nep-mkt New Economics Papers
on Marketing
Issue of 2017‒03‒12
nine papers chosen by
João Carlos Correia Leitão
Universidade da Beira Interior

  1. Choosing whether to compete: Price and format competition with consumer confusion By Gaudeul, Alexia; Crosetto, Paolo
  2. Multi-Product Firms and Product Quality By Manova, Kalina; Yu, Zhihong
  3. Mobile telephony in emerging markets By Göller, Daniel; Andersson, Kjetil; Hansen, Bkørn
  4. Aktuelle Herausforderungen der Wettbewerbspolitik durch Marktplätze im Internet By Budzinski, Oliver
  5. Brighter Prospects? Assessing the Franchise Advantage using Census Data By Francine Lafontaine; Marek Zapletal; Xu Zhang
  6. Gender matters: Private sector training in Vietnamese SMEs By Benedikte Bjerge; Nina Torm; Neda Trifkovic
  7. The role of initial shares in multi-period production economies with incomplete markets By Dierker, Egbert
  8. Do consumers rely more heavily on credit cards while unemployed? By Cole, Allison
  9. Distance to the Core, Productivity and Selection of Export Products-Destinations By Cardoso-Vargas, Carlos Enrique

  1. By: Gaudeul, Alexia; Crosetto, Paolo
    Abstract: We present results from a market experiment where firms with identical products can choose not only their price but also the format of their product. Products with different formats are difficult to compare but products with the same format are directly comparable. Savvy consumers buy the lowest priced of those products with the same format. We find that firms are unlikely to adopt the same format if there are many savvy consumers and firms can observe each other’s decisions. Increases in the number of savvy consumers then lead to higher average prices. We argue that tacit collusion is at the origin of this result. Patterns in the evolution of prices give further support to this hypothesis.
    JEL: L15 D18 D43
    Date: 2016
  2. By: Manova, Kalina; Yu, Zhihong
    Abstract: We examine the global operations of multi-product firms. We present a flexible heterogeneous-firm trade model with either limited or strong scope for quality differentiation. Using customs data for China during 2002-2006, we empirically establish that firms allocate activity across products in line with a product hierarchy based on quality. Firms vary output quality across their products by using inputs of different quality levels. Their core competence is in varieties of superior quality that command higher prices but nevertheless generate higher sales. In markets where they offer fewer products, firms concentrate on their core varieties by dropping low-quality peripheral goods on the extensive margin and by shifting sales towards top-quality products on the intensive margin. The product quality ladder also governs firms' export dynamics, both in general and in response to the exogenous removal of MFA quotas on textiles and apparel. Our results inform the drivers and measurement of firm performance, the effects of trade reforms, and the design of development policies.
    Keywords: export prices; multi-product firms; product quality; Trade; trade reforms
    JEL: D22 F10 F12 F14 L10 L11 L15
    Date: 2017–02
  3. By: Göller, Daniel; Andersson, Kjetil; Hansen, Bkørn
    Abstract: Rapidly increasing sales of multi-SIM phones, mobile penetration rates above 100% and reported customer behavior all point to the fact that a significant share of mobile customers in emerging markets tend to use more than one SIM card. A primary motive for this is to avoid making expensive off-net calls. We add a segment of flexible prepaid customers, who choose to "multi-sim" in equilibrium to the seminal model of competing telephone networks a la Laffont, Rey and Tirole (1998b). In equilibrium, the networks choose to set a very high prepaid off-net price to achieve segmentation. This incentive prevails, even if termination rates are set to marginal costs.
    JEL: D43 L13 L96
    Date: 2016
  4. By: Budzinski, Oliver
    Keywords: competition policy,internet economy,e-commerce,platform economics,economics of privacy,big data,personalized data,antitrust,Google,Amazon,Facebook
    JEL: L40 K21 L81 L82 L86 L13
    Date: 2016
  5. By: Francine Lafontaine; Marek Zapletal; Xu Zhang
    Abstract: This paper uses Census micro data to examine how starting a business as a franchise rather than an independent business affects its survival and growth prospects. We first consider the factors that influence the business owner's decision about being franchised, and then use different empirical approaches to correct for selection bias in our performance analyses. We find that franchised businesses on average benefit from higher survival rates and faster initial growth relative to independent businesses. However, the effects are not large and, conditional on first-year survival, the differences basically disappear. We briefly discuss potential mechanisms to explain these results. U.S. Census Bureau. All results have been reviewed to ensure that no confidential information is disclosed. Support for this research at the Michigan Census Research Data Center is gratefully acknowledged.
    Keywords: Independent Business, Business Survival, Business Growth, Franchising Decision, Survey of Business Owners, Retail, Services
    Date: 2017–01
  6. By: Benedikte Bjerge; Nina Torm; Neda Trifkovic
    Abstract: In many developing countries the skill base is a cause of concern with respect to international competition. Firm-provided training is generally seen as an important tool for bridging the skills gap between labour force and private sector demand. Yet little is known about how successful such training may be in closing the gender wage gap. We use a matched employer–employee panel dataset to assess why firms train and whether formal training affects wage outcomes in Vietnamese SMEs. Training is generally found to be firm-sponsored and specific in nature. We find that training is associated with a wage increase of 7–22 per cent for female workers only, depending on the analytical approach taken. We also show evidence that the wage increase is associated only with on-the-job training and that lower ability workers are more likely to be trained. Our findings indicate that, at least in Viet Nam, firm-sponsored on-the-job training helps close the gender wage gap.
    Keywords: training; wage, SME, Viet Nam
    Date: 2016
  7. By: Dierker, Egbert (Institute for Advanced Studies, Vienna, and Vienna Graduate School of Economics)
    Abstract: This paper focuses on a single firm with constant returns to scale in a multi-period setting with incomplete markets and a single good per state. Profits vanish whenever the firm maximizes profits with respect to a given price system. The paper addresses the following question: Shall the firm always act as a price taker? In the case of a partnership, there are no initial shares and no profits accrue from production. A corporation, however, has initial shareholders and can sell its output at any price. An example shows that this additional freedom can improve efficiency and welfare. This results from the fact that a wedge between price and cost can mitigate the inefficiency caused by the consumers who disregard the impact of their initial portfolio decisions on subsequent markets.
    Keywords: Multi-period economies with incomplete markets, partnerships and corporations, competitive price perceptions, the role of initial shares, the objective of a firm, efficiency and social welfare
    JEL: D21 D52 D61
    Date: 2017–01
  8. By: Cole, Allison (Federal Reserve Bank of Boston)
    Abstract: Leading up to the Great Recession, households increased their credit card debt by over 16 percent ($121 billion) during the five-year period from 2004 to 2009. The unemployment rate simultaneously began to rise in 2008, increasing from 5.0 percent in January 2008 to a high of 10.0 percent in October of 2009. During the recovery, from 2009 to 2014, credit card debt fell by more than 25 percent, as the unemployment rate returned to near prerecession levels. These coincident developments have led to speculation that consumers facing unemployment or job uncertainty may have increased their reliance on credit cards.
    Keywords: Consumer payment choice; consumer behavior; unemployment; credit cards; consumer preferences; Survey of Consumer Payment Choice
    JEL: D12 D91 J6
    Date: 2016–12–20
  9. By: Cardoso-Vargas, Carlos Enrique
    Abstract: This document examines and quantifies the effect that productivity and firm-internal selection have on the sale of new products to new destinations To quantify the influence of the firm-internal selection, we used a measurement of distance to the core which reflects, by means of an index, the degree that commercial distance merchandise sold has vis-à-vis the core product. The results show that decreasing the distance for products far from the core would require a great deal of effort on the part of firms in terms of quality or cost. It was also determined that if the distance between a product to be exported and the core product is doubled, its probability of generating a new product-country commercial link decreases 7.72 percentage points. That possibility decreases even further to destinations with consumers with high purchasing power. In the internal selection made by companies with regard to their products, there are factors influencing the selection of merchandise other than the core product. They move in opposite directions. On the one hand, there is a positive effect emanating from productivity and firm size, as well as an opposite effect due to market access and core-product price. The findings have implication for the possibilities of diversifying markets and expanding export-product portfolios.
    Keywords: international trade, heterogeneity of firms, behavior of companies
    JEL: D21 F13 F14
    Date: 2017–01

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