Price structure as a marketing variable: An experimental investigation

This study examines the relative impact on preferences of price level and price-structure variables. A pair of four-factor experimental designs were developed to investigate the preferences of students for automobile price structures and recent homebuyers for various price arrangements in buying a house. The findings indicate that, for a majority of the subjects, the structural variables of down payment, interest rate, and monthly payment are more important than price level in determining overall preferences.     

iPhone as a proxy indicator of adaptive narcissism: An empirical investigation

In a consumeristic society, brands have become a signal to the identity and personality of the users. Apple Incorporate has been one of the most successful marketers, of modern times, with its iconic range of “i” devices that have a cult‐like following. The growth of “individualistic” society has also been credited with, as an important reason, for the success of the brand. Societies and people high in terms of individualism also tend to be more narcissistic. This study is an attempt to ascertain whether the use of the Apple iPhone is an indication of Narcissism. The results indicate an overall higher narcissistic score among users and aspirers of iPhone. However, iPhone users exhibit higher scores only in adaptive narcissism—indicative of leadership and authority and not in maladaptive narcissism—indicative of Entitlement Exploitativeness and Grandiose Exhibitionism; in comparison to nonusers. The results of the study have various managerial implications that may range from personality assessment to designing marketing messages and improving employee leadership and authority.     

Price Flexibility as a Two-dimensional Concept and the Volatility of Output

The stabilizing effect of increased price flexibility has been challenged in a series of articles. We show that it is important to distinguish between two different dimensions of flexibility. An increase in the responsiveness of the price level with respect to excess demand may both stabilize and destabilize the economy depending on whether the price level reacts with a lag or whether prices adjust immediately. Hence, the degree of price rigidity in the sense of a delayed price reaction turns out to be of crucial importance for the consequences of an increase in the responsiveness of the price level.     

Price limits,margin requirements,and default risk

This article investigates whether price limits can reduce the default risk and lower the effective margin requirement for a self‐enforcing futures contract by considering one more period beyond Brennan’s (1986) model to take into account the spillover of unrealized residual shocks due to price limits. The results show that, when traders receive no additional information, price limits can reduce the margin requirement and eliminate the default probability at the expense of a higher liquidity cost due to trading interruptions. Consequently, the total contract cost is higher than of that without price limits. When traders receive additional signals about the equilibrium price, we find that the optimal margin remains unchanged with or without the imposition of price limits, a result that is in conflict with Brennan’s assertion. Hence, we conclude that price limits may not be effective in improving the performance of a futures contract. © 2000 John Wiley & Sons, Inc. Jrl Fut Mark 20:573–602, 2000     

Price as a signal of quality: Canada in the international context

Studies have shown that price is very poorly correlated with quality. This paper discusses the methodological criticisms of the earlier work, concluding that the original results remain robust. Examination of 91 sets of Canadian products containing 1020 items reinforces the conclusions of earlier work for the United States and Japan. These international studies contradict the conventional wisdom that price is an adequate signal of quality. We also test the hypotheses that price is a better signal of quality (a) after product tests have been published, and (b) for higher priced items which presumably justify larger investments in search. Canadian data do not support either hypothesis. Some theoretical explanations are outlined and a conclusion briefly presents implications for policy.

---

Der Preis als Qualitätsindikator: Kanadische und internationale Befunde

Zusammenfassung Zahlreiche Untersuchungsergebnisse haben gezeigt, daß Preis und Qualität in einem nur sehr dürftigen Zusammenhang stehen. Diese Befunde sind unter methodischem Gesichtspunkt kritisiert worden, der vorliegende Beitrag versucht jedoch zu zeigen, daß die Befunde robust sind und der Kritik standhalten können. Eine Untersuchung der Autoren anhand von 91 kanadischen Warentests mit 1,020 Artikeln bestätigt darüberhinaus die früheren Ergebnisse aus den Vereinigten Staaten und Japan. Insgesamt widersprechen diese internationalen Untersuchungen der herkömmlichen Ansicht, daß der Preis eines Gutes ein angemessener Qualitätsindikator sei.Darüber hinaus prüft die Studie der Autoren die Hypothese, daß der Preis ein besserer Qualitätsindikator ist, (a) nachdem Warentests durchgeführt und die Ergebnisse publiziert wurden, und (b) wenn es sich um teurere Produkte handelt, die vermutlich einen höheren Suchaufwand rechtfertigen. Beide Hypothesen werden durch kanadische Daten nicht gestützt. Abschließend werden einige verbraucherpolitische Implikationen dieser Befunde behandelt.The authors are grateful to referees for important assistance.

---

---

Richard W. Bodell is Assistant Professor and Robert R. Kerton is Professor in the Department of Economics at the University of Waterloo, Waterloo, Ontario, Canada N2L 3G1. Richard W. Schuster is an economist with the Economics Department of the Bank of Nova Scotia in Toronto.     

Operating leverage as a determinant of systematic risk

Since the development of the capital asset pricing model, a number of studies have examined the effect of a firm's operating leverage on its systematic risk. The essential conclusion of these studies is that operating leverage affects systematic risk through either the contribution margin or unit variable costs. In this paper, the models derived in previous research are refined and extended to demonstrate that, for either a single-product or multiproduct firm, the degree of operating leverage measures the full effect of a firm's operating leverage on its systematic risk. In addition, it is shown that a sales variability measure should also be an important differentiating factor among the systematic risk of common stocks. Thus, the results have important practical implications for financial managers when estimating project or divisional risk for investment decisions, and for security analysts when predicting the systematic risk of common stocks.     

Acceptability of operations as an indicator of corporate social performance

There has been much theoretical debate on issues of business ethics during the last decades, but there has been little research which could concretise the content of these issues in terms of practical business. Although business life must frequently deal with concepts such as corporate social performance, business ethics and the acceptability of operations, the content and meaning of these concepts has remained flexible. In addition, rapid internationalisation and globalisation have introduced a number of new phenomena related to corporate social performance. An attempt at defining the concepts more precisely and searching for a potential indicator was considered necessary in order to concretise the business environment facing corporations engaged in internationalisation and globalisation. The connection between corporate social performance and stakeholder theory provides a basis for the proposal put forward here that acceptability of operation could be employed as an indicator of corporate social performance. This approach was then applied to developing a model which could be used to assess corporate social performance.     

Colluding on a Price Increase

Adopting a general spatial framework, we analyse collusion concerning a price increase between two firms. We find that any variable affects the sustainability of collusion in the same way it affects the competitive profits.     

Price risk in the NYMEX energy complex: An extreme value approach

We estimate tail parameters and construct risk statistics for unconditional distributions of daily logarithmic price changes of the NYMEX energy complex and apply the conditional extreme value method proposed by A. J. McNeil and R. Frey (2000) for estimating VAR and related risk statistics from the tails of conditional distributions for these commodities. The unconditional distribution of spot market price declines is found to be fat tailed relative to the normal for all commodities examined. Backtesting of candidate conditional risk measurement methods indicates that the conditional extreme value method is significantly more accurate for measuring risk exposure due to price declines for 7 of the 10 price series examined. © 2005 Wiley Periodicals, Inc. Jrl Fut Mark 25:309–337, 2005     

Time as a Direct Source of Utility: The Case of Price Information Search for Groceries

A “joint production” model that combines aspects of household production and the economics of information is formulated to explain variation in time spent in price information search for groceries by dual earner households. Enjoyment of search time, a psychological variable, is incorporated into the model. Empirical estimation using grocery expenditure data indicates that enjoyment, income, age, the price of search time, presence of young and teenage children, daily use of a microwave oven, and the percentage of a market basket filled with name brand items are significant factors in explaining variation in time spent in price information search.     

Establishing a Price for Government Services

No abstract available for this article.     

Alcohol as a risk factor for unintentional rail injury fatalities during daylight hours

Railway fatalities account for approximately 10% of transport fatalities in Cape Town. The objective of this study was to examine alcohol intoxication as a risk factor during daylight hours by conducting a case - control study to compare rail passenger and pedestrian fatalities (cases) with motor vehicle passenger and pedestrian fatalities (controls). Rail passenger and rail pedestrian fatalities were defined as cases with motor vehicle passenger and pedestrian fatalities as the respective controls. Data were collected from post-mortem reports at two mortuaries from 1994 to 1996. Blood alcohol concentration was the dependent variable. The independent variables were age, gender, date of death, day of week, time of injury and external cause of death. The late afternoon and early evening period from 1600 hours to 1900 hours had the highest frequency of fatalities for all case and control groups. Of the 56 predominately male (89%) railway passenger cases with an average age of 34.5 (SD 12.5) years, Friday (27%) was the most frequent day of death. Railway pedestrian cases (89% male, average age 36.8 years (SD 13.3)) were more likely to be killed on a Monday (11% of cases). Among the controls, motor vehicle passengers (63% male, average age 39.9 (SD 15.5)) were more likely to die on a Sunday (25%) and pedestrians (82% male, average age 41 (SD 14.7)) on a Saturday (21%). The study showed that alcohol consumption is an important risk factor for rail fatalities during daylight hours, with rail passenger fatalities being 4.71 (1.72 - 12.88) and rail pedestrian fatalities 1.62 (0.98 - 2.69) times more likely to be intoxicated than the respective controls. The results provide more evidence for public health campaigners to tackle endemic alcohol abuse and to develop diverse interventions that do not exclusively target motor vehicle drivers.     

Customer Satisfaction and Elapsed Time since Purchase as Drivers of Price Knowledge

This study investigates the influence of customer satisfaction and elapsed time since purchase on customers’ explicit and implicit knowledge of price. The results of two large, independent surveys of customers who purchased a consumer durable good indicate that customer satisfaction and elapsed time have different effects on explicit versus implicit price knowledge. Customer satisfaction has a negative impact on explicit price knowledge, but no substantial effect on implicit price knowledge. The length of time between purchase and retrieval of the price information has a negative impact on explicit price knowledge but no substantial effect on implicit price knowledge. Finally, customer satisfaction has a moderating role, in that the higher the customer satisfaction level, the stronger the negative impact of elapsed time on explicit price knowledge.     

Regular Price $299; Pre-order Price $199: Price Promotion for a Pre-ordered Product and the Moderating Role of Temporal Orientation

Retailers typically use the strategy of providing a discount to induce the sale of a new product at a pre-order stage. Despite the prevalence of this strategy, providing discounts might not be effective for all consumers. The present research shows that the positive effect of a discount depends on consumer temporal orientation. Results from four experimental studies reveal that a large discount positively affects present-oriented, but not future-oriented, consumers. The findings suggest that perceived financial risk and perceived product quality sequentially mediate the effect of discount size on value toward the deal and purchase intention. A third-party product quality rating boosts quality perceptions, which in turn reduces perceived financial risk and positively enhances value toward the deal along with purchase intention. Our findings demonstrate that when the brand itself acts as a reliable signal of quality, a discount has its intended effect for both present- and future-oriented consumers. Overall, the findings of this research suggest that a retailer can use quality cues along with a discount, especially for a new brand, to appeal to the broadest group, as it will attract both future- and present-oriented consumers.