Manufacturer Strategy on Service Provision in Competitive Channels

A manufacturer commonly distributes through a set of retailers who are authorized to sell its product; demand-enhancing services may also be provided by the manufacturer. These services may be granted to all authorized retailers (uniform service provision) or to a favored few authorized retailers (differential service provision). To determine when a manufacturer does—or does not—bestow equal service levels, we develop a model of one manufacturer selling through two competing retailers. We find manufacturer optimality to entail uniform service at some parametric values, while differential service is optimal at other values. Counterintuitively, with differential service, the recipient of lower service may be better off than it would be with higher service. Equally surprisingly, there are conditions for which the high-service retailer prefers its rival to also receive a high level of service—but only if its rival is sufficiently small. While the three channel members often have different service-provision preferences, there are also parametric values that place them in harmony with either differential or uniform service provision. Retailers sharing the cost of manufacturer-provided service need not lessen firms’ preference confliction over the preferred service provision but can improve channel efficiency when the cost-sharing rate is relatively low. We also investigate the effect of retailer-provided services and the impact of service asymmetry level

The State of the Art in Modeling Migration in LDCS: A Comment

Early research on migration in LDCs, initially motivated by labor market postulates offered by Harris and Todaro, built upon general equilibrium models of interregional trade. In contrast, recent research on migration (such as Brueckner and Kim in this issue) builds upon a partial equilibrium analysis that is based on an urban land model. There are subtle differences between these models that complicate intermodel comparisons. The current paper, motivated by this complexity, has three purposes: (1) a mathematical explication of the state of the art in migration modeling, (2) a provision of further insights into the Todaro paradox, and (3) a suggestion for future research predicated on melding the urban land and interregional literatures. Copyright 2001 Blackwell Publishers

Merchandising decisions: a new view of planning and measuring performance

Expanding the scope of factors considered in evaluating return on investment can assist front line managers in making realistic decisions about inventory. Several factors that directly account for profitability and are within the purview of front line managers are discussed and means of optimizing their relationships are discussed

The Effect of Municipal Services and Local Taxes on Housing Values

This paper presents an economic model which casts the "Tiebout Hypothesis" in a Von Thumen type model of spatial equilibrium and considers the effect of differential provision of municipal services on household utility levels and housing prices in a politically fragmented urban area. Also in the context of this model three alternative methods of financing municipal services are examined. The article suggests that different levels of municipal services may cause spatial disequilibrium in an urban area, and as households move within the urban area to maximize their utility, they bid up (or down) the price of housing to the extent that their consumer's surplus is capitalized in housing values. Thus, the resultant urban rent gradient may be "kinked" or discontinuous. This paper also presents empirical findings examining the relationship between housing values and several municipal services. Copyright American Real Estate and Urban Economics Association.

A Note on Multi-Regional Marketing

This paper examines the profit maximizing behavior of a vertically integrated firm that operates in "n" geographically distinct regions. A pair of alternative managerial decision scenarios are considered. In one scenario, all marketing mix variables are manipulated at the regional level, so that each region may choose different levels of each marketing variable. In the second scenario, one marketing variable is manipulated "globally," so that its level is identical in all regions. The first scenario generates an n-region version of the "Dorfman-Steiner" first-order conditions for profit maximization. However, under some cost structures the profits associated with this Dorfman-Steiner scenario are dominated by those associated with the second, "Global-Regional" scenario. This second scenario yields an optimal solution in which the global marketing variable may have a negative marginal impact on sales in some regions. As a result, some managerial implications of the second scenario differ strikingly from those of the Dorfman-Steiner scenario.marketing, marketing mix, resource allocation, segmentation