|
on Marketing |
|
Issue of 2017‒10‒29
eleven papers chosen by João Carlos Correia Leitão Universidade da Beira Interior |
| By: | Anna D'Annunzio; Antonio Russo |
| Abstract: | We study the relation between ad networks, consumer privacy and the online advertising market. We consider two publishers that can outsource their ad inventories to an ad network, in a market where consumers and advertisers endogenously multi-home. Differently from publishers, the ad network tracks consumers across websites, limiting wasteful repetition of ads. However, its tracking capability depends on consumer privacy-related choices (e.g., accepting third-party cookies). We show that tracking may increase or decrease the provision of ads, depending on its effect on expected advertising returns and on how audience sizes respond to ad quantities. When they decide whether to allow tracking, consumers exert a positive externality on advertisers. If tracking reduces the provision of ads, there is also a positive indirect externality on consumers. Hence, there may be too little tracking in equilibrium, even from consumers’ perspective. We evaluate several privacy policies, including direct regulatory interventions and the creation of markets for the right to track consumers. Finally, we characterize the conditions such that outsourcing to the ad network expands the provision of ads compared to the case where publishers compete directly for advertisers. |
| Keywords: | advertising, ad network, internet, tracking, multi-homing, privacy |
| JEL: | D43 D62 L82 M37 |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_6667&r=mkt |
| By: | Howell, Bronwyn E.; Potgieter, Petrus H. |
| Abstract: | Bundling of broadband access with other services has been a defining characteristic of internet access markets for as long as broadband technologies have been available. Initially, cable television competitors entered telecommunications markets by bundling first voice telephony and subsequently (broadband) internet access with their television products. The fear that bundling broadband access with live sport content could distort competition in broadband markets by first facilitating the assumption of a dominant position in broadband markets and then the squeezing-out of small rivals with low levels of investment but higher costs led to the New Zealand Commerce Commission recently declining to grant clearance for a merger between the dominant pay television provider and the number two (by market share) fixed line broadband provider also the number one mobile operator (Commission 2017; B. E. Howell and Potgieter 2017a; B. E. Howell and Potgieter 2017b). We investigate the situation where a basic content package, a premium content package and broadband are offered by a firm and analyse the firm’s price-setting behaviour when customers react to a given set of prices by maximizing their individual consumer surplus. Numerical simulations with random customer valuations is used to illustrate the multiplicity of outcomes that can be expected from a regulatory intervention. We discuss issues arising from this analysis that should be pertinent to decisions in similar cases. |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:itse17:169466&r=mkt |
| By: | Zegners, Dainis |
| Abstract: | An important strategy to build a reputation is to practice introductory pricing. By selling at a lower introductory price, sellers can increase demand, induce more buyers to provide feedback, and build a reputation more quickly. I examine introductory pricing in the form of offering free content. I show that offering free content to build a reputation can be a double-edged strategy. It does not only attract buyers with a high preference, but also buyers with a low preference for the product. |
| JEL: | L86 M31 D82 |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:vfsc17:168293&r=mkt |
| By: | Santeramo, Fabio Gaetano; Carlucci, Domenico; De Devitiis, Biagia; Seccia, Antonio; Stasi, Antonio; Viscecchia, Rosaria; Nardone, Gianluca |
| Abstract: | Understanding how an adequate food security may be determined, how nutritional intakes evolve over time and are influenced by global dynamics are few of the questions scholars are trying to answer. In addition, a great interest is devoted to the changes in consumers’ preferences and expectations as well as to the analysis of food innovations and their impact on the global market. We review the recent and emerging trends in food supply chains of selected sectors (fruits and vegetables, meat, and seafood), and deepen on emerging trends in the food industry. By presenting the evidence provided by the literature and emphasizing the unresolved research questions, we offer a critical view of future directions that should be followed by research agenda. |
| Keywords: | Diet; Fruit and vegetable; Functional food; Meat; Nanotechnology; Seafood |
| JEL: | D11 D12 Q11 Q18 |
| Date: | 2017–10–10 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:82105&r=mkt |
| By: | Igor Livshits (University of Western Ontario); Ariel Zetlin-Jones (Carnegie Mellon University); Natalia Kovrijnykh (Arizona State University) |
| Abstract: | This paper models credit histories as a way of aggregating information among various potential lenders, and is the first one to explicitly model how borrowers may affect this information aggregation through sequential borrowing. We analyze a dynamic economy with multiple competing lenders, who have heterogeneous private information about a consumer’s creditworthiness. We explore how this private information is aggregated through lending that take place over multiple stages. There are two key forces at play. On the one hand, acquiring a loan at an early stage serves as a positive signal—it allows the borrower to convey to other lenders the existence of a positively informed lender (advancing that early loan)—thereby convincing other lenders to extend further credit in future stages. On the other hand, because further lending dilutes existing loans (by increasing the consumer’s probability of default), the early lender takes this into account by charging a higher interest rate on the early loan, which makes the signaling costly. We demonstrate that despite dilution making early loans costly, borrowers may choose to take on small, early loans to signal their credit-worthiness to other lenders. We interpret this mechanism as building a credit history. We also show that information asymmetries can result in inefficiently large loans (relative to the symmetric information benchmark) extended in equilibrium. Our study leads us to examine features of consumer credit related to those consumers who hold multiple balances within a given loan category, e.g. multiple credit card balances. Very little is known in general about what types of consumers hold multiple balances or what credit terms, such as limits, these consumers face. Beyond providing basic documentation of these properties of consumer credit markets using data from TransUnion, we are more specifically interested in understanding how incumbent creditors adjust their credit terms when consumers initiate credit products with new lenders. One key aspect of the data we plan to exploit is the response of exiting lenders to an individual consumer opening of a new credit line. The dilution channel implies that existing credit cards should tighten credit limits attempting to limit the dilution from the new lender. On the other hand, the information aggregation channel implies the contrary—that incumbent lenders should extend their credit limits in response to new positive information, presumably available to the new lender. Since model parameters, in particular, average credit-worthiness, determine which channel dominates in our model, we are also interested in examining how the response of incumbent lenders varies with consumers’ prior credit histories. |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:red:sed017:807&r=mkt |
| By: | Baake, Pio; Sudaric, Slobodan |
| 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) but yields lower 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: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:itse17:169446&r=mkt |
| By: | Graham Beattie; Ruben Durante; Brian Knight; Ananya Sen |
| Abstract: | Do news media bias content in favor of advertisers? We examine the relationship between advertising by auto manufacturers in U.S. newspapers and news coverage of car safety recalls. This context allows us to separate the influence of advertisers, who prefer less coverage, from that of readers, who demand more. Consistent with theoretical predictions, we find that newspapers provide less coverage of recalls by their advertisers, especially the more severe ones. Competition for readers from other newspapers mitigates bias, while competition for advertising by online platforms exacerbates it. Finally, we present suggestive evidence that lower coverage increases auto fatalities. |
| JEL: | L10 L82 M21 M37 |
| Date: | 2017–10 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:23940&r=mkt |
| By: | Bergantino, Angela Stefania; Capozza, Claudia; Capurso, Mauro |
| Abstract: | In this paper, we aim at empirically uncovering the existence of price leadership in the passenger transport market, whose oligopolistic structure facilitates the strategic interaction among companies, with price being one of the principal elements of competition. The strategic interaction is particularly favoured by the fact that prices are easily observable online by all competitors. The analysis focuses on selected Italian city-pair markets that differ from one another with respect to the degree of inter and intra-modal competition and to the characteristics of the transport services provided. We exploit this heterogeneity to study transport operators’ strategic interactions in different competitive environments. We find evidence of the existence of price leadership, even though results differ across city-pair markets. In particular, it emerges that the incumbent operator, in either the air or the rail sector, always holds the role of leader. |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:sit:wpaper:17_3&r=mkt |
| 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 find that, during their hours of opening, they have a significant negative price effect on nearby competitors. |
| JEL: | L71 |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:vfsc17:168198&r=mkt |
| By: | Ater, Itai; Rigbi, Oren |
| Abstract: | We study how mandatory online disclosure of supermarket prices affects prices and price dispersion in brick-and-mortar stores. Using data collected before and after a transparency regulation went into effect in the Israeli food retail market, multiple complementary control groups and relying on a differences-in-differences research design, we document a sharp decline in price dispersion and a 4% to 5% drop in prices following the transparency regulation. The price drop varied across stores and products; it was smaller among branded products than among private-label products, and it was smaller among stores and products that were likely to have been associated with more intense search patterns even before prices became transparent (e.g., products in heavy-discount chains; popular products; products that meet stringent kosher requirements). Finally, we show that prices declined as more consumers used price-comparison websites, and we highlight the role of media coverage in encouraging retailers to set lower prices. |
| Keywords: | Price Transparency; Information; Mandatory Disclosure; Retail Food; Supermarkets |
| JEL: | D83 L66 L81 |
| Date: | 2017–10 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:12381&r=mkt |
| By: | Beattie, Graham; Durante, Ruben; Knight, Brian; Sen, Ananya |
| Abstract: | Do news media bias content in favor of advertisers? We examine the relationship between advertising by auto manufacturers in U.S. newspapers and news coverage of car safety recalls. This context allows us to separate the influence of advertisers, who prefer less coverage, from that of readers, who demand more. Consistent with theoretical predictions, we find that newspapers provide less coverage of recalls by their advertisers, especially the more severe ones. Competition for readers from other newspapers mitigates bias, while competition for advertising by online platforms exacerbates it. Finally, we present suggestive evidence that lower coverage increases auto fatalities. |
| Keywords: | advertising; car manufacturers; media bias; newspapers; safety recalls |
| Date: | 2017–10 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:12366&r=mkt |