Research in marketing in Europe: Some reflections on its setting,accomplishments and challenges

In this paper we present some reflections on the development and state of research in marketing in Europe. After briefly putting European research in a historical perspective, we devote a major section to discussing the institutional setting in which research takes place. We believe that the institutional setting is a crucial determinant of research. We then discuss numumber of European research accomplishments. We essentially limit ourselves to marketing models and industrial marketing, our own major areas of interest. In the final section we list some challenges for the future and discuss how they could be turned into opportunities.     

Pareto-Improving Social Security Reform

It is generally accepted that moving from an unfunded to a funded social security system implies a welfare loss for the transition generation—that is, the generation that has to pay twice: first, saving for its own retirement and, second, contributing to the pensions of the then retired generation. This article shows that in a setting of endogenous growth with positive externality such a transition can be Pareto improving. But it argues also that social security reform is more a pretext than a requirement for internalizing such a positive externality.     

On the generic inefficiency of differentiable market games

It is shown that a differentiable market game remains generically inefficient when its strategic outcome function is perturbed smoothly. The proof is based on Thom's transversality theorem and removes any restriction regarding the dimension of the strategy spaces. A converse result is that almost all efficient market games that are competitive are characterized by Bertrand-like non-differentiabilities. Finally a synthesis between the Cournot-and-Bertrand-type approaches to Walrasian equilibrium, as recently developed in the literature, is suggested.     

Productivity, terms of trade and the ‘home market effect’

This paper analyzes the international transmission and welfare implications of productivity gains and changes in market size when macroeconomic adjustment occurs both along the intensive margin of trade (changes in the relative price of existing varieties of tradable goods) and the extensive margin (creation and destruction of varieties). We draw a distinction between productivity gains that enhance manufacturing efficiency and gains that lower the cost of firms' entry and of product differentiation. Countries with lower manufacturing costs have higher GDP but supply their products at lower international prices. Instead, countries with lower entry costs supply a larger array of goods at improved terms of trade. Output growth driven by demographic expansions, as well as government spending, is associated with an improvement in international relative prices and firms' entry. While trade liberalization may result in a smaller array of goods available to consumers, efficiency gains from deeper economic integration benefit consumers via lower goods prices. The international transmission mechanism and the welfare spillovers vary under different asset market structures, depending on trade costs, the elasticity of labor supply, and consumers' taste for varieties.     

Political problems of the southward extension

The inclusion of Greece, Spain and Portugal in the European Community will result in grave consequences for the old members of the EC as well as for the acceding states. Which are the advantages expected from the southward extension and which problems are likely to arise?