Price matching and product differentiation strategies considering showrooming

Showrooming, a phenomenon in which customers use brick-and-mortar stores to assess products and then purchase them from online retailers (o-retailers) for lower prices, is considered a great threat to traditional retailers (t-retailers). To combat showrooming, many t-retailers have executed price matching which enables customers to pay o-retailers' lower prices for the identical product. To avoid direct competition with t-retailers who execute price matching, many o-retailers have begun to sell differentiated products from t-retailers, which weakens the information advantage to customers from practicing showrooming. Motivated by these observations, we construct a duopoly game, where a t-retailer and an o-retailer sell products in a same category, to study the profitabilities of product differentiation and price matching in the context of showrooming. The results show that in the scenario without price matching, the o-retailer is likely to benefit from product differentiation only when the o-retailer's differentiated product is more popular with customers than the t-retailer's product. However, in the price matching scenario, the o-retailer also has the opportunity to benefit from product differentiation when the o-retailer's differentiated product is less popular with customers than the t-retailer's product, and product differentiation can be a win-win strategy for the two retailers under certain conditions. Considering the o-retailer's product differentiation decision, the t-retailer is only likely to execute price matching if the non-digital attributes of the product category sold by two retailers are not very obvious.     

Financial returns to collecting rare political economy books

Rare books of political economy are eminently collectable. Using historical prices, I employ hedonic regressions to estimate financial returns to collecting the works of ten eminent political economists and develop a price index for this corpus of collectables. For the observation period 1975–2019, I find that in those 45 years investing in rare political economy books yielded an average annual real rate of return of 2.8%, which is well in line with the returns to collecting rare books of classical literature. Compared with other collectibles such as fine art, investing in rare books turns out to be financially more profitable.     

Fairness perception of ancillary fees: Industry differences and communication strategies

This study examines fairness perception of ancillary fees across different industries, and ways to communicate ancillary fees in a way that reduces customers' feeling that they are being unfairly treated. Through surveys and consumer experiments, we show that consumers’ perception of fairness decreases as the level of ancillary fees increases, with differences across industries. Also, when the customer is given a cue that the ancillary fees are necessary for low base prices, fairness perception increases, explained by the “dual entitlement” concept. Another effective communication strategy is early disclosure, as opposed to late disclosure which decreases fairness perception and willingness to recommend.     

Trading activity and price discovery in Bitcoin futures markets

This study examines the impact of trading activities on price discovery in the Bitcoin futures markets. We find that trades of hedgers are positively correlated with the modified information shares in both CME and CBOE futures markets, suggesting that their trading promotes futures market efficiency. Retailers’ trading activity relates negatively to the price discovery of the CME Bitcoin futures and thus destabilizes the market. Speculators exert positive (negative) impact on the price discovery in the CME (CBOE) Bitcoin futures. Our finding that CME’s Bitcoin futures exhibit superior price discovery than CBOE’s provides plausible justification for CBOE’s decision in March 2019 to suspend further listings of Bitcoin futures contracts.     

股价信息含量与投资-股价敏感性——基于融资融券的准自然实验

本文利用2006-2015年间的数据研究了融资融券对投资-股价敏感性的影响。利用融资融券作为股价信息含量的一个外生冲击变量,本文研究发现,我国A股市场确实存在反馈效应,融资融券政策的实施增强了标的公司投资-股价敏感性,这个结论在采用倾向得分模型(PSM)配对后依然成立,说明融资融券使股价融入了更多有利于管理层投资决策的信息。其次,融资融券对投资-股价敏感性的影响在机构投资者比例高、流动性高、处于新兴行业的这类管理层反馈效应更强的股票组中更显著。参照以往研究考虑了融资约束对反馈效应的调节作用,同样发现融资融券对投资-股价敏感性的影响在国有企业和规模较大的企业组中更显著。最后,融资融券交易规模越大,投资对股价的敏感性越强。     

Are USDA reports still news to changing crop markets?

This study investigates whether major USDA reports still provide important news to changing crop markets. The news component of each report, or market “surprise,” is measured as a difference between the USDA estimate and its private expectation in corn, soybeans, and wheat markets. Changes in the relevance of USDA information are assessed by examining changes in the magnitude of market surprises and shifts in the futures price reaction to these surprises, which isolates the impact of each report. The stable size of market surprises over time suggests that competition from alternative data sources has not reduced the news component of USDA crop reports. Increasing price reaction to most reports, including those facing competition from alternative information sources, suggests that value of public information may be enhanced in uncertain markets affected by structural changes.     

山高皇帝远:地理距离与上市公司股价崩盘风险的经验证据

鉴于信息不对称程度、制度实施成本和心理文化差异，文章提出"监管距离"假说，认为监管者和被监管者之间距离远近可以影响监管效果。实证分析中国沪深上市公司数据，文章从非对称风险视角出发，研讨了上市公司注册地距所在地中国证监会派出机构的地理距离对公司层面的股价崩盘风险的影响。我们发现，监管机构与上市公司总部的地理距离越远，该上市公司股价的崩盘风险越大。进一步分析发现，如果开通高铁或者上市公司所在地社会信任水平足够高，那么监管距离和崩盘风险的正相关关系是不显著的；如果监管负担严重或政府效率低下，那么监管距离和崩盘风险之间正相关关系更为显著。文章认为，地理距离具有监管信息效应、监管威慑效应和监管执行效应，能够影响股价崩盘风险。也就是说，"山高皇帝远"可以改变上市公司行为，提高金融监管效率不应忽视非正式制度的影响。     

Persistence of Price–Cost Margin and Technical Efficiency in the Indonesian Food and Beverage Industry

Abstract

This research investigates the persistence of price–cost margin (PCM) and technical efficiency (TE) of firms and the relation between these two factors in 44 subsectors of the Indonesian food and beverage industry in the period 1980–2014. Data envelopment analysis with a bootstrapping approach is applied to estimate TE. An autoregressive model, accounting for endogeneity, is applied to estimate the persistence coefficients of PCM and TE. A cross-sectional regression model is also applied to estimate the relation between the persistence of the PCM and the persistence of TE. The results show that for these food and beverage firms, high PCM and low TE persist. Furthermore, the persistence of PCM negatively affects the persistence of TE in the industry.     

China and international market integration: Evidence from the law of one price in the Middle East and Africa

We model market integration in the Middle East and Africa by analyzing price dispersion and testing the law of one price (LOP) on highly-comparable actual local retail prices of 135 goods and services across 23 countries in the region over the period of 1990–2016. Second-generation panel estimators are applied to four price benchmarks: Regional average, South Africa, China, and US prices. Cross-regional price dispersion diminishes considerably over time up to 2008, particularly for non-tradeables around China price. The test of LOP indicates the percentage of convergent prices is highest in China price benchmark, followed by US, South Africa, and regional average benchmarks. Direct estimation of the convergence speed confirms this order. Overall, the results show evidence of increasing market integration in Middle East and Africa but it appears to be driven by global forces and, especially, the rise of China as a new economic power. The results show that some emerging market economies, such as China, can step up and promote integration while traditional economic powerhouses, such as the USA and UK, disengage from international economic relations.     

Effect of Price Change Alert on Perceptions of Hotel Attribute-based Room Pricing (ABP) versus Traditional Room Pricing (TRP)

Aside from marketing information on traditional room rates, hotels and online travel agents (OTAs) are trying a new pricing technique based on the attributes of guestrooms. This research investigates how attribute-based room pricing (ABP) differs from traditional room pricing (TRP) in influencing consumer reactions when consumers receive a price change alert before (vs. after) sales. Through a series of experiments, we found that TRP and ABP result in similar alert attitude, brand attitude, and visit intention for presale price change alert. However, ABP leads to more favorable results for postsale price change alert. We examined the underlying mechanism and found that perceived fairness mediates the effect of pricing strategy on brand attitude, price alert attitude, and visit intention for postsale alert only. This research provides hotel managers and OTA marketers with guidance on when to send either type of price change message to consumers.