Vertical Product Differentiation and Advertising

A duopoly model is developed in which firms' strategic variables include brand quality, the number of distinct market segments to enter and price. Informative advertising is used to overcome consumer ignorance about brands. In contrast to many existing models in which firms engage in price competition, the subgame perfect equilibria of the game are not characterised by the production of vertically differentiated products. Further, whilst the firms typically produce identical high quality products, in some circumstances the production of homogeneous low quality brands can be an equilibrium strategy.     

Inefficient Public Provision in a Repeated Elections Model

We consider a dynamic setting with no policy commitment. Two parties that compete for election must choose the level of provision of a public good as well as the tax payment needed to finance it. The cost of producing the good may be high or low and this information is not known to the voters. We show that there exists an equilibrium in which the party that does not want much of the public good uses the inefficient (high cost) technology even though the efficient one is available. Using the low cost technology would, by informing the voters about the cost parameter, force it to produce an excessively high level of the good in the future. Interestingly, this equilibrium is not symmetric, suggesting that a party with a strong taste for the public good is less likely to adopt a wasteful policy.     

The elderly food consumer: disadvantaged?

Older consumers are an important subgroup of the population whose numbers are rising. Intense competition between retailers and changes in patterns of food shopping among consumers in general have led to research that focuses on factors that contribute to older people being disadvantaged. Research in Scotland has investigated the impact of the food retail sector on elderly people and results indicate that elderly people shop frequently and spend a considerable proportion of their income on food. Income, location, transport and the supermarket environment are all potential factors that can contribute to the disadvantage of older people.     

The neglect of the older consumer

This review of the literature concerning the older consumer discusses the reasons for the neglect of this large, lucrative and growing market by practitioners and academics in the fields of consumer affairs, marketing and gerontology. The authors consider the effects of continuing to ignore these ‘forgotten consumers’, and the possible benefits of recognizing and supplying the important market they constitute.