Multichannel retailing and price competition

The vacuum cleaner was an archetypal new economy product of the early twentieth century. It offered both major time savings and qualitative advantages over previous household cleaning methods—the brush, broom, and manual carpet sweeper—and was sold in a novel way (by household demonstration). The direct sales techniques pioneered by vacuum manufacturers in the United States were to have a profound impact on the way vacuums were sold in Britain, and globally. Yet by 1939 their household diffusion was relatively slow compared to refrigerators or washing machines. This chapter explores why the industry evolved a structure based on high prices, high cost distribution methods (door-to-door sales), and a strong emphasis on non-price competition, based on differentiation through features. It also shows how door-to-door selling eventually came to constitute both a key firm-level competitive advantage and a substantial industry-level constraint on product diffusion.

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Duopoly price competition with limited capacity

Economic Theory Bulletin ◽

10.1007/s40505-020-00198-1 ◽

2021 ◽

Author(s):

A. Bërdëllima

Keyword(s):

Price Competition ◽

Small Firms ◽

Common Knowledge ◽

Limited Capacity ◽

Equilibrium Outcome ◽

Second Stage ◽

Duopoly Model ◽

Full Capacity ◽

Stage Game ◽

The Given

AbstractWe study a variation of the duopoly model by Kreps and Scheinkman (1983). Firms limited by their capacity of production engage in a two stage game. In the first stage they commit to levels of production not exceeding their capacities which are then made common knowledge. In the second stage after production has taken place firms simultane- ously compete in prices. Solution of this sequential game shows that the unique Cournot equilibrium outcome as in Kreps and Scheinkman is not always guaranteed. However the Cournot outcome is still robust in the sense that given sufficiently large capacities this equilibrium holds. If capacities are sufficiently small, firms decide to produce at their full capacity and set a price which clears the market at the given level of output.

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Movie Variety and the City

The B E Journal of Economic Analysis & Policy ◽

10.1515/bejeap-2019-0398 ◽

2020 ◽

Vol 20 (3) ◽

Cited By ~ 1

Author(s):

In Kyung Kim

Keyword(s):

Longitudinal Data ◽

Ownership Structure ◽

Price Competition ◽

Product Variety ◽

A Chain ◽

The City ◽

Positive Effect

AbstractIn this article, I study the effect of entry and ownership structure on product variety within a city. Using longitudinal data on theaters in Korea, I find that the positive effect of entry on city-wide movie variety is limited only to the first few entrants. This finding, together with the observation that movie variety in a theater does not respond to entry, suggests that a theater's incentive to soften price competition by screening less popular movies not otherwise available in the city decreases as more theaters enter. I also find evidence that movie variety is greater in more concentrated cities, implying that a chain that owns multiple theaters in a city may differentiate the movie lineup offered in each theater more than when the theaters are individually owned in order to avoid cannibalization or to preempt entry.

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Marketing Mix Modeling Using PLS-SEM, Bootstrapping the Model Coefficients

Mathematics ◽

10.3390/math9151832 ◽

2021 ◽

Vol 9 (15) ◽

pp. 1832

Author(s):

Mariano Méndez-Suárez

Keyword(s):

Time Series ◽

Structural Changes ◽

Marketing Mix ◽

Structural Equations ◽

Superior Performance ◽

Parameter Estimates ◽

Significance Analysis ◽

Autocorrelation Structure ◽

Multichannel Retailing ◽

Black Friday

Partial least squares structural equations modeling (PLS-SEM) uses sampling bootstrapping to calculate the significance of the model parameter estimates (e.g., path coefficients and outer loadings). However, when data are time series, as in marketing mix modeling, sampling bootstrapping shows inconsistencies that arise because the series has an autocorrelation structure and contains seasonal events, such as Christmas or Black Friday, especially in multichannel retailing, making the significance analysis of the PLS-SEM model unreliable. The alternative proposed in this research uses maximum entropy bootstrapping (meboot), a technique specifically designed for time series, which maintains the autocorrelation structure and preserves the occurrence over time of seasonal events or structural changes that occurred in the original series in the bootstrapped series. The results showed that meboot had superior performance than sampling bootstrapping in terms of the coherence of the bootstrapped data and the quality of the significance analysis.

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