nep-mkt New Economics Papers
on Marketing
Issue of 2017‒01‒01
six papers chosen by
João Carlos Correia Leitão
Universidade da Beira Interior

  1. Digitalization and Collective Value Creation By Isaksson, Darja; Wennberg, Karl
  2. Competitive Cross-Subsidization By Zhijun Chen; Patrick Rey
  3. Selling gasoline as a by-product: The impact of market structure on local prices By Haucap, Justus; Heimeshoff, Ulrich; Siekmann, Manuel
  4. The Response of Consumer Spending to Changes in Gasoline Prices By Michael Gelman; Yuriy Gorodnichenko; Shachar Kariv; Dmitri Koustas; Matthew D. Shapiro; Dan Silverman; Steven Tadelis
  5. Interconnection and Prioritization By Pio Baake; Slobodan Sudaric
  6. Does Information Change Attitudes Towards Immigrants? Representative Evidence from Survey Experiments By Alexis Grigorieff; Christopher Roth; Diego Ubfal

  1. By: Isaksson, Darja (Future transparent); Wennberg, Karl (The Ratio Institute and Linköping University)
    Abstract: We discuss the spread and impact of digitalization as a disruptive technological change. We show how digitalization is intimately connected to globalization by first, being dependent on globalization for its impact, and second, enhancing the speed of globalization. Digitalization lowers barriers to funding, marketing, sales and distribution, and enables an increasing global flow of goods, services, and financial transactions. We discuss how digitalization also contributes to changing consumer habits and a blurring line between producers and consumers where the latter now have capabilities to build collective knowledge by they themselves becoming producers. Digital platforms are emerging, aggregating data and providing new business models where contact costs are approaching zero. These platforms wield strong economic power and the algorithms by which they operate also change incentives and transaction costs for producers and consumers. We sketch the patterns by which industries digitialize as being characterized by one or a few ‘platforms’ dominating a global market, but where such platforms also facilitate the emergence of more narrow niche businesses and products and allow new types of micro-multinationals to reach out to a larger global crowd and satisfy latent demand. These changes have already happened in media and music, and the principles seen in these industries can be seen as emerging in other sectors. We conclude by highlighting the potential of digitalization to enhance the value of collective goods. We particularly highlight the cases of health care and the energy, and discuss how digital technologies can contribute to collective value creation in these areas.
    Keywords: Entrepreneurship
    JEL: L26
    Date: 2016–12–22
  2. By: Zhijun Chen; Patrick Rey
    Abstract: Cross-subsidization arises naturally when firms with different comparative ad- vantages compete for consumers with diverse shopping patterns. Firms then face a form of co-opetition, being substitutes for one-stop shoppers and complements for multi-stop shoppers. Competition for one-stop shoppers then drives total prices down to cost, but firms subsidize weak products with the profit made on strong products. While firms and consumers would bene.t from cooperation limiting cross- subsidization (e.g., through price caps), banning below-cost pricing instead increases firms profits at the expense of one-stop shoppers; this calls for a cautious use of below-cost pricing regulations in competitive markets.
    Keywords: cross-subsidization, shopping patterns, multiproduct competition,co-opetition.
    JEL: L11 L41
    Date: 2016–11
  3. By: Haucap, Justus; Heimeshoff, Ulrich; Siekmann, Manuel
    Abstract: We use a novel data set with exact price quotes from virtually all German gasoline stations to empirically investigate how a temporary variance in local market structure - induced by restricted opening hours of specific players - affects price competition. We focus on stations selling gasoline as a by-product and find that, during their exogenously determined hours of opening, they have a significant negative price effect on nearby major-brand competitors. Applying a difference-in-difference framework with hourly average prices, our findings explicitly account for counterfactual market scenarios.
    Keywords: Gasoline Markets,Intraday Pricing,Supermarkets,Difference-in-Difference
    JEL: L11 L71
    Date: 2016
  4. By: Michael Gelman; Yuriy Gorodnichenko; Shachar Kariv; Dmitri Koustas; Matthew D. Shapiro; Dan Silverman; Steven Tadelis
    Abstract: This paper estimates how overall consumer spending responds to changes in gasoline prices. It uses the differential impact across consumers of the sudden, large drop in gasoline prices in 2014 for identification. This estimation strategy is implemented using comprehensive, daily transaction-level data for a large panel of individuals. The estimated marginal propensity to consume (MPC) is approximately one, a higher estimate than estimates found in less comprehensive or well-measured data. This estimate takes into account the elasticity of demand for gasoline and potential slow adjustment to changes in prices. The high MPC implies that changes in gasoline prices have large aggregate effects.
    JEL: E21 Q41 Q43
    Date: 2016–12
  5. By: Pio Baake; Slobodan Sudaric
    Abstract: We analyze pricing and competition under paid prioritization within a model of interconnected internet service providers (ISPs), heterogeneous content providers (CPs) and heterogeneous consumers. We show that prioritization is welfare superior to a regime without prioritization (network neutrality) and yields higher incentives for investment in network capacities. As ISPs price discriminate between on-net and off-net CPs, their bottleneck property is propagated and competition for consumers increases resulting in a potential prisoner's dilemma when deciding whether to offer prioritization. We show that peering for prioritized traffic emerges as a collusive outcome and present off-net prices as a further collusive instrument.
    Keywords: interconnection, investment, network neutrality, prioritization
    JEL: L13 L51 L96
    Date: 2016
  6. By: Alexis Grigorieff; Christopher Roth; Diego Ubfal
    Abstract: We study whether providing information about immigrants affects people’s attitude towards them. First, we use a large representative cross-country experiment to show that, when people are told the share of immigrants in their country, they become less likely to state that there are too many of them. Then, we conduct two online experiments in the U.S., where we provide half of the participants with five statistics about immigration, before evaluating their attitude towards immigrants with self-reported and behavioral measures. This more comprehensive intervention improves people’s attitude towards existing immigrants, although it does not change people’s policy preferences regarding immigration. Republicans become more willing to increase legal immigration after receiving the information treatment. Finally, we also measure the same self-reported policy preferences, attitudes, and beliefs in a four-week follow-up, and we show that the treatment effects persist. Keywords: Biased Beliefs, Survey Experiment, Immigration, Policy Preferences, Persistence. JEL classification: C90, J15, Z1, Z13
    Date: 2016

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