Channel Management and differentiation strategies: A case study from the market for fresh produce

The paper analyses the current differentiation strategies in the market for fresh produce. First a short review of the literature on channel structure and product differentiation is presented, in order to identify, on a theoretical grounding the incentives for differentiation strategies. Second, a case study is drawn of a UK channel intermediary organisation carrying out differentiation policies in the fresh produce category (on behalf of UK multiple retailer customers) supplied by a dedicated Italian grower. Results show that in the fresh produce industry there is room for product differentiation, but with contradictory welfare effects.fresh produce, product differentiation, channel structure and management, Agribusiness, Marketing,

Cultural quotas in broadcasting II: policy

This paper considers the application of ‘cultural quotas’ to radio broadcasting: a requirement that a minimum percentage of broadcast content be of local origin. Using a Hotelling location model derived in Richardson (2004) we show that, while the laissez-faire solution involves less than (socially optimal) maximal differentiation, a quota reduces the differentiation between the stations even further. While a cultural quota may raise consumer welfare, the reduced station diversity and advertising levels monotonically lower overall social welfare. We consider two other policies – a limit on advertising and a publicly provided non-commercial station – and show that both also reduce diversity, compared to the laissez-faire solution. An advertising cap is not as effective as the quota in achieving greater airplay for local content for least welfare cost but a public station can be, depending on the magnitude of its associated fixed costs

Can Rivalry Increase Prices?

Spatially differentiated duopolists set higher-than-monopoly prices at some distances. This phenomenon is shown to occur in any finite- dimensional space for a class of reservation prices that covers concavity and convexity in perceived distance from a design. But an upper bound on the equilibrium duopoly price converges monotonically and quickly to the monopoly price in dimensionality. If consumers care about sufficiently many features of the product (a very small number of criteria is enough), monopoly nearly leads to an extreme price.price effect of competition, multidimensional product spaces, duopoly pricing, spatial competition

Boltzmann type control of opinion consensus through leaders

The study of formations and dynamics of opinions leading to the so called opinion consensus is one of the most important areas in mathematical modeling of social sciences. Following the Boltzmann type control recently introduced in [G. Albi, M. Herty, L. Pareschi arXiv:1401.7798], we consider a group of opinion leaders which modify their strategy accordingly to an objective functional with the aim to achieve opinion consensus. The main feature of the Boltzmann type control is that, thanks to an instantaneous binary control formulation, it permits to embed the minimization of the cost functional into the microscopic leaders interactions of the corresponding Boltzmann equation. The related Fokker-Planck asymptotic limits are also derived which allow to give explicit expressions of stationary solutions. The results demonstrate the validity of the Boltzmann type control approach and the capability of the leaders control to strategically lead the followers opinion

MARKET PERFORMANCE WITH MULTIPRODUCT FIRMS

We revisit the fundamental issue of market provision of variety associated with Chamberlin, Spence, and Dixit and Stiglitz when firms sell several products. Both products and firms are envisaged as di?erentiated. We propose a nested demand model where consumers decide upon a firm then which variant to buy, and use it to determine the market’s biases when firms compete in product ranges and prices. The market system attracts too many firms with too few products per firm: firms restrain product ranges to relax price competition, but this exacerbates overentry. The results extend to generalized nested CES models.Multiproduct firms, excess variety, nested demand, product line competition

The Effects of Concentration on Competition and Efficiency : Some Evidence from the French Audit Market

This paper aims at investigating the effects of concentration on competition and cost efficiency of the French audit market. Competition is measured with the Rosse-Panzar model, while cost efficiency is estimated with stochastic frontier approach. Cost efficiency levels are estimated at around 75% with greater efficiency for Big-Four firms, while the nature of competition appears to be monopolistic competition. Dynamic analysis shows a reduction in competition, and a decrease in cost efficiency for Big-Four and non-Big-Four firms between 1999 and 2003. We therefore provide support to a negative impact of concentration on competition and cost efficiency.Auditing, audit market, competition, efficiency.

Spatial interactions in location decisions: Empirical evidence from a Bayesian spatial probit model

In the past few decades spatial econometric models have become a standard tool in empirical research. Nevertheless applications in binary-choice models remain scarce. This paper makes use of Bayesian Spatial Probit Models to model and estimate spatial interactions in location decisions. For this purpose, we focus on the Austrian retail gasoline market, which is going through a process of remarkable structural changes. A short analysis shows that, during the last decade 10.9% of the stations had left the market and a percentage of 29.6% had either left the market or had changed the brand. This paper aims at investigating this process. A special characteristic of this market is the local competition structure which is characterized by spatial dependencies along local competitors. To capture these spatial dependencies and since the dependent variable is binary in nature (an exit had taken place or not), we apply a Bayesian spatial probit model using MCMC estimation on station level data for the whole Austrian retail gasoline market. Our results suggest, that the decision to leave the market, does not only depend on own characteristics, but also on competitors. In particular, we find the exit decisions to exhibit a negative spatial correlation. Moreover, our model allows to quantify spatial spillover effects of this market. (authors' abstract)Series: Department of Economics Working Paper Serie

Voronoi Choice Games

We study novel variations of Voronoi games and associated random processes that we call Voronoi choice games. These games provide a rich framework for studying questions regarding the power of small numbers of choices in multi-player, competitive scenarios, and they further lead to many interesting, non-trivial random processes that appear worthy of study. As an example of the type of problem we study, suppose a group of $n$ miners are staking land claims through the following process: each miner has $m$ associated points independently and uniformly distributed on an underlying space, so the $k$th miner will have associated points $p_{k1},p_{k2},\ldots,p_{km}$. Each miner chooses one of these points as the base point for their claim. Each miner obtains mining rights for the area of the square that is closest to their chosen base, that is, they obtain the Voronoi cell corresponding to their chosen point in the Voronoi diagram of the $n$ chosen points. Each player's goal is simply to maximize the amount of land under their control. What can we say about the players' strategy and the equilibria of such games? In our main result, we derive bounds on the expected number of pure Nash equilibria for a variation of the 1-dimensional game on the circle where a player owns the arc starting from their point and moving clockwise to the next point. This result uses interesting properties of random arc lengths on circles, and demonstrates the challenges in analyzing these kinds of problems. We also provide several other related results. In particular, for the 1-dimensional game on the circle, we show that a pure Nash equilibrium always exists when each player owns the part of the circle nearest to their point, but it is NP-hard to determine whether a pure Nash equilibrium exists in the variant when each player owns the arc starting from their point clockwise to the next point