A Consumer-Based Approach to Designing Product Line Extensions

A high proportion of new product introductions entail line extensions (e.g., new flavors, sizes, convenience packs, features) rather than totally new products. An attendant problem with line extending involves the possibility of cannibalization of the firm's current products. Paul Green and Abba Krieger describe an approach for designing line extensions that employs consumer tradeoff data and a variety of search heuristics to find "optimal" extensions that explicitly consider the cannibalization of current offerings. The methodology is applied to a case in which an agricultural chemicals firm is introducing a new soybean herbicide.     

Conjectures, firm characteristics, and market structure : An empirical assessment

This paper makes use of a unique data set to investigate how firms in the Vancouver, British Columbia retail-gasoline market view their rivals and how consumers in turn view these firms. Own- and rival-price elasticities of demand, conjectural variations, and Lerner indices are estimated for thirteen service stations in a submarket of Vancouver. These variables are then related to firm characteristics such as type of ownership, degree of horizontal and vertical integration, and type of service. In this way, systematic patterns in seller behavior and in buyer attitudes are revealed.     

Sustaining Collusion Via a Fuzzy Trigger

Probability theory is the standard economic representation of uncertainty, although it is not always an accurate one. Fuzzy logic is an alternative representation that does not require individual beliefs regarding the explicit functional form of uncertainty. This paper applies fuzzy logic to an oligopoly trigger pricing game. The fuzzy trigger pricing game reverses the standard cyclical price war prediction; collusion-sustaining price wars are most likely to occur during times of high demand. The fuzzy model also predicts that markets with relatively volatile prices are more likely to undergo collusion-sustaining price wars. The predictions are consistent with available empirical evidence.     

The problems of supplying water to third world cities: Bulawayo's water crisis

The current drought in central and southern Africa has focused attention on issues relating to the provision and supply of potable water. In the case of Bulawayo, Zimbabwe's second city, there is the very real prospect that water supplies may be exhausted before the onset of the next rainy season. This paper explores the background to this problem and shows how poor planning, financial constraints, and political intransigence have failed to keep pace with a policy aimed at the provision of water to the inhabitants in this expanding urban environment Alternative sources of supply. in particular a pipeline to the Zambezi River, are also investigated.     

Mode of payment in household expenditures

Summary We have studied the choice of mode of payment from a 1987 Dutch household survey. The institutional arrangements of a transaction are a major determinant for the mode of payment, and so is the amount involved. A 10% increase in the sum paid usually leads to a reduction of about 1.3% to 2.3% in the incidence of currency use.Based on De keuze van een betaalmiddel (The Choice of Mode of Payment), (SEO, Amsterdam, 1989), which reports research commissioned by the Postbank, Amsterdam.     

Should multivariate early warning systems for banking crises pool across regions?

Most extant work on prediction of banking crises has utilised global samples, which are in turn dominated by observations from middle-income countries, and rely on a single estimator. However, economic and financial structures as well as the pattern of shocks may differ substantially across regions, while a range of specifications is desirable to check robustness. Accordingly, in this paper we test the implicit pooling assumption in earlier multivariate work on Early Warning Systems using both logit and binary recursive tree specifications separately for crises in Asia and Latin America, as well as the pooled sample. Results suggest markedly different crisis determinants across regions, implying global samples are inappropriate.