Harmful Freedom of Choice: Lessons from the Cellphone Market

This article focuses on the relationship between provider and customer, specifically on the complexity of available contracts in the cellphone market and the ways this complexity might be harmful to consumers. This article aims to elucidate the issues, fleshing them out both as a general phenomenon and as a specific implementation in the cellphone context. The aim is not to provide ultimate solutions, but to show the directions these solutions might take and the difficulties involved

The U.S. Canned Soup Market: A Competitive Profile

This paper follows the path of eight studies of U.S. markets: Men’s Shaving Cream, Beer, Shampoo, Shredded/Grated Cheese, Refrigerated Orange Juice, Men’s Razor-Blades, Women’s Razor-Blades, and Toothpaste.Porter associates high market share with cost leadership strategy which is based on the idea of competing on a price that is lower than that of the competition. However, customer-perceived quality—not low cost—should be the underpinning of competitive strategy, because it is far more vital to long-term competitive position and profitability than any other factor. So, a superior alternative is to offer better quality vs. the competition.In most consumer markets a business seeking market share leadership should try to serve the middle class by competing in the mid-price segment; and offering quality better than that of the competition: at a price somewhat higher, to signify an image of quality, and to ensure that the strategy is both profitable and sustainable in the long run. Quality, however, is a complex concept that consumers generally find hard to understand. So, they often use relative price, and a brand’s reputation, as a symbol of quality.In 2008 the U.S. retail sales for the Canned Soup market were $3.44 Billion. The market leader Campbell had a commanding share of 52.5%, followed by a far-distant second Progresso with a share of 17.8%. A notable feature of this market was the tremendous variety of soups, albeit many with minor variations, that equaled the unbelievable figure of 1011!We focused our attention on the two best-selling varieties of soup: (1) Chicken Broth canned, the market leader, with 11.1% market share, and (2) Chicken Noodle Soup canned, with a 7.4% share. Within each variety we chose the can-size range with the highest sales.Using Hierarchical Cluster Analysis, we tested Hypotheses I that a market leader is likely to compete in the mid-price segment. Employing U.S. retail sales data for 2008 and 2007, we found that for both Chicken Broth and Chicken Noodle Soup—for 2008 and 2007—the market leader Campbell was a member of the mid-price segment.For Hypothesis II we wanted to test the proposition that the unit price of the market leader would be somewhat higher than that of the nearest competition. For Chicken Broth we could not test this hypothesis because Progresso, the runner-up, could not be included in this analysis.However, for Chicken Noodle Soup the results did not support the hypothesis because Progresso happened not to be a part of the mid-price, but that of the premium segment.Finally, we discovered four strategic groups in the industry

Growing Shopping Malls and Behavior of Urban Shoppers

Shopping malls contribute to business more significantly than traditional markets which were viewed as simple convergence of supply and demand. Shopping malls attract buyers and sellers, and induce customers providing enough time to make choices as well as a recreational means of shopping. However, competition between malls, congestion of markets and traditional shopping centers has led mall developers and management to consider alternative methods to build excitement with customers. This study examines the impact of growing congestion of shopping mall in urban areas on shopping conveniences and shopping behavior. Based on the survey of urban shoppers, the study analyzes the cognitive attributes of the shoppers towards attractiveness of shopping malls and intensity of shopping. The results of the study reveal that ambiance of shopping malls, assortment of stores, sales promotions and comparative economic gains in the mall attract higher customer traffic to the malls.Shopping malls, traditional markets, sales promotion, market ambiance, leisure shopping, recreational services, retailing, market congestion, customer value, consumer behavior

What's Behind the Increase in Inequality?

The focus of this paper is the increase in earnings inequality over the last 30-plus years. Economists have well-developed theories that explain differences in wage levels among different categories of workers. Differences in educational attainment and skills are a major source of these differences; large organizations typically employ workers with a wide range of skills and responsibilities and pay them accordingly. As a result, the level of wage inequality within organizations is quite large. This paper does not challenge these results. It argues, however, that these theories are not adequate to explain a relatively recent phenomenon: the increase in recent decades in wage inequality among workers with similar levels of education and similar demographic characteristics who are employed in similar occupations but in different firms or establishments. These differences in wages are how most people experience inequality. Yet much of the analysis by economists has focused on developments that have enabled leading firms in the U.S. to increase their ability to extract monopoly rents.This paper reviews a wide-ranging literature that examines the increased ability of leading firms to extract monopoly rents. It also reviews the more recent and still thin literature on the increase in inequality among workers with similar characteristics but different employers. The contribution of this paper is the identification of a mechanism that reconciles these two strains of economic research and explains how the increase in rent extraction is linked to the increasingly unequal pay of U.S. workers with similar characteristics. I draw on joint work with Rosemary Batt (2014) to identify new opportunities for rent seeking behavior, and on joint work with Annette Bernhardt, Rosemary Batt and Susan Houseman (2016, 2017) on domestic outsourcing, inter-firm contracting and the growing importance of production networks to establish a mechanism that connects the increase in rents with this new type of increase in wage inequality

Sunny Samaritans and Egomaniacs: Price-Fixing in the Gamete Market

Krawiec compares the egg market to sperm market to illustrate the extent to which public-interest rhetoric enables private wealth transfers in the egg market. She also illuminates why such rhetoric is so effective, playing on deeply held societal norms. In addition, she provides an overview of the oocyte business, highlighting issues relating to recruitment, compensation, controversy, retrieval, and risk. She does the same for the sperm business. Furthermore, she discusses the anticompetitive behavior in the egg market and argues that the horizontal price-fixing embodied in the American Society for Reproductive Medicine\u27s pricing guidelines violates the Sherman Act. Lastly, she concludes that market forces, rather than collusive industry agreement, must be allowed to determine the proper mix of altruism and monetary payment that ultimately constitutes total egg donor compensation

Optimal Product Proliferation in Monopoly: A Dynamic Analysis

The monopolist's incentives towards product proliferation are evaluated in an optimal control model considering three alternative regimes: profit-seeking; social planning; and a hybrid case with monopoly pricing and a regulator setting product innovation to maximize welfare. In equilibrium, the profit-seeking firm supplies a socially suboptimal number of varieties to reduce cannibalization while the social planner exploits the same effect to satisfy consumersÕ love for variety and decrease the market price of all products. In terms of the Schumpeter vs Arrow debate on the relationship between market structure and innovation incentives, the results obtained in this model have a definite Arrovian flavour.multiproduct firm, product innovation, optimal control

Country of origin, branding strategy and internationalisation: The case of Chinese piano companies

This paper studies the internationalisation of Chinese piano firms from a branding perspective. The purpose of the paper is two folds. Firstly it examines the interplay between the country of origin (COO) effect and international branding, and how COO affects the choice of branding strategies in international markets. Secondly, it explores the possible link between international branding decisions and international expansion of the firm. A model is introduced that illustrates the relationships between COO, branding options and internationalisation. Corresponding with its progress in the internationalisation, a firm’s branding development in international markets may follow certain stages. As the firm moves to advanced stages, it increases its international brand equity; the impact from negative COO will decrease and eventually become irrelevant. Literature of internationalisation is largely based on the experience of MNEs from Western developed countries. Multinational firms from developing countries such as China possess some unique characteristics that make it very difficult to apply Western theories to them. The emergence of MNEs from developing countries calls for the development of new theories