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1.
In this paper, we consider third-degree price discrimination in two markets in the presence of asymmetric consumption externalities;
we establish that under plausible conditions, a firm reduces its price in the market with low price elasticity of demand.
The firm can increase its profits by reducing the price for these consumers and enlarging the demand for other consumers,
provided that positive consumption externalities exist. Moreover, we show that third-degree price discrimination enhances
not only the firm’s profit but also total consumer surplus.
相似文献
Tatsuhiko NariuEmail: |
2.
Julian Villanueva Pradeep Bhardwaj Sridhar Balasubramanian Yuxin Chen 《Quantitative Marketing and Economics》2007,5(2):99-129
Researchers and business thought leaders have emphasized that firms must think and act with a long-term horizon when managing
customer relationships. We demonstrate that, in contrast to this widely held view, profits in competitive environments may
be maximized when firms ignore the future and instead maximize period-by-period profits from customers. Intuitively, while
a long-term focus yields more loyal customers, it greatly increases short-term price competition to gain and keep customers.
Consequently, overall firm profits and customer lifetime value may be lower when firms directly maximize multi-period profits
from customers. Specifically, we analyze a model with segment-level pricing where firms in a duopoly can choose between period-by-period
and multi-period profit maximization and demonstrate that, in many cases, a symmetric focus on period-by-period profit maximization
emerges as the Pareto-dominant Nash equilibrium. We extend the model in two directions. First, we demonstrate that this superiority
of the short-term focus endures even when a revenue expansion effect applies—that is, when customer loyalty leads to enhanced
revenues. Second, we examine the case where customers are strategic and incorporate the long-term implications of their choices
into their decision-making. Here we demonstrate that it may pay for firms to be myopic even when customers are strategic.
The focus on multi-period surplus makes customers less price sensitive to price variations at the early stage of the game.
Consequently, the focus on maximizing period-by-period profits enables the firms to charge higher upfront prices and leverage
this lower price sensitivity into higher profits. Overall, our results highlight the paradox that, when it comes to managing
customer relationships in competitive environments, a short-term focus may constitute the optimal long-term strategy.
相似文献
Yuxin Chen (Corresponding author)Email: |
3.
Bing Jing 《Quantitative Marketing and Economics》2007,5(1):35-61
In this paper, we extend the Varian (1980) model to examine endogenous quality differentiation by firms, with a particular
emphasis on the interplay between the firms’ product quality decisions and the ensuing price rivalry. Specifically, we assume
that the price-sensitive (or informed) consumers hold a lower valuation for product quality than the brand-loyal (or uninformed)
consumers. It is shown that the firms will choose differentiated qualities for a broad class of consumer utility functions
and production technologies. We obtain two results. First, the equilibrium quality choices are efficient as they are also
the welfare-maximizing qualities chosen by a social planner. The equilibrium qualities are as if one firm serves only its
loyal consumers and the other serves only the price-sensitive consumers, even though they each serve both types of consumers
(at least for some fraction of time). Second, the firm choosing the lower quality makes greater profits and also prices more
aggressively, in the sense that it maintains a lower maximum price and offers discounts more often. The lower-quality product
is more profitable because it yields higher social surplus when consumed by the price-sensitive consumers.
相似文献
Bing JingEmail: |
4.
Presented is an approach to classify a brand’s buyers into groups with varying degrees of loyalty along a continuum from “hard-core
loyal” to “hard-core switcher.” A taxonomy is developed based on the joint use of stated consideration set and brand-switching
data. In an empirical application to the automobile industry, classic stochastic models such as Grover-Srinivasan (J Mark
Res 24:139–153, 1987) and Colombo-Morrison (Mark Sci 8(1):89–99, 1989), which attempt to recover the heterogeneity existing
in the switching matrix overstate the number of hard-core loyals (buyers who repurchase with probability one) by 48% and 67%,
respectively. The proposed taxonomy illuminates the sources of the overestimation and provides insights into the brand health
of competing automotive makes.
相似文献
Donald G. MorrisonEmail: |
5.
The competitive nature of today’s business-to-business markets requires companies to continually look for ways to reduce costs;
one of the easiest of which is to demand price reductions from suppliers. In this research, price reduction demands and the
corresponding concessions given by 238 suppliers to the six major North American Automotive original equipment manufacturers
during 2001–2007 are analyzed utilizing a simultaneous equation model. The three stage least squares estimates indicate that
suppliers are willing to give higher price concessions when buyers align specific interfacing characteristics and processes
with their suppliers so that the suppliers perceive greater opportunities for future business and profit. These results provide,
for the first time, an understanding of the dynamic nature of the impact of buyer–supplier relational components on supplier
price concessions.
相似文献
John W. Henke Jr.Email: |
6.
Firms can approach advertising competition either by setting advertising budgets (as in the percentage of sales method) or
target sales levels (as in the objective and task approach). We study firms’ incentives to adopt one or the other posture
using a two-stage model of duopolistic competition. In the first stage, each firm chooses to commit either to an advertising
budget, letting its sales follow from the market response function, or to a desired sales level, promising to adjust its advertising
spending accordingly. In the second stage, firms choose the actual levels of their advertising budget or sales target. When
prices are exogenous, we show that, due to strategic effects, if a firm benefits from its rival’s advertising (as when advertising
increases awareness of the product category) then setting an advertising budget dominates setting a sales target. On the other
hand, if a firm is harmed by its rival’s advertising (as when advertising increases the firm’s share of a fixed market), then
committing to a sales level dominates. We extend these results in several directions and show that when firms engage in price
competition as well as advertising the nature of advertising and product-market competition interact to determine whether
setting an advertising budget or sales target dominates.
相似文献
Amit Pazgal (Corresponding author)Email: |
7.
Ron Borzekowski Raphael Thomadsen Charles Taragin 《Quantitative Marketing and Economics》2009,7(2):147-179
This paper examines whether mailing list sellers, when faced with additional competitors, are more likely to try to segment
consumers by offering additional choices at different prices (second-degree price discrimination) and/or offering different
prices to readily identifiable groups of consumers (third-degree price discrimination). We utilize a dataset that includes
information about all consumer response lists derived from mail order buyers (i.e. lists derived from catalogs) available
for rental in 1997 and 2002. Our results indicate that increased competition leads to an increased propensity to price discriminate
along each of the dimensions we investigate. These results hold for both second-degree and third-degree price discrimination.
Further, list owners offer menus with more choices in more competitive markets. These results, taken together with results
from other empirical studies, suggest that the connection between competition and increased price discrimination is a result
that applies broadly.
相似文献
Raphael ThomadsenEmail: |
8.
In this paper we use Nielsen scanner panel data on four categories of consumer goods to examine how TV advertising and other
marketing activities affect the demand curve facing a brand. Advertising can affect consumer demand in many different ways.
Becker and Murphy (Quarterly Journal of Economics 108:941–964, 1993) have argued that the “presumptive case” should be that
advertising works by raising marginal consumers’ willingness to pay for a brand. This has the effect of flattening the demand curve, thus increasing the equilibrium
price elasticity of demand and the lowering the equilibrium price. Thus, “advertising is profitable not because it lowers
the elasticity of demand for the advertised good, but because it raises the level of demand.” Our empirical results support
this conjecture on how advertising shifts the demand curve for 17 of the 18 brands we examine. There have been many prior
studies of how advertising affects two equilibrium quantities: the price elasticity of demand and/or the price level. Our
work is differentiated from previous work primarily by our focus on how advertising shifts demand curves as a whole. As Becker and Murphy pointed out, a focus on equilibrium prices or elasticities alone can be quite misleading. Indeed, in
many instances, the observation that advertising causes prices to fall and/or demand elasticities to increase, has misled
authors into concluding that consumer “price sensitivity” must have increased, meaning the number of consumers’ willing to
pay any particular price for a brand was reduced—perhaps because advertising makes consumers more aware of substitutes. But,
in fact, a decrease in the equilibrium price is perfectly consistent with a scenario where advertising actually raises each
individual consumer’s willingness to pay for a brand. Thus, we argue that to understand how advertising affects consumer price
sensitivity one needs to estimate how it shifts the whole distribution of willingness to pay in the population. This means
estimating how it shifts the shape of the demand curve as a whole, which in turn means estimating a complete demand system for all brands in a category—as we do here. We estimate demand systems
for toothpaste, toothbrushes, detergent and ketchup. Across these categories, we find one important exception to conjecture
that advertising should primarily increase the willingness to pay of marginal consumers. The exception is the case of Heinz
ketchup. Heinz advertising has a greater positive effect on the WTP of infra-marginal consumers. This is not surprising, because
Heinz advertising focuses on differentiating the brand on the “thickness” dimension. This is a horizontal dimension that may
be highly valued by some consumers and not others. The consumers who most value this dimension have the highest WTP for Heinz,
and, by focusing on this dimension; Heinz advertising raises the WTP of these infra-marginal consumers further. In such a
case, advertising is profitable because it reduces the market share loss that the brand would suffer from any given price
increase. In contrast, in the other categories we examine, advertising tends to focus more on vertical attributes.
相似文献
Baohong SunEmail: |
9.
Innovation in SMEs exhibits some peculiar features that most traditional indicators of innovation activity do not capture.
Therefore, in this paper, we develop a structural model of innovation that incorporates information on innovation success
from firm surveys along with the usual R&D expenditures and productivity measures. We then apply the model to data on Italian
SMEs from the “Survey on Manufacturing Firms” conducted by Mediocredito-Capitalia covering the period 1995–2003. The model
is estimated in steps, following the logic of firms’ decisions and outcomes. We find that international competition fosters
R&D intensity, especially for high-tech firms. Firm size and R&D intensity, along with investment in equipment, enhances the
likelihood of having both process and product innovation. Both these kinds of innovation have a positive impact on firm’s
productivity, especially process innovation. Among SMEs, larger and older firms seem to be less productive.
相似文献
Jacques MairesseEmail: |
10.
In mixed price bundling, the consumer has the choice of buying the individual products separately, as part of a bundle with
a discounted price, or not purchasing them at all. Framing effects refer to how the price of the bundle is presented to the
consumer. Past studies have focused on perceptual measures and aggregate level results, and have only looked at a subset of
different types of price framing in any one study. In this paper we use discrete choice data to investigate whether price
framing affects choice in mixed price bundles. We find that the joint, integrated frame results in the highest proportion
of respondents choosing the bundle and the fewest choosing “none.” When the prices of items in a bundle are itemized, some
consumers are more likely to compare prices separately to their reference prices to evaluate the attractiveness of the deal,
but this actually reduces the probability of purchasing the bundle. However, the majority of consumers do not use reference
prices and instead follow a simple economic choice model.
相似文献
Joel E. UrbanyEmail: |
11.
Ke-Wei Huang 《Quantitative Marketing and Economics》2009,7(3):321-341
This paper investigates how a monopoly seller should determine the optimal set of pricing variables (pricing metrics) for
third-degree price discrimination applications in which buyers have log-normally distributed willingness-to-pay (WTP). In
a setup that closely resembles linear and probit regressions, this paper shows that when the monopoly seller is restricted
to using one metric and no price discrimination cost exists, the pricing metric that best reduces the residual variance of
buyers’ willingness-to-pay is the one that maximizes revenue. Equivalently, the explanatory power of willingness-to-pay is
the ordering criterion. This paper also shows that this criterion is not universally true when willingness-to-pay follows
other distributions. When the seller incurs price discrimination costs associated with different metrics, the ordering criterion
becomes the explanatory power of each pricing metric divided by its cost. This paper also discusses how to apply this model
to solve real-world pricing problems with contingent valuation models or using probit regression.
相似文献
Ke-Wei HuangEmail: |
12.
Michaela Draganska Michael Mazzeo Katja Seim 《Quantitative Marketing and Economics》2009,7(2):105-146
This paper investigates empirically the product assortment strategies of oligopolistic firms. We develop a framework that
integrates product choice and price competition in a differentiated product market. The present model significantly improves
upon the reduced-form profit functions typically used in the entry and location choice literature, because the variable profits
that enter the product-choice decision are derived from a structural model of demand and price competition. Given the heterogeneity
in consumers’ product valuations and responses to price changes, this is a critical element in the analysis of product assortment
decisions. Relative to the literature on structural demand models, our results show that incorporating endogenous product
choice is essential for policy simulations and may entail very different conclusions from settings where product assortment
choices are held fixed.
相似文献
Katja SeimEmail: |
13.
When auction meets fixed price: a theoretical and empirical examination of buy-it-now auctions 总被引:2,自引:0,他引:2
Recently fixed pricing and auctions have been brought together in a new pricing format that offers bidders the option of prematurely
ending an auction at a fixed price. The growing popularity of auctions presents an interesting pricing decision for managers:
whether to sell at a fixed price, in a regular auction, or through a buy-it-now auction. This paper studies eBay’s buy-it-now
auction and answers the following research questions: why is fixed price used at traditional auctions, will buy-it-now increase
the seller’s profit, how is an optimal price determined, and how is the buy-it-now decision influenced by key factors such
as the customer’s cost of participating in the auction, the seller’s reserve price, and the number of potential customers.
Our results show that when customers make endogenous participation decisions according to their participation costs, buy-it-now
auctions can increase both customers’ utility and sellers’ profit. Endogenous participation has important implications for
seller’s pricing decisions such as price formats and levels. Depending on the level of the posted price, the resulting price
format could be either fixed price, buy-it-now auction or pure auction. Therefore, the seller needs to be careful and take
into account market conditions when posting a price at auctions. We empirically test the model assumptions and predictions
using data collected from eBay.
Electronic supplementary material The online version of this article (doi:) contains supplementary material, which is available to authorized users.
相似文献
Electronic supplementary material The online version of this article (doi:) contains supplementary material, which is available to authorized users.
Kannan SrinivasanEmail: |
14.
Grey Power: An Empirical Investigation of the Impact of Parallel Imports on Market Prices 总被引:1,自引:0,他引:1
Steve Thompson 《Journal of Industry, Competition and Trade》2009,9(3):219-232
The persistence of price discrimination across international markets with falling costs of unofficial importing is both paradox
and policy concern. E-commerce facilitates a “grey” market in parallel imports, particularly for high-value goods such as
electronics. This paper explores the impact of unofficial imports on price using a panel of product markets mediated via an
Internet shopbot. It finds the presence of an import model lowers prices across the market. However, unlike the refurbished
model it is not simply an inferior substitute. The import price discount increases over the model life cycle, suggesting that
model-specific preferences fall as each model ages.
相似文献
Steve ThompsonEmail: |
15.
Israel M. Kirzner 《Small Business Economics》2009,32(2):145-152
Israel M. Kirzner is the 2006 winner of The International Award for Entrepreneurship and Small Business Research (the FSF-Nutek Award). In this Prize Lecture he argues that a number of those who have commented on his work have misunderstood
certain aspects of his theoretical system, and as a result the common distinction in the literature between “Schumpeterian”
and “Kirznerian” entrepreneurs is flawed. He also argues that his understanding of the market process (set in motion by entrepreneurial
decisions) provides a theoretical underpinning for public policy vis-à-vis entrepreneurship. Professor Kirzner’s main contributions
to the economics of entrepreneurship were also presented and evaluated by Douhan et al. [Small Business Economics 29(1–2):213–223,
2007].
相似文献
Israel M. KirznerEmail: |
16.
Junji Xiao 《Marketing Letters》2008,19(2):171-181
This paper examines the characteristics attributed to the success of digital cameras by studying both the demand and the supply
sides of the digital-camera market. A discrete choice model is employed to investigate consumer preferences over digital camera
characteristics during the period 1996–1998. The empirical findings reveal that Sony’s ‘Easy-to-Use’ storage system contributes
significantly to Sony’s demand advantage and profitability. Also, the welfare analysis demonstrates that ‘Easy-to-Use’ attributes
significantly contribute to social welfare improvement.
相似文献
Junji XiaoEmail: |
17.
This paper investigates whether small businesses face financial constraints that affect their survival. A model of moral hazard
is developed in which financial constraints arise endogenously. The model predicts that higher private assets relax financial
constraints and have a positive effect on the firm’s probability of survival. The empirical analysis confirms that the entrepreneur
has a higher propensity to stay in business when she inherits capital. This effect is particularly strong for entrepreneurs
who switch from self-employment into wage employment.
相似文献
Oleksandr TalaveraEmail: |
18.
Managing the shipment of goods to consumers is one of the central aspects of retail competition on the internet. In this article, we analyze internet retailers’ shipping strategies using data from the internet book retailing industry. We find that, controlling for a variety of observable firm characteristics, firms with lower product prices offer lower shipping fees and higher quality shipping in terms of average delivery time, compared to firms with higher product prices. These patterns cannot be readily reconciled with a large class of models of competition under perfect consumer information. Theories based on imperfect consumer information can explain the findings better.
相似文献
Han LiEmail: |
19.
Jeff Hearn Marjut Jyrkinen Rebecca Piekkari Eeva Oinonen 《Journal of Business Ethics》2008,83(1):41-54
This article addresses the intersections, even blurrings, of two “homes” and two “aways” – the personal, ‹private’ home and
the corporate ‹public’ ‹away’, and the national home country and corporate base and the transnational work away. Drawing on
40 semi-structured interviews with women and men top and middle managers in seven multinational corporations located in Finland,
we examine the complex relations among transnational managerial work, corporate careers and personal, marriage and family-type
relations, and their differences for women and men managers. This shows the very different personal and social worlds inhabited
by senior women and men managers, and how transnational processes can make those differences even greater.
相似文献
Eeva OinonenEmail: |