nep-mkt New Economics Papers
on Marketing
Issue of 2018‒05‒21
five papers chosen by
João Carlos Correia Leitão
Universidade da Beira Interior

  1. Rules versus Home Rule: Local Government Responses to Negative Revenue Shocks By Shoag, Daniel; Tuttle, Cody; Veuger, Stan
  2. A Mechanism for Institutionalised Threat of Regulation: Evidence from the Swedish District Heating Market By Bonev, Petyo; Glachant, Matthieu; Söderberg, Magnus
  3. Comparing Access to Orphan Medicinal Products (OMPs) in the United Kingdom and other European countries By Zamora, B.; Maignen, F.; O'Neill, P.; Mestre-Ferrandiz, J.; Garau, M.
  4. Gains from Digitization: Evidence from Gift-Giving in Music By Dogan, Pinar; Bourreau, Marc
  5. On the Rise of FinTechs – Credit Scoring using Digital Footprints By Tobias Berg; Valentin Burg; Ana Gombović; Manju Puri

  1. By: Shoag, Daniel (Harvard University); Tuttle, Cody (University of Maryland); Veuger, Stan (American Enterprise Institute)
    Abstract: Local governments rely heavily on sales tax revenue. We use national bankruptcies of big-box retail chains to study sudden plausibly exogenous revenue shortfalls. Treated localities respond by reducing spending on law enforcement and administrative services. We further study how cities with different degrees of autonomy vary in their response. Cities in home rule states react more swiftly by raising taxes or issuing bonds. A regression discontinuity analysis of cities in Illinois emphasizes that this effect of local autonomy is causal. Home rule cities do not abuse their discretion: their bond ratings are more likely to be strong.
    Date: 2017–08
  2. By: Bonev, Petyo; Glachant, Matthieu; Söderberg, Magnus
    Abstract: This is the first study that uses a natural experiment to test the Regulatory Threat Hypothesis. We use a unique novel dataset on unregulated Swedish local district heating monopolists and a new measure of threat - customer complaints. Our results support the Regulatory Threat Hypothesis: firms reduce prices when they feel threatened by price regulation. We also find evidence that (otherwise unrelated) monopolists homogenize locally prices to reduce complaints and thus to reduce threat of regulation. This mechanism is related to Yardstick competition and to behavioral theories of fair pricing.
    Keywords: Regulatory Threat, Monopoly, Price Setting, Spatial Interaction, Natural Experiment
    JEL: L11 L12
    Date: 2018–05
  3. By: Zamora, B.; Maignen, F.; O'Neill, P.; Mestre-Ferrandiz, J.; Garau, M.
    Abstract: The European Commission's (EC) Orphan Medicinal Products Regulation intended to incentivise the research, development and marketing of new treatments for rare and chronically disabling or life-threatening diseases. Marketing authorisation granted to orphan medicinal products (OMPs) is however only the first step; patients have access to medicines once reimbursement or health technology assessment (HTA) decisions are implemented by national health systems. Our analysis found that since the implementation of the OMPs Regulation in 2000, 143 OMPs obtained a marketing authorisation in the EU. These OMPs are most widely accessible in Germany and France. In the other countries between 30% and 60% of OMPs are reimbursed. In England, less than 50% of OMPs are routinely funded by the NHS, with one-third of these recommended by NICE. The remaining products are directly procured and made available to patients by NHS England via commissioning policies or through the Cancer Drugs Fund. In Germany reimbursement is automatically granted to all medicines which receive a marketing authorisation, immediately after it. For the other countries, the shortest time from authorisation to a reimbursement decision is observed in France and Italy which takes on average 19 months.
    Keywords: Economics of Health Technology Assessment; Health Statistics and Data Analyses
    JEL: I1
    Date: 2017–03–01
  4. By: Dogan, Pinar (Harvard University); Bourreau, Marc (Telecom Paris Tech)
    Abstract: In this paper, we focus on recorded music gifts during the holiday season and estimate the reduction in deadweight loss due to the transition from physical CD gift-giving to digital music gift-giving with gift cards. Based on our survey data, we find that music CD gifts generate an average deadweight loss between 15 and 38 percent of the price. According to our estimates of gift music album sales which are based on U.S. data, the welfare gains from digitization, in terms of eliminated deadweight loss as a percentage of total spending on music albums, were between 5 to 13 percent during the week when digital sales peak in 2014.
    JEL: D10 L82 O33
    Date: 2018–02
  5. By: Tobias Berg; Valentin Burg; Ana Gombović; Manju Puri
    Abstract: We analyze the information content of the digital footprint – information that people leave online simply by accessing or registering on a website – for predicting consumer default. Using more than 250,000 observations, we show that even simple, easily accessible variables from the digital footprint equal or exceed the information content of credit bureau (FICO) scores. Furthermore, the discriminatory power for unscorable customers is very similar to that of scorable customers. Our results have potentially wide implications for financial intermediaries’ business models, for access to credit for the unbanked, and for the behavior of consumers, firms, and regulators in the digital sphere.
    JEL: D12 G20 O33
    Date: 2018–04

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