Oligopoly and welfare: A unified presentation with applications to trade and development

We develop a unified sequence of models to examine the determinants of price, output, profitability and concentration for different kinds of oligopolistic market. We relate various magnitudes of significance to judges of welfare and to policy makers, such as consumer surplus, profit, or added benefits of employment or trade surplus, to observable magnitudes such as the size and concentration of the market. It emerges that various appropriately formulated Herfindahl indices are useful in several of these relations. We attempt to present results in a way that is useful for empirical investigations and pay particular attention to applications in trade and development.     

Voluntary pricing mechanisms for green product purchase: altruistic versus self-enhancing consideration

Voluntary pricing mechanisms, such as Pay-What-You-Want (PWYW), could be a better pricing strategy to substitute for cash discount promotions. They can effectively promote the sales of conventional goods and services, while being influenced by socio-psychological variables. However, there is no clarity on the relative assessment of the impact of pricing frames, such as PWYW and Mark-Off-Your-Own-Price (MOYOP), on the consumers’ purchase of green products, where the purchase consideration might vary as the environment protection (altruistic) consideration versus the self-interest (self-enhancing) consideration. Further, there remains ambiguity on when and why such pricing mechanisms will work. This study, through an experiment, examines the buyers’ varied responses for the PWYW price frame versus the MOYOP price frame versus the fixed price frame under the environment protection (altruistic) consideration versus the self-interest (self-enhancing) consideration. It shows that although buyers do not show any difference in the mean voluntary payment between PWYW versus MOYOP frames as such; they prefer PWYW price frame under the environment protection (altruistic) consideration and MOYOP price frame under the self-interest (self-enhancing) consideration. The results show that the perception of price fairness mediates the relationship between pricing mechanism and willingness to buy (WTB). Furthermore, this study finds that price consciousness impacts the indirect effect of pricing mechanisms on WTB via perceived price fairness. The present study is the first to examine and analyze different considerations when the buyers’ preference varied for the PWYW versus MOYOP pricing frames. This study has suggested the underlying role of the perception of price fairness and price consciousness in the participative pricing mechanism on purchase.     

Longevity challenges and leadership interventions: Strategy journeys of two Indian banks

This article studies the strategic journeys of two Indian banks in evolving socio-political and economic environments, spread across eight decades. It provides a holistic view of longevity challenges by exploring interdependencies between a firm’s internal dynamics, external environment, and its leaders. This article covers the growth of Canara Bank and Syndicate Bank in distinct phases of unrestricted, regulated, and centrally planned economic environment, and in changing socio-political scenarios. It uses within-case and across-case analysis, contextualised in these conditions, to provide rich insights about measures adopted by firms for their long-term survival and sustenance.     

Customer-centric pricing: The surprising secret for profitability

Companies spend enormous amounts of energy and capital in creating value for customers, but less regard is given to actually capturing the value they have created. Segmentation based on buying behavior uncovers a tremendous differential in willingness to pay for subjective product attributes such as convenience, status, and quality. Purchase decisions are made through an assessment of a myriad of factors balancing perceptions of value components against price in a subtle, complex, and often sub-conscious decision matrix. Customer-centric pricing requires the simultaneous and continuous assessment of product attributes, customer perceptions, and the circumstances of time and place by listening to customers' actions. It is a means of assuring that companies assess the value they create for customers and extract that value from the marketplace.     

Policy preferences of experts seeking to raise and stabilise farm incomes in the Eastern Gangetic Plains

Poverty is endemic in the highly populated Eastern Gangetic Plains where agriculture is critical to more than half the population. However, the mechanisms to support agriculture for development are contested. For example, some have advocated a strong role for government support and assistance due to market weaknesses, while others have promoted the need for more market-oriented approaches. We use an elicitation process focussed on expert policymaking communities, employing stated preference techniques to explore these options. Differences in perceptions about the effectiveness of policies and their delivery are reported between countries, while also empirically examining the influence of the respondents' organisational background. The results show support for policies that improve farmers' access to inputs, especially when delivered by private sector actors. The research provides an important contribution to the literature on policies for agricultural development.     

Promotional Framing of Green Products: Mediating Role of Sale Proneness

Abstract

The impact of sales promotion in boosting short-term sales is well established in the literature. While there are ample studies on the impact of sales promotion on conventional products in western countries, there is very scant research on the effect of promotions on green products and almost nonexistence research in emerging economies. This research addresses this gap by doing a comparative assessment of economically equivalent bonus pack sales promotion and price discount sales promotions on green versus non-green products through two experiments designed as a 2 (green product motivation: hedonic vs. utilitarian) × 2 (promotional frame: price discount vs. bonus pack) × 2 (discount level: low vs. high) between-subjects study, and 2 ( product types: green, non-green/control) × 2(promotional frame: price discount, bonus pack) between-subjects study. This research further examines the mediating role of sale proneness in the purchase process. The findings of this research indicate that buyers' preferences for promotion are quite varied for the purchase of green versus non-green products, and the price discount increases sale proneness which exerts a negative impact on product purchase willingness. Accordingly, this study has some theoretical and practical implications.     

A Repeated Game Model of Monetary Union

Given a policy rule of the common central bank of a monetary union, member countries with different preferences about inflation and facing asymmetric shocks have different incentives to secure political intervention in the bank's operation and achieve the temporary benefit of surprise inflation. This is modelled as a repeated game, and the most cooperative outcome subject to the countries' incentive compatibility constraints is found. The optimal rule responds flexibly to asymmetric shocks, adjusting policy away from the full commitment level toward the discretionary level, so as to maintain the worse-hit country's incentive to abide by the rule.     

The Role of Sales in NPD: An Investigation of the U.S. Health‐Care Industry

The new product development (NPD) literature emphasizes that the success of new products strongly depends on a firm's capability to understand customer needs and translate them into new products. Because of their close relationships with customers, salespeople are in the ideal position to connect the firm's NPD efforts to its customers. The extant literature on the role of sales in NPD focuses on either sales’ contribution to generating new product ideas or the adoption of new products by salespeople, while a systematic study of sales’ contribution during all NPD stages is lacking. In addition, the role of sales is typically studied in isolation, while in practice, the role of sales depends on the relationship between sales and marketing. This article addresses these gaps in the literature by reporting on an empirical investigation of the role of sales during the entire NPD process in the U.S. health‐care industry, taking into account the complexities of the sales‐marketing dynamic. The article is based on interviews with 21 sales and 15 marketing informants from the U.S. health‐care industry, both pharmaceutical firms (selling drugs to physicians) and device manufacturing firms. Our findings highlight how salespeople are distant from NPD process during the discovery stage. Salespeople are focused on selling to customers, and marketing keeps sales distant from the NPD process. During the development stage, sales is still only indirectly involved in NPD through its relationship with marketing. During commercialization, however, marketing takes the driver's seat and strongly involves sales in the various (pre)launch activities. But while salespeople are mostly indirectly involved in NPD, sales managers have a closer relationship with sales and are more directly involved. The findings also show how the involvement of sales is influenced by characteristics of the health‐care industry. Thus, this article contributes to our understanding of the role of sales in NPD by integrating theoretical perspectives from the sales‐marketing interface literature into the NPD literature.     

Social responsibility,moral hazard,and collateral requirement: Evidence from a quasi-natural experiment in India

The stakeholder theory predicts that corporate social responsibility (CSR) activities reduce the morale hazard problem between creditors and corporate firms and decrease the requirement of collaterals in debt transactions. Consistent with this theory, our analysis shows that there is a negative relationship between CSR and secured debt in a cross-section of firms. Further, by using the mandatory CSR regulation implemented in India as a quasi-natural experiment setting, we observe the same negative relationship across periods in firms that were impacted by the regulation. These results suggest that CSR activities may substitute collaterals for obtaining debt from financial institutions, especially banks.