When worlds collide: The implications of panel data-based choice models for consumer behavior

Panel data, both diary and scanner, have been analyzed by marketing scientists for over thirty years. One of the important uses of panel data is to better understand consumer behavior by developing and testing hypotheses using the revealed preference data rather than experimental data that uses only self-reported behavior or behavior in a simulated choice environment. The purpose of this paper is to suggest areas of research where panel data can be used to better understand the underlying behavior of the panel members.     

Optimal speed of transition with a shrinking labour force and under uncertainty*

In the 1990s – during the restructuring of large state enterprises – Central European economies experienced high unemployment. Social policy expenditures, particularly targeted to the non‐employed, grew faster than expected due to the need to finance the out‐of‐the‐labour categories. In 1992, after the Passive Labour Market Policies’ reforms, the pace of transition decelerated. Unemployment dynamics, speed of transition and non‐employment policies are modelled based on the assumption that the labour force is shrinking over time. Dismissed workers have the opportunity to choose an outside‐option alternative to labour force participation. Individual uncertainty is assumed in a first phase of transition, while aggregate uncertainty – generating opposition to restructuring – is modelled in a second phase. The model predicts a slowdown in the speed of transition.     

The effects of unemployment and inflation on the income distribution: A regional view

VI. Summary and Conclusions The behavior of the U.S. income distribution over the business cycle has been the subject of several previous studies. However, a facet of these inquiries which has not been viewed is the geographical effects within the U.S. The diverse economic characteristics of the country have contributed to uneven inflationary and unemployment experiences among the respective regions during the national business cycles. The purpose of this study has been to model the regional income inequality responses to the distinct macroeconomic records for the years 1968–1976. One general consequence of this study is the conformation of earlier work suggesting that in some settings increases in the unemployment rate tend to increase the extent of income inequality and that inflation tends to reduce the extent of such inequality. Another result, however, has not been anticipated: namely, that regional inflation and unemployment had a waker impact on the income distribution the more unequal the distribution. For example, the weakest effects of the business cycle were observed for the South, and it was the Southern region which had the greatest income inequality. The North Central region, on the other hand, showed the greatest sensitivity to the business cycle, and it has the most equal income distribution.¹² Such geographical disaggregation seems important in understanding the varied implicit distributional effects within the U.S. when macroeconomic policy is aimed at reducing unemployment and inflation.     

Social and technological forecasting in the Soviet Union

Futures research is now an accepted part of the Soviet planning and control system. Soviet forecasting methods are similar to Western methods, differing chiefly in a greater insistence that complex methods are no substitute for a substantive understanding of the problem. Soviet methodological innovations are worth watching for, however. Actual forecasts are often not published, but the Soviet vision of the future is fairly clear. Key events will include the disappearance of capitalism and the achievement of controlled fusion. Despite its prominence, Soviet futures research has a somewhat uncertain future; further growth will depend both on its own achievements and on any realignment of official policy which may come with the inevitable leadership changes in the Kremlin.     

Price Discrimination and Efficient Distribution

This paper focuses on third‐degree price discrimination by an upstream firm with some degree of monopoly power. Downstream firms fall into two categories: efficient and inefficient, according to their relative costs of transforming a unit of the upstream good into a unit of final product. Under ordinary static conditions, price discrimination favors the inefficient firms, which have more elastic demands. We consider, however, the possibility that discrimination in the opposite direction can alter the downstream market structure toward greater efficiency. Discriminatory pricing, then, involves charging a higher price to the less efficient firms. Such pricing is shown to be both potentially profitable for the upstream firm and welfare improving as average consumer prices fall.     

Illusion of control and the pursuit of authority

We measure participants’ willingness to pay for transparently useless authority—the right to make a completely uninformed task decision. We further elicit participants’ beliefs about receiving their preferred outcome if they make the decision themselves, and if another participant makes the decision for them. We find that participants pay more to make the decision themselves if they also believe that they can thus increase the probability of getting their preferred outcome. Illusion of control therefore exists in a controlled laboratory environment with monetary incentives and is connected to peoples’ pursuit of authority.     

From Decision Support to Decision Automation: A 2020 Vision

The authors discuss the long-run future of decision support systems in marketing. They argue that a growing proportion of marketing decisions can not only be supported but may also be automated. From a standpoint of both efficiency (e.g., management productivity) and effectiveness (e.g., resource allocation decisions), such automation is highly desirable. The authors describe how model-based automated decision-making is likely to penetrate various marketing decision-making environments and how such models can incorporate competitive dynamics. For example, the authors foresee that close to full automation can ultimately take place for many decisions about existing products in stable markets. Partial automation could characterize decision making for new products in stable markets and existing products in unstable markets.