Essays on Information Transmission and its Effects in Markets with Imperfect Competition

This thesis consists of four essays in the field of industrial organization. The essays explore questions of information transmission and its influence in markets characterized by imperfect competition. The first part of this thesis, chapters one and two, examines the incentives of a manufacturer to communicate and reveal private information about his product to consumers in a setting where consumers are not served by the manufacturer directly but instead purchase the manufacturer's good from a retailer who resells the good bought from the producer.The second part, chapters three and four, analyzes the effects of consumer learning on how firms design their products with respect to the products of the competitors

Essays on Deposit Insurance, Underground Banking and Buying Local Preference

This dissertation consists of three self-contained essays that explore three distinct topics in deposit insurance, underground banking and social preference respectively. The first essay, "Deposit Insurance, Market Discipline and Consumer Welfare: A Study of The Recent Financial Crisis", studies the welfare implication of the recent change in the deposit insurance coverage in the United States on depositors. I develop and estimate a structural model which represents the banking industry as a two-sided market place where banks act as intermediaries between consumers who have funds and businesses seeking loans. I find that this policy erodes market discipline and harms consumers. Moreover, market competition magnifies the damage on market discipline. Counterfactuals indicate that banks reduce their deposit interest rates and increase their risk caps under the new policy. The second essay, "Underground Banking in the Emerging Market: Relationship as Collateral", which is a joint work with Jian Ni, investigates the mechanism behind the use of relational contracts in sustaining the borrower-lender relationship in the underground banking industry. Built on the relational contract framework, we show that the borrower-lender relationship serves as "collateral" that screens out risky borrowers and countervails the moral hazard over the course of relationship. Contrary to conventional wisdom, the value of "collateral" is determined by future expected transactions. In the optimal contract, as the relationship advances, the loan rate falls and the value of the relationship rises. We find that borrowers have more incentives to repay as the relationship continues. The third essay, "Buying Local, Consumer Benefit and Social Welfare", which is coauthored with Baojun Jiang and Jian Ni, examines the welfare implication of the "buying-local" preference in a product market. We consider a market in which consumers are heterogeneous in "buying-local” and product price and quality are endogenous. We derive a non-monotonic relationship between “buying-local” and consumer surplus (social welfare) in a monopoly market. Contrary to conventional wisdom, we find that in a monopoly market, information friction may improve consumer surplus and social welfare. Moreover, we show that a welfare trap emerges when competition is present

Eine ökonomische Analyse der wissensintensiven Dienstleistung Coaching

Über die letzten 20 Jahre hat sich Coaching zu einer der gefragtesten Personalentwicklungsdienstleistungen entwickelt. Aus dem Sport kommend, wurde Coaching zunächst als exklusive Maßnahme für Top-Führungskräfte konzipiert. In den 1980er Jahren wurden erste Angebote von Top-Executive-Coaching, orientiert an amerikanischen Vorbildern, in Deutschland angeboten. Bis heute hat Coaching darauf einen unglaublichen Boom erlebt. Da die Berufsbezeichnung ‚Coach‘ nicht geschützt ist, kann jedermann Dienstleistungen unter dem Label ‚Coaching‘ anbieten. Der deutsche Coaching-Markt weist bis heute keine strukturellen Marktzutrittsbarrieren auf. Als eine Folge des nachfragegetriebenen Booms ist Coaching keine Maßnahme geblieben, die lediglich Top-Führungskräften vorbehalten ist. Coaching-Angebote wurden durch die steigende Zahl der Anbieter einem immer breiteren Publikum zugänglich gemacht. Als Personalentwicklungsmaßnahme wird Coaching heute in allen Branchen, Unternehmensgrößen und auf allen hierarchischen Ebenen angeboten und eingesetzt. Auch außerhalb des beruflichen Kontexts haben sich Coaching-Angebote verbreitet. Motiviert durch den Boom der Coaching-Branche in den letzten Jahren sind viele Dienstleister dazu übergegangen ihre Dienstleistungsangebote durch das Anhängsel ‚Coaching‘ zu adeln. Diese Entwicklung hatte zur Folge, dass die Definition von Coaching immer mehr verwässerte. Vielen Kunden ist bei der Vielzahl der Coaching-Angebote nicht ganz klar, was man eigentlich unter Coaching verstehen kann. Trotz der vorherrschenden Unsicherheit und definitorischen Unschärfe werden Coaching-Dienstleistungen auf unterschiedlichen Qualitätsniveaus zu sehr unterschiedlichen Preisen angeboten und nachgefragt. Diese Preise reichen von null Euro im ehrenamtlichen Bereich bis hin zu Stundensätzen von 500 Euro. Die Entwicklung dieser Dienstleistung sowie die bestehende und vorherrschende Intransparenz auf dem deutschen Coaching-Markt bildeten den Anlass, sich einmal aus einer ökonomischen Perspektive heraus mit dem Thema Coaching zu beschäftigen. Unter Zuhilfenahme eines Mixed-Method-Approach sind in den letzten drei Jahren verschiedene Publikationen entstanden, von denen fünf diese kumulative Dissertation bilden. Diese Publikationen sind Teil einer explorativ-empirischen Untersuchung, welche sich mit dem deutschen Coaching-Markt unter verschiedenen wirtschaftswissenschaftlichen Aspekten beschäftigt. Der deutsche Coaching-Markt als Forschungsfeld wurde für die vorliegende Arbeit dazu auf Angebote und Nachfragen aus dem beruflichen Kontext beschränkt. Grundsätzlich wurde in dieser Arbeit dazu zwischen Life- und Business-Coaching-Angeboten unterschieden. Beim Life-Coaching werden primär private Anliegen und Anlässe bearbeitet. Beim Business-Coaching geht es um primär berufsbezogene Anliegen und Anlässe. Wenn im Weiteren also von Coaching die Rede ist, ist im Rahmen dieser Arbeit Business-Coaching gemeint

Using signals to reduce adverse selection and formulate seller positioning strategies in informal markets

Informal markets suffer from adverse selection. This problem is further compounded by the power and resource inequalities of the people who participate in these markets. In such markets, sellers face the dual challenge of reducing adverse selection and adopting positioning strategies that communicate their unique social positions. To understand how informal market sellers can resolve adverse selection and adopt unique positioning strategies, the study determines the impact of signals on three outcomes – increasing reliability/credibility, reducing price unfairness perceptions, and increasing price. First, a novel framework is developed that shows how word of mouth as the propagation medium is key in sustaining certain signals, while signals that require alternative propagation mediums do not function. Afterward, the study identifies both existing signals and contributes new signals - consistent selling locations, investments in product care, and percentage of credit offered - that can be sustained in informal markets, and shows how sellers with different resource levels can use separate signaling strategies to reduce adverse selection and uniquely position themselves compared to the competition. While high-resource sellers can signal using their financial resources and avoid threats of social isolation, low-resource sellers must signal using their social/personal reputation and thus risk social isolation if product quality is not as expected. Field study results show little buyer confidence in products exchanged, negative bias against low-resource sellers, and widespread use of pseudo-signals. Furthermore, optimal signaling strategies are devised that help sellers achieve the three key outcomes while overcoming differential impact of signals across outcomes. For low-resource sellers, the optimal signaling strategy is to offer a percentage of credit, while high-resource sellers should use calves attached, LPGs, fodder fed, and consistent locations. Lastly, the utility of the results in reducing reliance on pseudo-signals, increasing fairness for low-resource sellers, improving buyer confidence, and creating market interventions is discussed

Disseny d'un model d'avaluació de resultats de l'activitat de màrqueting per a empreses competint al mercat català i amb relació contractual amb els seus clients

L’objectiu de la tesi doctoral és el de desenvolupar un model que permeti valorar de forma objectiva les actuacions en matèria de màrqueting portades a terme per una organització. Aquest model està constituït per un conjunt de variables descriptives i quantitatives, anomenades variables de control, juntament amb una metodologia de càlcul i un sistema d’indicadors integrat que facilita la traçabilitat de les inversions de màrqueting i explicita la relació causa-efecte entre aquestes i el valor generat per a l’organització. El model s’utilitza per a valorar dades reals d’organitzacions que operin al mercat català i que compleixin la condició de basar la relació amb els seus clients en un model contractual (com veurem més endavant, és inviable aplicar un model comú per a tot tipus d’empresa). L’objectiu, doncs, és la valoració de l’acompliment dels seus objectius en relació als seus actius de mercat (marca i valor de client) i la creació d’un model específic, no generalitzable, per a aquest tipus d’empreses. Un segon objectiu d’aquest treball és l’anàlisi de les principals publicacions especialitzades referents des d’un punt de vista global i local, proposant en primer lloc una terminologia clara en relació a l’activitat de màrqueting, l’acompliment dels seus objectius i la conceptualització d’actius de mercat, i analitzant, en segon, l’impacte d’aquests àmbits i la seva evolució en els últims quinze anys. Alguns estudis previs (Llonch et al., 2002; Ambler i Xiucun, 2003; entre d’altres) es centren a comparar empreses per sectors, funcionalitats i països. És probable, com apunta Llonch et al. (2002) al fer això, que casuístiques atribuïbles a diferències geogràfiques i nacionals es tractin erròniament com a empresarials. A tal efecte, aquest estudi elimina la variabilitat per país i sector (parcialment, aquest darrer), proposant un model acotat, tal com recomanen Ambler et al., (2001), Llonch et al (2002), entre d’altres, que pugui servir de referència en la metodologia i en la validesa conceptual, i no tant en els resultats del model en un context més genèric. Pauwels (2009) demostra la relació entre la creació d’un model predefinit de variables i la millora del càlcul de l’eficiència en la despesa en màrqueting, pel que la creació d’aquest model integrat té l’objectiu d’esdevenir una eina de Gestió del Rendiment Corporatiu (GRC, en endavant1) (Bauer, 2004) aplicada a la gestió de màrqueting i els seus actius. Aquesta particularització del GRC rep el nom de Gestió del Rendiment de Màrqueting (GRM, en endavant2) (Ambler, 2000) i el seu objectiu és el d’augmentar la usabilitat i faciliti la generació d’informació per a la presa de decisions de la línia directiva de les organitzacions. L’abast de la tesi és el de crear el model des d’una perspectiva d’avaluació de l’activitat de màrqueting per part de la línia directiva, i no pas el desenvolupament informàtic d’una eina de suport a la presa de decisions ja que això, com apunten diversos autors (Dover, 2004; Schiff, 2008) i es tractarà amb més profunditat en el capítol 5, implicaria un nivell de personalització per cada empresa que no és objectiu d’aquesta tesi.The thes is aims to develop a practical model to asses m arketing perform ance within an organization. The model is basically structured around control metrics both from a qualitative and quantitatve approach, together with an integrated system of key performance indicators that enables marketing accountability through different organisational divisions, thus stating a solid cause/effect relationship between marketing activities and the value created for the organisation. The aformentioned model is used to assess marketing activites for catalan com panies with a contract-based customer relationship. Final assessment includes also a dynamic valuation of the company's market as sets . A second objective of the thes is is to review the current state of the art of marketing assessment literature from specialized journals both from a global and a local pers pective, defining a comprehensive list of related terms about marketing performance measurement, market-asset description and valuation and an accurate analysis about its evolution throughout the last 15 years.Postprint (published version

Signaling Quality Through Specialization

Firms frequently position themselves as specialists. An implication of specialization is that the firm has forgone alternative opportunities. In the context of effort-intensive categories, we show that a firm can signal quality to consumers by specializing. In the model, a firm must decide to provide one service offering or to market two services. By entering a single category, the firm incurs an opportunity cost of not entering the secondary profitable category, but may attain reduced costs. The net cost is the signaling cost that a high-quality type firm incurs to signal quality over a low-quality type firm. We show that in homogenous markets, a high-quality type firm signals its high-quality type by specializing in one category. When consumers are heterogeneous, the firm can signal its high-quality type by using prices alone in both the primary and secondary categories. However, specialization can be used as a secondary signal of quality in heterogeneous markets because of lower signaling costs. We also find that signaling using specialization is more likely in the presence of competition.specialization, signaling