizational learning, knowledge acquisition, cultural enterprises, knowledge management, art management.
    JEL: D83 L26 L82
    Date: 2016–10
  10. By: Francesco Zanibellato (Dept. of Management, Università Ca' Foscari Venice); Umberto Rosin (Dept. of Management, Università Ca' Foscari Venice); Francesco Casarin (Dept. of Management, Università Ca' Foscari Venice)
    Abstract: The focus of the present research is on eWOM of museum experiences. Our study empirically examined which attributes of a museum experience trigger customersÕ creation of positive and negative eWOM. After having analyzed the reviews of the top 10 TripAdvisor most reviewed museums, we have assigned the experience attributes to an adaptation of the categories of the Kano Model (One-Dimensional, Delighters, Must-BeÕs and Indifferent). Results indicate what are the services of a museum that impact positive and negative reviews.
    Keywords: eWOM, museum experiences, TripAdvisor museum, museum marketing, content analysis.
    JEL: M31
    Date: 2016–10
  11. By: Heim, Sven
    Abstract: Recent theories suggest that consumers' search efforts are a function of prices and prices changes, respectively. This may help to explain the 'rockets and feathers' phenomenon often assigned to collusion - prices rise like rockets when costs increase and fall like feathers when costs decrease. This paper empirically investigates the relation between cost pass-through and consumer search intensity for the German electricity retail market utilizing a unique panel dataset on retail electricity prices and consumer search intensity at online comparison sites for retail electricity, both at the zip code level. The main findings are 1) consumers search non-linear with regard to prices and price changes. They search more when prices are high and they decrease search efforts substantially when prices fall but only increase search efforts slightly when prices rise, 2) costs are passed-through asymmetrically with positive cost shocks causing higher pass-through rates than cost decreases and 3) search intensity significantly impacts price adjustments and controlling for search intensity eliminates large parts of the asymmetry. I compare this finding with a counterfactual - the entrants - where all consumers are fully informed. In this case consumer search does not affect cost pass-through.
    Keywords: Information,Cost Pass-through,Consumer Search,Rockets and Feathers
    JEL: D83 L11
    Date: 2016

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