The Cost of Inaccurate Consumer Information: The Case of the EPA Mileage Figures

The EPA fuel economy estimates for automobiles are an important instrument of public policy and are widely publicized. However, the accuracy of these figures, for use by consumers as an estimate of actual on-the-road mileage, has come under increasing challenge. Consumers Union provides alternative fuel efficiency estimates for the cars it tests, based on actual on-the-road driving. This study calculates the costs of in-accuracies in the EPA's Estimated Mileage, assuming consumers use those figures in making their automobile purchase decisions, but in actual driving achieve mileage equivalent to the Consumers Union's figures. The economic impact includes potentially large unanticipated additional expenditures on gasoline by consumers and in a few cases unexpected gasoline savings; also included is a net social welfare loss due to allocative error. This loss provides a measure of the gains to society obtainable from improvements in the reliability of the EPA estimates as a source of mileage information for consumers.     

Information overload and fake news sharing: A transactional stress perspective exploring the mitigating role of consumers’ resilience during COVID-19

The spread of fake news in social networks has become a major concern for various sectors of society, including retail and service providers, some of whom have suffered from decreasing sales due to misinformation consumers shared online. The current COVID-19 crisis has added to the surrounding hysteria, as fake news during crises can heighten negative behavioural responses in consumers, such as irrational panic buying or taking false medical precautionary measures. In fact, driven by the ubiquitous social media landscape, the dissemination of misinformation and the overarching overabundance of information have been major challenges of the pandemic. Given that current research offers little insight into the processes behind the sharing of fake news among consumers and that research on consumer-centred mitigating mechanisms is missing, this study explores the relationship between information overload, fake news sharing, and the overlooked concept of consumers' resilience as a potential shield as viewed through the lens of the current crisis. Structural equation modelling is applied to cross-sectional data from 241 social media users. Drawing from theories of transactional stress and psychological resilience, it is demonstrated that information overload leads to an increased likelihood of fake news sharing by increasing consumers' psychological strain. Furthermore, the study shows that consumers' resilience has the power to mitigate the drastic effects of this negative chain of influence by inhibiting each of the processual components. The results have important implications extending beyond crises. Measures should be taken to enhance consumers’ resilience amidst technology-induced stressors while altering the information environment confronting consumers.     

区域商贸流通发展与公路交通水平计量分析

基于灰色关联模型的计量分析,发现地区商贸流通业发展与公路交通基础设施水平具有较强的关联性:在公路里程、公路客运量、公路货运量和民用汽车拥有量中,民用汽车拥有量是最重要的影响因素,公路货运量次之;在社会消费品零售总额、市的零售额、县的零售额、县以下的零售额、批发和零售业零售额、住宿和餐饮业零售额中,公路交通基础设施对县以下的零售额的影响程度最大,对批发和零售业零售额的影响程度次之。     

Laffont and Tirole's Competition in Telecommunications : A View From the US

This article briefly reviews Competition in Telecommunications by Laffont andTirole (2000); it presents the major conclusions of the book and corrects certain errors. In addition, this article treats related topics, some specific to the US telecommunications industry. In US telecommunications access to incumbents facilities are priced based on cost model estimates. Several of the important sources of misunderstandings of telecommunications costs and cost estimates are described including: multiple meanings of 'access,'meanings of cross-subsidy; nature of loop costs; the many dimensions of marginal costs in telecommunications, misuses of long-run cost concepts; and misuses of 'most efficient' provider assumptions. The methods of cost calculations and legal and regulatory requirements in the US are described, as are the implications for incentive regulation, changing technology, efficient pricing, and measures of efficient competitive entry.     

Revised CSI and Australian consumers: incorporating ‘innovation’ and ‘automobile purchases’

The first objective of this study was to identify Australian consumers' decision-making styles for automobile purchases. Second, adding an innovation consciousness scale to the original consumer styles inventory (CSI) to assess Australian consumers' car purchase behaviour. Based on a sample of 214 respondents from Australian automobile consumers, exploratory and confirmatory factor analysis was conducted on Sproles and Kendall's (1986) CSI adapted for automobile purchases. As such, the validity of the CSI in the context of high-involvement purchases was tested. The results found that only two factors, ‘brand’ and ‘habitual consciousness’, of the original model were retained and other factors such as ‘investigation process’, ‘information search’, ‘value within budget’ and ‘innovation consciousness’ factors were confirmed for automobile purchase decision-making styles. ‘Innovation consciousness’ was proven to be one of the most reliable and valuable scales for automobile purchase decision-making styles in relation to Australian consumers. The paper also discusses suitable marketing strategies for automobile consumers in Australia. The current research should prove valuable not only to academic researchers but also to automobile companies/managers. The findings will also provide insight into how automobile companies could position themselves with respect to their marketing strategies in Australia.     

汽车废气排放的成因、危害与对策

汽车在大量消耗资源的同时，其排放的尾气会严重地影响人类的健康。随着国家一系列强制性法规的出台，更多人开始关注汽车的尾气问题。阐述了汽车排放污染物的主要成分、汽油车尾气排放的成因及危害和柴油车排放碳烟的生成机理；指出了废气污染物的生成及其影响因素，同时提出了内燃机排放的采样方法及防止汽车尾气超标的对策。     

Who is exposed to gas prices? How gasoline prices affect automobile manufacturers and dealerships

Many consumers are keenly aware of gasoline prices, and consumer responses to gasoline prices have been well studied. In this paper, by contrast, we investigate how gasoline prices affect the automobile industry: manufacturers and dealerships. We estimate how changes in gasoline prices affect equilibrium prices and sales of both new and used vehicles of different fuel economies. We investigate the implications of these effects for individual auto manufacturers, taking into account differences in manufacturers’ vehicle portfolios. We also investigate effects on manufacturers’ affiliated dealership networks, including effects implied by the changes in used vehicle market outcomes.     

Effect of Exchange Rates and Gasoline Prices on US Imports of Japanese Automobiles

We analyze the effects of gasoline prices and exchange rates on Japanese automobile imports to the United States between 1970 and 2004. We test the relationships before, during, and after the Voluntary Restraint Agreement placed on Japanese imports between 1981 and 1988. We also control for general demand for automobiles and domestically manufactured Japanese vehicles. As expected, we found that demand for Japanese imports is positively correlated with the price of gasoline. Before 1988 the demand for Japanese imports contributed to a strengthening of the yen. But after, a positive relationship between the yen-for-dollar exchange rate and imports has prevailed.     

Perceived value,transaction cost,and repurchase-intention in online shopping: A relational exchange perspective

This study proposes a framework to understand the impacts of both value-related and transaction cost-related factors on repurchase intention from online shoppers' perspective. In particular, this study defines the construct of cost as a three-component conceptualization (i.e., information searching cost, moral hazard cost, and specific asset investment). Based upon empirical evidence on a survey of 887 online shoppers, this study shows that consumers' perceived value and each cost component are positively related to repurchase intention. Importantly, information searching cost exerts the most significant influence on repurchase intentions among the four relational factors. The result suggests that providing sufficient cues to reduce consumers' information searching cost is the core element of repurchase intention formation. This article closes with theoretical and practical implications.     

Mobile Advertising: An Empirical Study of Temporal and Spatial Differences in Search Behavior and Advertising Response

Using clickstream panel data from an automobile ad campaign conducted on a mobile platform, we investigate the relevance of mobile advertising, the interrelationships between ad content, information search behavior, and advertising response. Temporally, we compare mobile users' search behavior and advertising response before and during a focal campaign event of an automobile show. Spatially, we examine their search behavior and advertising response in relation to their proximity to the show's location. Estimation results from individual-user random effects binary Logit and Poisson count models show that users' responses to mobile advertising are related to the depth and breadth of search and the ad content. While informative and persuasive ad content exhibits differential non-linear effects on the depth and breadth of search, they have similar effects on advertising response. Interestingly, spatial and temporal proximity of mobile ad campaigns may not lead to increased relevance of mobile campaigns; it depends on the type of ad content and the type of measure used to assess relevance.     

Shipping cost and development of the landlocked developing countries: Panel evidence from the common correlated effects approach

We estimate the impact of shipping cost on development for landlocked developing countries (LLDCs). Since container trade is important to them, we construct a country-specific measure of shipping cost, called HarpexCost, which combines the global cost of container shipping with information on how exposed to container shipping each LLDC is. We employ the common correlated effects (CCE) estimator of Pesaran (Econometrica, 2006; 55: 967) to first estimate the impact of HarpexCost on the LLDCs’ development, and then recover the actual impact of shipping cost from these estimates. Overall, we observe that shipping cost has large negative effects on the LLDCs. Building upon these results, we provide new estimates on the cost of landlockedness and how trade benefits their development.     

As a Chinese saying goes, ‘To get rich,first pave the way’: The opening of high-speed rail and automobile consumption in China

The impact of high-speed rail (HSR) opening on residents' automobile consumption behavior is an economic issue that deserves attention. Based on monthly data on the opening of high-speed rail and the registration of automobiles in China's prefecture-level cities from 2008 to 2015, this paper uses the quasinatural experiment of high-speed rail opening, and the time-varying difference-differences (DID) method is used to analyze the impact and mechanism of the opening of China's high-speed rail on the automobile consumption behavior of consumers in prefecture-level cities. These research results show that the opening of high-speed rails significantly promotes consumers' purchase of automobiles. Specifically, it has a significant impact on the vehicle's brand (prefer joint venture brands) and color (prefer hue automobiles) as well as the payment method (prefer full payment). Furthermore, the expected increase in residents' income due to the opening of high-speed rail stimulates the sense of financial well-being (mediating mechanism), which in turn has an impact on the abovementioned automobile consumption behavior. These novel findings have a positive impact and significance on the national high-speed rail strategy, consumers' well-being, and the production and marketing strategies of automobile companies.     

Misinformation,disinformation, and fake news: Cyber risks to business

Misleading information is an emerging cyber risk. It includes misinformation, disinformation, and fake news. Digital transformation and COVID-19 have exacerbated it. While there has been much discussion about the effects of misinformation, disinformation, and fake news on the political process, the consequences of misleading information on businesses have been far less, and it can be argued insufficiently, examined. The article offers a primer on misleading information and cyber risks aimed at business executives and leaders across an array of industries, organizations, and nations. Misleading information can have a profound effect on business. I analyze different misleading information types and identify associated cyber risks to help businesses think about these emerging threats. I examine in general the cyber risk posed by misleading information on business, and I explore in more detail the impact on healthcare, media, financial markets, and elections and geopolitical risks. Finally, I offer a set of practical recommendations for organizations to respond to these new challenges and to manage risks.     

Consumer Information and Discrimination: Does the Internet Affect the Pricing of New Cars to Women and Minorities?

Using a large dataset of automobile transaction prices, we find that offline African-American and Hispanic consumers pay approximately 2% more than do other offline consumers; however, we can explain 65% of this price premium with differences in observable traits such as income, education, and search costs. Our estimates of unexplained race premia are smaller than previous estimates in the literature. Online, we find that minority buyers pay nearly the same prices as do whites controlling for consumers' income, education, and neighborhood characteristics. These results are consistent with the Internet facilitating information search and removing cues to a consumer's willingness to pay. Our results imply that the Internet is particularly beneficial to those whose characteristics disadvantage them in negotiating.     

Online users' attitudes toward fake news: Implications for brand management

This study examines brands' vulnerability to fake news. The rapid spread of online misinformation poses challenges to brand managers, whose brands are cocreated online, sometimes to the detriment of the brand. There is a need to identify the information sources that are likely to be trustworthy and to promote positive consumer attitudes toward brands. The data for this study were taken from a Flash Eurobarometer of 26,576 respondents across 28 European countries. Cluster analysis and partial least squares structural equation modeling were used to analyze the data and unveil users' attitudes toward fake news. The findings show that users' attitudes toward fake news differ among European countries. Younger and tech-savvy users are more likely to recognize fake news and are consequently able to evaluate digital information sources without relying on policy interventions to limit the impact of fake news. Brand managers can use the findings of this study to better understand different kinds of users' susceptibility to fake news and reshape their social media branding strategies accordingly. It is hoped that this paper will encourage further research on brand management in relation to fake news and promote the widespread adoption of best practices in social media communication.     

Measuring the benefits of foreign product variety with an accurate variety set

Recent studies have used import data to assess the impact of foreign varieties on domestic prices and welfare. We employ a market-based data set on the U.S. automobile market that allows us to define goods varieties at a more precise level, as well as discern location of production and ownership of varieties. Our estimates of price and welfare changes from new varieties in the U.S. automobile sector are twice as large as standard estimates when using our detailed market-based data. We also show that new varieties introduced by foreign-owned affiliates provided an additional 70% welfare gain during our sample.     

Volatility and commodity price dynamics

Commodity prices are volatile, and volatility itself varies over time. Changes in volatility can affect market variables by directly affecting the marginal value of storage, and by affecting a component of the total marginal cost of production, the opportunity cost of producing the commodity now rather than waiting for more price information. I examine the role of volatility in short‐run commodity market dynamics and the determinants of volatility itself. I develop a structural model of inventories, spot, and futures prices that explicitly accounts for volatility, and estimate it using daily and weekly data for the petroleum complex: crude oil, heating oil, and gasoline. © 2004 Wiley Periodicals, Inc. Jrl Fut Mark 24:1029–1047, 2004     

Appliance service and repair

The appliance industry trade journal Appliance reported that during 1989 manufacturers shipped over 55 million major household appliances. Previous studies have explored length of appliance service life for a given household and the economic cost of energy consumption for major appliances. However, limited information is available on availability and cost of maintenance and repairs which affect the total useful life of equipment. Survey results from a study of Nebraska appliance service and repair firms are presented here. This research provides information regarding the distribution and cost of appliance service and repair. The findings serve as current estimates of service and repair information for consumers as well as manufacturers.     

An information-based theory of international currency

This paper develops an information-based theory of international currency based on search frictions, private trading histories, and imperfect recognizability of assets. Using an open-economy search model with multiple competing currencies, the value of each currency is determined without requiring agents to use a particular currency to purchase a country's goods. Strategic complementarities in portfolio choices and information acquisition decisions generate multiple equilibria with different types of payment arrangements. While some inflation can benefit the country issuing an international currency, the threat of losing international status puts an inflation discipline on the issuing country. When monetary authorities interact in a simple policy game, the temptation to inflate can lead optimal policy to deviate from the Friedman rule. The calibrated model can produce a welfare cost of losing international status for the issuing country larger than previous findings, though estimates depend critically on inflation rates and information costs.     

Basket Composition and Choice Among Direct Channels: A Latent State Model of Shopping Costs

Shoppers of multi-channel retailers often place orders using different channels on different shopping occasions. The differential use of channels is related to both basket composition and channel characteristics, such as the ability of the channel to provide additional information that resolves uncertainty about the purchase. In this paper, we examine the impact of basket composition on the choice among direct channels. We develop a two-stage, shopping cost model with two, latent states. Given a shopping basket, the shopper first decides if she needs additional information about items in the basket. If she is uncertain about the items in the basket meeting her needs, she uses an information rich channel, such as the retailer's website or call center, and risk reduction costs become salient in addition to the other shopping costs. If she does not require additional information, she places her order by choosing among all available channels, and she may incur a welfare loss from making a purchase that does not optimally meet her needs. We operationalize welfare loss with Shannon information and various metrics based on purchase history.Our empirical setting is a data set from a catalog retailer that offers multiple direct channels. Our estimates show that basket composition impacts channel choice. Large baskets shift to the Internet channel, suggesting that the Internet channel has lower ordering costs. High-risk baskets shift to call centers and this suggests that the call center has lower risk reduction costs. Collectively these estimates provide evidence for the notion of channel specialization—some channels are better at addressing certain shopping costs compared to others. Our estimates also show that electronic self-service channels have high initial access costs and a significant learning curve compared to the call center suggesting that these channels might be better suited to heavy users. We use the estimated model to quantify the value of channels, to identify categories that need risk reduction, and to segment and target shoppers for Internet ordering based on basket size and the potential to accumulate experience.