Freemium as optimal menu pricing

In online contents markets, content providers collect revenues from both consumers and advertisers by segmenting consumers who are willing to avoid advertisements and who are not. To analyze such situations, I construct a model of menu pricing by advertising platforms in two-sided markets. I find that, under certain condition, although a monopolistic platform can choose any menu of price-advertisement pairs, the optimal menu consists of only two services: ad-supported basic service and ad-free premium service. In addition, if the willingness to pay of advertisers is sufficiently high, the basic service is offered for free. This menu pricing is well known as freemium. Furthermore, this binary structure remains to hold under several extensions including duopoly platform competition.     

E-commerce as a stockpiling technology: Implications for consumer savings

Shopping on the Internet spares customers the discomfort of carrying around heavy and bulky baskets of goods, since the service usually includes home delivery. This makes e-commerce a technology well suited to helping consumers to buy in bulk or to stockpile items on discount. I use grocery scanner data provided by a supermarket chain selling both online and through traditional stores to show that the introduction of e-commerce leads to an increase in bulk purchase and stockpiling behavior by customers. Since bulk and discounted items are sold at a lower price per unit, my findings highlight a new dimension in which online shopping can be beneficial to consumers. According to my calculations, the reduction in the cost of stockpiling triggered by the introduction of electronic commerce generates significant savings.     

Exploring the key services and players in the smart car market

The traditional role of cars as a means of transport is now expected to undergo major changes as a result of the emerging smart car industry, whereby connection to the Internet can not only improve traffic safety by enabling self-driving but also entertain passengers. Under these circumstances, it is important to explore the killer services that are expected to be in high demand by consumers and keystone players in the emerging market. This study identifies the promising services from a consumer's perspective using analytic hierarchy process analysis and examines experts' views on which industries and firms, as keystone players, are expected to provide the competitive killer services in the market. The results show that the service that consumers find the most important is driving assistance, followed by infotainment and Internet of Things hubs. Meanwhile, the experts rank the importance of industrial player as in the order of Information Technology device manufacturers, followed by platform providers, automobile manufacturers, and network providers, while at the company level, the rank is in the order of Samsung Electronics, Hyundai Motor, Naver, and SK Telecom, respectively. These findings show that consumers regard smart cars as futuristic vehicles, yet continue to emphasize their conventional value as a means of transport, while the experts expect that among the various industry players, IT companies are most likely to enable the concept of the smart car to become a reality.     

分散决策下的双渠道供应链补偿策略——基于消费者渠道选择行为

为了有效解决由于对消费者的争夺从而引发的渠道之间关于定价、服务水平、利润等方面的冲突,基于消费者渠道选择行为,构建了网络直销市场与传统零售市场需求模型和双渠道供应链利润模型,运用Stackelberg模型,在制造商与零售商实施分决策时,通过制造商对零售商实施补偿激励前后的对比,分析了消费者渠道选择行为对网络直销渠道和传统零售渠道定价、制造商与零售商利润以及供应链总利润的影响,并求得最优定价及制造商的最优补偿额度和零售商的最优销售努力水平,进行了不同情况下的双渠道供应链利润的比较分析。结果表明,无论制造商是否实施补偿激励,都应随着网络消费者比例的增加而增加其网络直销价格;零售商的零售渠道价格应根据网络消费者比例的增加先降低到一定水平后再提升。当更多的消费者选择网络直销渠道时,制造商的补偿激励水平和零售商的销售努力程度均会下降。制造商应提高其补偿水平,进而激发零售商提高销售的努力水平,并使双方利润及供应链总利润最大化。研究结果为基于消费者选择行为的供应链补偿研究提供了新方法,对双渠道的供应链补偿研究有借鉴意义。     

Piracy and box office movie revenues: Evidence from Megaupload

In this paper we evaluate the heterogeneous effects of online copyright enforcement. We ask whether the unexpected shutdown of the popular file hosting platform Megaupload had a differential effect on box office revenues of wide-release vs. niche movies. Identification comes from a comparison of movies that were available on Megaupload to those that were not. We show that only movies that premiere in a relatively large number of theaters benefitted from the shutdown of Megaupload. The average effect, however, is negative. We provide suggestive evidence that this result is driven by information externalities. The idea is that online piracy acts as a mechanism to spread information about product characteristics across consumers with different valuations for the product. Our results question the effectiveness of blanket public anti-piracy policy, not only from a consumer perspective, but also from a producer perspective.     

服装店铺服务属性层级体系的研究

作为零售终端的服装店铺,其优质健全的顾客服务对每一个服装公司来说都至关重要。建立完善的服装店铺服务属性层级体系,有助于研究哪些服装店铺服务属性对服装消费决策影响较大,帮助企业赢得顾客并获得更多利润。从"服务"的定义出发,在回顾相关文献的基础上,通过实地考察对店铺服务属性进行补充,并结合专家访谈法和问卷调研法,提出服装店铺服务属性的层级体系。研究还发现,不管是男性消费者还是女性消费者,最关注的前两位店铺服务属性都是店员服务态度和店内服务设施,男性消费者比女性消费者更加关注售后服务和店员补救能力,女性消费者则更看重店员沟通能力和商品陈列。     

Comparing consumer preferences for color and nutritional quality in maize: Application of a semi-double-bound logistic model on urban consumers in Kenya

Consumer preferences for white maize in East and Southern Africa concerns developers of maize biofortified with provitamin A carotenoids, since carotenoids impart a yellow or orange coloration. Urban consumers’ willingness to pay (WTP) for yellow maize was estimated, using a semi-double-bounded logistic model, based on a survey of 600 maize consumers in Nairobi, Kenya, at posho mills, kiosks and supermarkets. Consumers showed a strong preference for white maize. Only a minority would buy yellow maize at the same price as white maize, and fewer consumers in the posho mills (24%) and kiosks (19%) than in the supermarkets (34%) would do so. On average, consumers need a price discount of 37% to accept yellow maize. This discount was less at the posho mills (35%) and kiosks (37%) than in the supermarkets (48%). Most respondents (76%) were aware of the existence of fortified meal and the generally showed an interest. The average premium for fortified maize was much less than the discount for yellow: 5.9% for those aware and 7.4% for those unaware. Consumer preferences were influenced by socioeconomic factors such as gender, education, income and ethnic background. Women have a stronger preference for both white maize and fortified maize than men, and consumers with more education have a stronger preference for white. Income decreases the WTP for yellow maize as well as the price elasticity, but increases the WTP for fortified maize. Consumers originating from Western Kenya have a lower preference for white, while those from Central Kenya had a stronger preference for fortified maize.     

Intermediating technologies and multi-group adoption: A comparison of consumer and merchant adoption intentions toward a new electronic payment system

Traditional technology adoption research has assumed a single adopting group. However, there are many settings in which multiple groups must jointly adopt an innovation in order for it to succeed. This is particularly true for new information technology innovations that mediate the relationship between two groups. For example, online exchanges (e.g., Freemarkets, GoFish) must attract both suppliers and buyers in order to be successful. The same is true for providers of hardware/software solutions for electronic data interchange and supply chain management. This article describes the phenomenon of multigroup adoption with a particular focus on applications within the financial services and retailing industries. Empirically, the article reports findings from a study that illustrates the importance of evaluating and managing multigroup technology adoption in the specific context of an in‐market trial of a new smart card‐based electronic payment system. Two distinct groups critical to the smart card's success are studied: consumers (who must decide to use the new card) and retailers (who must agree to adopt and use new technology needed to process smart card transactions). The study identifies which characteristics of the smart card innovation are most closely linked to intention to adopt for each group, and examines how these key characteristics differ by group. Perceptual data were collected via a mail survey from consumers and merchants living in the city where a one‐year market trial of the new card was taking place. Four separate sampling frames were established for both consumers and merchants who were participating in the trial as well as both consumers and merchants who were not participating in the trial. Random samples were then drawn from these frames. More than 350 consumers and over 250 merchants completed and returned the survey. Responses were analyzed separately for each of the four groups sampled. The most important characteristic leading to adoption identified by all four groups was relative advantage—the smart card had to demonstrate a clear competitive advantage over what they currently used. Compatibility (i.e., the degree to which the smart card fit with their current preferences) was also noted as important to all but the nonparticipating merchant group. Beyond this, the key drivers of adoption differed considerably by group. Participating consumers and participating merchants appeared to possess different perspectives when assessing their decision to adopt the smart card technology. Consumers seemed to value the notion that the adoption decision is under their control, whereas merchants seemed to place more value on the antecedents that had the potential to add to their bottom line. This suggests that it is necessary to institute different marketing tactics to attract the early adopting groups. In addition, significant differences in the importance of antecedents between participating and nonparticipating consumers and participating and nonparticipating merchants suggest that, over time, it may also be necessary to develop and use different marketing tactics for later adopters.     

激活电商APP

对电商APP而言,这是个最好的时代,也是最坏的时代。张志坚的行程排得很紧,上午与银泰网CEO廖斌讨论如何优化银泰的APP,下午作为嘉宾参加一个APP创业融资研讨会,直到晚上七点才得闲与记者碰面,第二天又要从北京飞回上海。两年前他创立了上海耶客网络科技,     

Differences in consumer loyalty and willingness to pay for service attributes across digital channels: A study of the Japanese digital content market

In this paper, the impact that the Internet access device has on consumer loyalty behaviors relative to Internet content was explored. To do so, a mixed logit demand function for mobile and PC subscribers to digital content was estimated and consumers’ willingness to pay for attributes related to specific content providers and their levels of service quality were measured. It was found that significant differences in loyalty and willingness to pay for service quality factors existed between mobile and PC Internet content subscribers, suggesting that while content may be developed as device independent, consumers interact differently with similar Internet content accessed through different devices. Specifically, the willingness to pay for more robust and more frequently updated content was on average higher in the mobile segment than in the PC segment. In addition, the overall switching costs consumers attributed to specific content providers via the mobile channel were far higher than through the PC channel. These results suggest that more robust content management systems must be developed to accommodate for such differences in consumer behavior.     

Barriers to Entry and Competitive Behavior: Evidence from Reforms of Cable Franchising Regulations

Between 2005 and 2008, nineteen of the fifty states of the U.S. reformed the franchising process for cable television, significantly easing entry into local markets. Using a difference‐in‐differences approach that exploits the staggered introduction of reforms, we find that prices for ‘Basic’ service declined systematically by about 5.5 to 6.8 per cent following the reforms, but we find no statistically significant effect on average price for the more popular ‘Expanded Basic’ service. We also find that the reforms led to increased actual entry in reformed states, by about 11.6% relative to non‐reformed states. Our analysis shows that the decline in price for ‘Basic’ service holds for markets that did not experience actual entry, consistent with limit pricing by incumbents. To control for potential state‐level shocks correlated with the reforms, we undertake a sample‐split test that finds larger declines in prices for both ‘Basic’ and ‘Expanded Basic’ services in local markets which faced a greater threat of entry (because they were close to a prominent second entrant). Our results are consistent with limit pricing models that predict incumbents respond to increased threat of entry, and suggest that the reforms facilitated entry and modestly benefited consumers in reformed states.     

Consumer Trial,Continuous Use,and Economic Benefits of a Retail Service Innovation: The Case of the Personal Shopping Assistant

Service innovations in retailing have the potential to benefit consumers as well as retailers. This research models key factors associated with the trial and continuous use of a specific self‐service technology (SST), the personal shopping assistant (PSA), and estimates retailer benefits from implementing that innovation. Based on theoretical insights from prior SST studies, diffusion of innovation literature, and the technology acceptance model (TAM), this study develops specific hypotheses and tests them on a sample of 104 actual users of the PSA and 345 nonusers who shopped at the retail store offering the PSA device. Results indicate that factors affecting initial trial are different from those affecting continuous use. More specifically, consumers' trust toward the retailer, novelty seeking, and market mavenism are positively related to trial, while technology anxiety hinders the likelihood of trying the PSA. Perceived ease of use of the device positively impacts continuous use while consumers' need for interaction in shopping environments reduces the likelihood of continuous use. Importantly, there is evidence on retailer benefits from introducing the innovation since consumers using the PSA tend to spend more during each shopping trip. However, given the high costs of technology, the payback period for recovery of investments in innovation depends largely upon continued use of the innovation by consumers. Important implications are provided for retailers considering investments in new in‐store service innovations. Incorporation of technology within physical stores affords opportunities for the retailer to reduce costs, while enhancing service provided to consumers. Therefore, service innovations in retailing have the potential to benefit consumers as well as retailers. This research models key factors associated with the trial and continuous use of a specific SST in the retail context, the PSA, and estimates retailer benefits from implementing that innovation. In so doing, the study contributes to the nascent area of research on SSTs in the retail sector. Based on theoretical insights from prior SST studies, diffusion of innovation literature, and the TAM, this study develops specific hypotheses regarding the (1) antecedent effects of technological anxiety, novelty seeking, market mavenism, and trust in the retailer on trial of the service innovation; (2) the effects of ease of use, perceived waiting time, and need for interaction on continuous use of the innovation; and (3) the effect of use of innovation on consumer spending at the store. The hypotheses were tested on a sample of 104 actual users of the PSA and 345 nonusers who shopped at the retail store offering the PSA device, one of the early adopters of PSA in Germany. Data were analyzed using logistic regression (antecedents of trial), multiple regression (antecedents of continuous use), and propensity score matching (assessing retailer benefits). Results indicate that factors affecting initial trial are different from those affecting continuous use. More specifically, consumers' trust toward the retailer, novelty seeking, and market mavenism are positively related to trial, while technology anxiety hinders the likelihood of trying the PSA. Perceived ease of use of the device positively impacts continuous use, while consumers' need for interaction in shopping environments reduces the likelihood of continuous use. Importantly, there is evidence on retailer benefits from introducing the innovation since consumers using the PSA tend to spend more during each shopping trip. However, given the high costs of technology, the payback period for recovery of investments in innovation depends largely upon continued use of the innovation by consumers. Important implications are provided for retailers considering investments in new in‐store service innovations. The study contributes to the literature through its (1) simultaneous examination of antecedents of trial and continuous usage of a specific SST, (2) the demonstration of economic benefits of SST introduction for the retailer, and (3) contribution to the stream of research on service innovation, as against product innovation.     

The Informational Role of Product Trade‐Ins for Pricing Durable Goods

This research theorizes that sellers of durable goods can utilize inferences about the buyer's willingness to pay based not only on her decision to trade in the old good but also on its characteristics. We find empirical support for this theory using transaction data for new car purchases. The results support the notion that dealers infer a higher willingness to pay and charge higher prices to consumers who trade in a used vehicle than to those who do not. We also find that dealers charge even higher prices to those consumers who trade in used cars that are similar to the new one.     

Retaining telecommunication services when universal service is defined by functionality: Japanese consumers' willingness-to-pay

This study uses contingent valuation to measure Japanese customers' willingness-to-pay to maintain combinations of five telecommunication services that are considered substitutes if universal service is defined on the basis of functionality. The analysis revealed the following results. First, consumers are more willing to pay to retain voice communication services than data transmission services. Second, customers accept Internet Protocol telephony as a substitute for plain old telephone service (POTS) as a universal service, and they are willing to pay much more than Japan's current Universal Service Fund charge. Third, even when mobile phone service (MOB) is available, consumers will pay to retain fixed-line voice services. Finally, consumers have an equal desire to keep fiber-to-the-home (FTTH) and fixed-line voice services, but it is less than the demand for MOB. Thus, under the present definition of POTS as a universal service, FTTH could be considered as a basic telecommunication service.     

The impact of regulation on the retail prices in fixed-line telephony across the European Union

This paper estimates reduced-form models for incumbent prices in the fixed telecommunications industry using data for European Union (EU) countries from 1998 to 2002. The regulation of fixed-line telephony has a significant impact on prices for residential consumers. Liberalization of the telecommunications industry decreased retail prices by about 8.2%. The introduction of carrier pre-selection and number portability had a negative impact on price levels. The estimation results also suggest that a 1% decrease in termination charges on the incumbent network led on average to a 0.17% decrease in the cost of usage basket for residential consumers. Furthermore, in the pricing regressions for incumbent local and national calls at peak and off-peak times interconnection charges are significant only in the estimation of national peak prices. A 1% decrease in single transit interconnection charges on the incumbent network led to a 0.31% decrease in incumbent national prices at peak times, as calculated for the average prices in the EU in 2002.     

The effect of online shopping channels on brand choice,product exploration and price elasticities

This paper analyzes the effect of an online shopping channel on private label purchases, product exploration and price elasticities. Variation in the timing that an online shopping service was introduced is utilized as a source of exogenous variation in the decision to shop online. Event study estimates indicate a 0.3 to 1.0 (1.0 to 2.0) percent increase (reduction) in the proportion of private label (new) products purchased after the introduction of the online shopping service. Price elasticities are then estimated utilizing an Exact Affine Stone Index (EASI) demand model. Comparisons of in-store and multichannel price elasticities indicate that households are, on average, less price sensitive when shopping across both the in-store and online channels. Own-price (cross-price) elasticities are 1.07 (5.56) times larger in-store than they are in a multichannel setting. These findings suggest that retailers manipulate the online search platform and(or) the provision of substitutes to favor private label products, which have a higher margin. Additionally, these results suggest that retailers may find it profit maximizing to raise prices as consumer baskets become more sticky in the multichannel purchasing regime.     

谁能成为互联网上的IBM

当互联网公司强大的内部IT系统及计算能力成为中小企业的外骨骼时,万亿美元级的市场便成形了。这时,谁会在这个市场里充当类似于IBM这样的企业IT架构师的角色呢?     

Local measured telephone service in the USA: A quantitative analysis

The USA has steadfastly held to a flat rate for local telephone service, whereas most other countries are characterized by a user-sensitive (measured service) system of pricing. Economic theory suggests some method of measured service pricing more accurately reflects the true costs of local service. This article seeks to determine how many US consumers could be induced to switch to measured service pricing, and using ordinary least squares, derives a model of the demand for measured service. The factors are identified that will induce the US population to move towards a measured service rate structure. The findings indicate that consumers are quite responsive to both relative price (between a local flat rate and a measured service rate) and advertising.     

Selling cross-border in online markets: The impact of the ban on geoblocking strategies

We develop a model of strategic geoblocking, where two competing multi-channel retailers, located in different countries, can decide to block access to their online store from foreign consumers. We characterize the equilibrium when firms decide unilaterally whether to introduce geoblocking restrictions. We show that geoblocking allows firms to soften competition, but at the cost of lower demand. A ban on geoblocking leads to lower prices, both offline and online. However, when firms can invest in increasing online demand, the ban may have adverse effects on investment and social welfare. We extend our analysis to account for price discrimination and investigate the role of shipping costs.     

Assessing consumer willingness to pay for Arctic food products

The food industry increasingly seeks to differentiate food products based on sustainability assurances, the use of traditional or ‘authentic’ production methods, a unique origin, or an association with a distinct cultural identity, often relying on certification to enhance the credibility of a quality claim. The natural conditions of the Arctic circumpolar region, its pristine environment, and the relational tie to Indigenous cultures in many circumpolar Arctic nations, distinguish Arctic foods from other commercially available foods, however, little is known about how consumers respond to foods from the Arctic. This paper examines consumers’ perceptions of and willingness to pay (WTP) for foods originating from the Canadian Arctic, and their receptivity to certification for sustainability, authenticity, and origin in the presence of multiple credence attributes. Data from an online survey of 1342 Canadian consumers show that preferences for Arctic foods are driven by the unique geographic origin and a connection with Indigenous cultures and traditions, as well as a desire to improve social and economic conditions in northern Canada. A discrete choice experiment featuring Arctic char elicits consumers’ WTP for attributes related to origin, certification, wild vs farmed fish, and Indigenous vs non-Indigenous fishers. Random parameters logit and generalized mixed logit models allow for both preference and scale heterogeneity. The analysis informs strategies to promote the Arctic food system, both from a Canadian regional economic development context and across the broader Arctic circumpolar region. Limitations imposed by the current seafood labelling regulatory environment in Canada are noted.