Strategic complementarities between different types of ICT-expenditures

Multivariate Tobit models are estimated using German cross?sectional data to test whether strategic complementarities exist between expenditures in four different types of ICT?components. If two ICT?components are complements, they are correlated (provided that agents act rationally). Significant correlations between all four types of ICT?expenditures are found and can neither be removed by ?standard? firm heterogeneity control variables such as firm size, firms? workforce qualification structure nor by firms? ICT?structure so that indication for the presence of complementarities is provided. --strategic complementarity,ICT-investment,multivariate Tobit model

The impact of political announcements on expectations concerning the starting date of the EMU - A microeconometric approach to the detection of event-dependent answering patterns in business surveys

This paper examines German business survey data to uncover the influence of political news on expectations concerning the starting date of the European Monetary Union (EMU). In this survey the participants were asked to indicate whether they expect a punctual or a delayed start of the EMU. Alternatively, they could also tick a don't know category. It is shown that political news actually influence answering patterns. While good news have a negative impact on the probability to cross don't know, they do not influence the probability to expect a delayed EMU start. Bad news, such as the heated debate about the convergence criteria at the Amsterdam EU summit, have a positive impact on the probability to expect a delayed start. The empirical results show that survey results generally have to be carefully interpreted if news about the topic which is investigated in the survey occur. If answering patterns are actually influenced by such news, the usual way to interprete survey responses - treating them as if they were sent back at the very same day - can lead to severe misunderstandings. In this paper a simple microeconometric technique is suggested which makes it possible to detect if survey responses are affected by news. --Binomial probit model,Expectations,European Monetary Union,Event-dependent answering patterns,Survey data

A Note on Pricing and Efficiency in Print Media Industries

Actors on print media markets face two different (and interrelated) demand curves: the demand for copies and the demand for advertising space. This paper develops a realistic, yet simple, model of print media industries. In contrast to earlier studies, it takes into account that print media firms can neither set advertising space nor its price. A main finding of this paper is that competitive concerns regarding recent concentrations in print media industries are likely to be overstated since a print media firms? cover pricing is limited by its feedback on advertising demand. --print media,advertising,product pricing

Product innovation and product innovation marketing: theory and microeconometric evidence

This paper derives a three stage Cournot?oligopoly game for product innovation, expenditure on introducing the product and competition on the product market. Product innovation is assumed to increase consumer utility but is effective only if the innovating firm invests in marketing, so that consumers become aware of the newly developed product. Firms first decide whether or not to conduct product innovation and then determine their expenditure for bringing the new product to the market. In the final stage of the game, they are involved in competition on the product market. Key findings of the theoretical model are that both the marketing of a product innovation and a firm?s propensity to introduce an innovation decrease with an increase in the number of competitors and the degree of product substitutability. An increase in market demand has a positive effect on product innovation and marketing effort. These findings are tested empirically using survey data from 519 German service sector firms which mainly produce consumer goods. A simultaneous sequential Tobit model is applied in the empirical part of this paper. It turns out that the predictions of the theoretical model are supported by the empirical findings. --econometric models,game theory,new product research

The effects of website provision on the demand for German women's magazines

What happens to demand if a magazine launches a website? This question is empirically analyzed for the German women?s magazine market, a particularly large segment of the German magazine where fierce competition is reigning. Models for differentiated product demand are estimated on panel data covering the period 1990 to 2000, showing that website provision does not significantly affect magazines? market shares. Magazines that launched a website face a significantly lower price elasticity of demand than competitors that did not go online. Descriptive evidence on the magazines? website contents shows that websites are used to provide supplementary information and to advertise current print issues. --differentiated product demand models,magazines,instrumentalvariables estimation,panel data

Optimal Cover Prices and the Effects of Website Provision on Advertising and Magazine Demand

I derive and estimate a model for cover price setting in print media markets where actors are faced by two interrelated demand curves: the demand for the print medium and the demand for advertising space. Publicly available data on German women?s magazines observed between 1998 and 2001 are used in the GMM estimation. Main findings are that my estimated marginals cost coincide well with those of industry sources, magazines with a high circulation elasticity of advertising demand price markedly below marginal cost and website provision neither has a significant effect on magazine nor on advertising demand. Keywords: magazines, cost estimation, GMM estimation, website provision --magazines,cost estimation,GMM estimation,website provision