Advertising in a Competitive Market: The Role of Product Standards, Customer Learning, and Switching Costs

Standard models of competition predict that firms will sell less when competitors target their customers with advertising. This is particularly true in mature markets with many competitors that sell relatively undifferentiated products. However, the authors present findings from a large-scale randomized field experiment that contrast sharply with this prediction. The field experiment measures the impact of competitors' advertising on sales at a private label apparel retailer. Surprisingly, for a substantial segment of customers, the competitors' advertisements increased sales at this retailer. This robust effect was obtained through experimental manipulation and by measuring actual purchases from large samples of randomly assigned customers. The effect size is also large, with customers ordering more than 4% more items in some categories in the treatment condition (vs. the control). The authors examine how these positive spillovers vary across product categories to illustrate the importance of product standards, customer learning, and switching costs. The findings have the potential to change our understanding of competition in mature markets

How Sales Taxes Affect Customer and Firm Behavior: The Role of Search on the Internet

When a multichannel retailer opens its first retail store in a state, the firm is obligated to collect sales taxes on all Internet and catalog orders shipped to that state. This article assesses how opening a store affects Internet and catalog demand. The authors analyze purchase behavior among customers who live far from the retail store but must now pay sales taxes on catalog and Internet purchases. A comparable group of customers in a neighboring state serves as a control. The results show that Internet sales decrease significantly, but catalog sales are unaffected. Further investigation indicates that the difference in these outcomes is partly attributable to the ease with which customers can search for lower prices at competing retailers. The authors extend the analysis to a panel of multichannel firms and show that retailers that earn a large proportion of their revenue from direct channels avoid opening a first store in high-tax states. They conclude that current U.S. sales taxes laws have significant effects on both customer and firm behavior

Coking-Resistant Sub-Nano Dehydrogenation Catalysts: PtnSnx/SiO2 (n=4, 7)

We present a combined experimental/theoretical study of Pt$_n$/SiO$_2$ and Pt$_n$Sn$_x$/SiO$_2$ (n = 4, 7) model catalysts for the endothermic dehydrogenation of hydrocarbons, using the ethylene intermediate as a model reactant. Supported pure Ptn clusters are found to be highly active toward dehydrogenation of C2D4, quickly deactivating due to a combination of carbon deposition and sintering, resulting in loss of accessible Pt sites. Addition of Sn to Ptn clusters results in the complete suppression of C2D4 dehydrogenation and carbon deposition, and also stabilizes the clusters against thermal sintering. Theory shows that both systems have thermal access to a multitude of cluster structures and adsorbate configurations that form a statistical ensemble. While Pt4/SiO2 clusters bind ethylene in both di-sigma and pi-bonded configurations, Pt$_4$Sn$_3$/SiO$_2$ binds C2H4 only in the pi-mode, with di-sigma bonding suppressed by a combination of electronic and geometric features of the PtSn clusters. Dehydrogenation reaction profiles on the accessible cluster isomers were calculated using the climbing image nudged elastic band (CI-NEB) method

A new species of Pachycara Zugmayer, 1911 (Teleostei: Zoarcidae) from deep-sea chemosynthetic environments in the Caribbean Sea.

The 28th species of the eelpout genus Pachycara Zugmayer, 1911, is described from specimens collected from an active hydrothermal vent field at a depth of about 2300 m at the Mid-Cayman Spreading Centre of the Caribbean Sea. A tentatively identified early juvenile is recorded at a methane seep at a depth of 1049 m near Tobago. The new species is distinguished from its congeners mainly by its few pectoral fin rays, low vertebral counts, single, mediolateral branch of the lateral line system and presence of scales on the nape and cheeks

Ultracompact X-ray Binaries in Globular Clusters: Variability of the Optical Counterpart of X1832-330 in NGC 6652

Evidence is emerging that the luminous X-ray sources in the cores of globular clusters may often consist of, or perhaps even as a class be dominated by, ultracompact (P < 1 hr) binary stars. To the two such systems already known, in NGC 6624 and NGC 6712, we now add evidence for two more. We detect large amplitude variability in the candidate optical counterpart for the X-ray source in the core of NGC 6652. Although the available observations are relatively brief, the existing Hubble Space Telescope data indicate a strong 43.6 min periodic modulation of the visible flux of semi-amplitude 30%. Further, although the orbital period of the source in NGC 1851 is not yet explicitly measured, we demonstrate that previous correlations of optical luminosity with X-ray luminosity and accretion disk size, strengthened by recent data, strongly imply that the period of that system is also less than 1 hr. Thus currently there is evidence that 4 of the 7 globular cluster X-ray sources with constrained periods are ultracompact, a fraction far greater than that found in X-ray binaries the field.Comment: 10 pages including 2 figures and 1 table. Accepted for publication in The Astrophysical Journal Letter

Accurate Noise Projection for Reduced Stochastic Epidemic Models

We consider a stochastic Susceptible-Exposed-Infected-Recovered (SEIR) epidemiological model. Through the use of a normal form coordinate transform, we are able to analytically derive the stochastic center manifold along with the associated, reduced set of stochastic evolution equations. The transformation correctly projects both the dynamics and the noise onto the center manifold. Therefore, the solution of this reduced stochastic dynamical system yields excellent agreement, both in amplitude and phase, with the solution of the original stochastic system for a temporal scale that is orders of magnitude longer than the typical relaxation time. This new method allows for improved time series prediction of the number of infectious cases when modeling the spread of disease in a population. Numerical solutions of the fluctuations of the SEIR model are considered in the infinite population limit using a Langevin equation approach, as well as in a finite population simulated as a Markov process.Comment: 38 pages, 10 figures, new title, Final revision to appear in Chao

Decision Stages and Asymmetries in Regular Retail Price Pass-Through

We study the pass-through of wholesale price changes onto regular retail prices using an unusually detailed data set obtained from a major retailer. We model pass-through as a two-stage decision process that reflects both whether as well as how much to change the regular retail price. We show that pass-through is strongly asymmetric with respect to wholesale price increases versus decreases. Wholesale price increases are passed through to regular retail prices 70% of the time while wholesale price decreases are passed through only 9% of the time. Pass-through is also asymmetric with respect to the magnitude of the wholesale price change, with the magnitude affecting the response to wholesale price increases but not decreases. Finally, we show that covariates such as private label versus national brand, 99-cent price endings, and the time since the last wholesale price change have a much stronger impact on the first stage of the decision process (i.e., whether to change the regular retail price) than on the second stage (i.e., how much to change the regular retail price)