Secondary markets have not historically possessed the characteristics necessary for market power to emerge, or effective product differentiation to be implemented. The potential effects of these characteristics on primary – secondary market interaction is generally not considered. The law of one price is expected to hold in secondary markets. By applying the hedonic technique to producer theory, and integrating the durability of the product directly into the profit maximizing conditions, potential differences in implicit prices between customer segments in the used bucket truck market are estimated. Applying weighted least squares to the hedonic equation, parameters were estimated to indicate whether differences in hedonic prices exist between customer segments in the secondary, utility construction equipment market. The hedonic approach accounted for differences in price due to physical characteristics, while underlying supply and demand conditions were accounted for using indicator variables for time. Estimated differences in the effects of physical characteristics on price, between industries, were identified using interaction terms. Results of the econometric estimation indicate that differences in physical product characteristics do not fully account for differences in price between customer segments in the secondary bucket truck market. If the law of one price can be violated in a secondary market, this could indicate market power. Future research on primary – secondary market interaction should consider the potential effects, if such market power does indeed exist.

Thesis (Ph. D.)--University of Missouri-Columbia, 1999. / Typescript. Vita. Includes bibliographical references (leaves 181-195). Also available on the Internet.

Thesis (Ph. D.)--University of Missouri-Columbia, 1999. / Typescript. Vita. Includes bibliographical references (leaves 181-195). Also available on the Internet.

This doctoral dissertation provides a framework for analyzing consumer's demand and firm's pricing strategy under a dynamic setting. The results bring new methods and empirical evidence to the existing literature within this realm. The first chapter evaluates retailers' choice of service even when service is not observed. Retailer optimization over service alters manufacturers' price setting and thus provides the required identification. Using new data containing wholesale prices from China's second largest wireless carrier, I construct and estimate a dynamic structural model including both demand and supply. I find that service has a significantly positive effect on expanding market demand; however, its impact subsides over time. I argue that this pattern provides a potential explanation for Apple's initial exclusive contract with China Unicom and subsequent contract arrangements. The second chapter is a joint work with Gautam Gowrisankaran and Marc Rysman. We develop and implement a new method for calculating price-cost margins in a durable goods environment. We study the industry of digital camcorders and analyze how margins differ across products, firms and time. We are particularly interested in the extent to which falling marginal costs explain falling prices. Using demand estimates and our new method, we generate non-parametric distributions of marginal costs that each firm expects for each product. We show that marginal cost falls dramatically by an average of $300 and that the price-cost margin is strongly correlated with quality. We also find that the market share is an important driver for the dynamic effects in our model. The last chapter investigates firm's price adjustment processes, with a particular focus on the micro-level determinants of the frequency of price changes. Using the same data as in the first chapter, I construct and estimate a model of the frequency of price adjustments within products. I find that the price of a high quality product tends to adjust more often. Older products are more likely to change price than newer ones. Also, firms are more responsive to seasonal effects than to market competition.

abstract: This dissertation focuses on consequences of public policy on consumption responses. Chapter 1 evaluates the effect of Thailand's car tax rebate scheme in 2012 on household consumption by examining aggregate and administrative data. Car sales doubled during the policy and dramatically declined afterwards while domestic household spending was sluggish following the policy, suggesting a substantial dampening effect of the policy on future household consumption. Chapter 2 develops a formal model to evaluate Thai household consumption responses. A life-cycle model of consumption and saving is developed with features including uninsured income risks, liquidity constraints, durable goods with embedded adjustment costs and non-homothetic preference in durable goods. Adjustment costs and liquidity constraints are important frictions in the evaluation of the shorter-term responses to changes in relative prices, while non-homotheticity captures the income effect given that cars are luxury goods in the Thai economy context. Key parameters and the partial equilibrium responses, which are key inputs to inform the aggregate outcome of the policy, are estimated. The results show that the car-tax rebates had a sizable impact on slowing Thai household consumption following the policy due to high level of elasticity of intertemporal substitution among Thai households. Chapter 3 examines the effect of public smoking bans in the EU countries. Using individual-level data, this chapter investigates whether nationwide smoke-free laws in Europe lead to higher smoking reduction and cessation rates among mature smokers. Exploiting the different timing in imposing smoking ban laws and using a difference-in-differences approach, I find that light smokers and heavy smokers were more likely to quit smoking after comprehensive bans were in place while there was no significant effect on average smokers. The results confirm that smoking bans, particularly when enforced more strictly and comprehensively, lead to higher smoking cessation rates even among mature smokers with well-established addiction. / Dissertation/Thesis / Doctoral Dissertation Economics 2018

Este trabalho desenvolve um modelo para explicar a expansão de consumo que freqüentemente sucede planos de estabilização baseados em congelamento de preços ou câmbio. A perspectiva adotada centra no consumo de bens duráveis e na dificuldade dos domicílios de proteger seus ativos da inflação. Uma redução repentina da inflação leva a uma queda do preço efetivo do bem de consumo durável, o que gera a expansão de consumo. O modelo é calibrado para o Brasil do período do plano Cruzado e são realizadas simulações supondo uma estabilização de preços permanente, uma com duração de 10 meses e outra de 3 meses. As duas primeiras apresentam uma expansão próxima, mas superior ao observado nos dados. A terceira simulação, porém, mostra uma expansão em torno de um quarto do observado. Também são discutidas variações no tempo médio de poupança para aquisição do bem durável e no consumo de bens não-duráveis. / This thesis presents a model to explain consumption booms after inflation stabilization plans centered on price and exchange rate controls. The focus is directed to durable goods and the difficulty for households to protect themselves from inflation. A sudden decrease in the inflation rate reduces durable goods effective price of consumption, leading to a boom. The model is then calibrated for mid-80s Brazil and three simulations are presented: one for a permanent stabilization of inflation and two temporary stabilizations, with a length of 10 and 3 months each. The first two present an expansion in the ownership of consumer durables that is slightly higher than what is shown in the data. The third simulation, on the other hand, presents a growth in ownership that is a quarter of the total seen in the data. Changes in the average savings period and in non-durables consumption are also discussed.

Este estudo aborda a adequação do Marketing de Relacionamento (MR) ao mercado de bens duráveis que, por definição, apresenta baixa taxa de recompra e interação entre cliente e empresa. O tema é relevante dado que o MR é pouco explorado nesse campo ao contrário dos serviços e negócios entre empresas (business to business), mercados com alto grau de recompra e/ou interações entre empresa e cliente. A proposta do estudo é verificar se e como o MR pode ser aplicado ao mercado de bens duráveis, a partir do entendimento do próprio MR, da cadeia produtiva de um mercado de bem durável e da atuação de uma empresa nesse mercado. Para se atingir os objetivos do estudo foi realizado um estudo de caso no mercado imobiliário residencial. A apresentação do caso está dividida em quatro partes principais: a parte introdutória discute a atuação da empresa em relação a diversos tópicos de marketing; a segunda parte descreve a cadeia produtiva da indústria da construção civil residencial; a terceira parte discute a natureza do produto imobiliário; e a quarta parte sumariza os principais pontos do programa de relacionamento com o cliente da empresa estudada no caso. Como resultados, descobriu-se que o mercado estudado é diferente de outros mercados de bens duráveis, principalmente pelo fato dos imóveis serem intangíveis no momento da venda. Além disso, os processos da cadeia produtiva da indústria da construção civil residencial se mostraram propícios para a aplicação do MR, pois os clientes dessa indústria são obrigados a se relacionar com a empresa durante o período de construção. Soma-se a esse fato o interesse do cliente em manter um relacionamento com a empresa, devido ao alto grau de envolvimento verificado na compra de imóveis. Ademais, a venda de um imóvel na planta apresenta características de serviços, campo em que o MR já é consolidado e, de forma complementar, a complexidade do processo de compra, recebimento e utilização do imóvel cria diversos encontros entre os clientes e as partes envolvidas, oportunidades para as empresas do setor criarem e cultivarem os relacionamentos. / The subject of this study concerns the relationship marketing applied to the durable goods market that presents, by definition, a low rate of repurchase and interaction between industry and clients. It becomes a relevant subject due to the fact that relationship marketing it is not well explored in this field unlike the services and business to business markets, that are well known by their high rate of repurchase and/or interactions. The proposition of this study is to verify if and how the relationship marketing can be applied to the durable goods market, from the understanding of the relationship marketing theory, of the production chain of the durable good market, and the operation of an industry of this segment. To accomplish the goals a case study in the residential real estate market was used. It is shown in four parts: the introductory part demonstrates how the company studied manages marketing, the second part shows how the production chain of the residential real estate market works, the third one discuss the nature of the real estate industries product, and finally, the fourth part summarizes the relationship marketing program of one big player of this market. The conclusions showed that the residential real estate market works differently from others durable goods, mainly due to the intangibility of the real estate under construction at the sales moment. And Also that the processes of the production chain of the residential real estate industry provide an extremely favorable environment for the application of the relationship marketing, because the clients of this industry are obligated to keep a relationship with the company during the construction time and the fact that the purchase of a real estate is a high involvement type turns the clients more interested in a relationship than ever. Other factor that contributed to support the findings were the fact that the selling of a residential real estate presents the services characteristics, field where the relationship market is consolidated and finally the complexity of the purchase, receive and use process creates many encounters between the clients and the other parts involved, opportunities for the companies of the sector to start and cultivate a relationships with the customers.

This dissertation comprises three individual chapters. Chapter Two examines how free riding across neighbors influenced the diffusion of color television sets in rural China. Chapter Three tests for asymmetric information between a firm’s management and other investors concerning its patent output. Chapter Four discusses how knowledge stocks influence a patenting firm’s later diversification. Chapter Two documents the existence of a type of network effects - free riding across neighbors - in the consumption of color television sets in rural China, which reduces the propensity of non-owners to purchase. I construct a model of the timing of the purchase of a durable good in the presence of free riding, and test its key implications using household survey data in rural China. Chapter Three tests for asymmetric information between a firm’s management and other investors about its patent output by examining insider trading patterns and stock price changes in R&D intensive firms. It demonstrates that management has considerable information about its patent output beyond what is known to investors. It also shows that the predictive power of insider trading patterns on patent output comes from purchases rather than sales. Chapter Four discusses two sequential channels through which knowledge stocks may influence a firm’s later diversification. One is that firms with more knowledge are more likely to enter a new industry. The other is that firms’ businesses have a better chance of surviving, conditional on being formed. By examining U.S. public patenting firms in manufacturing sectors for 1984-1996, I find that knowledge stocks predict the likelihood of new industry entry when controlling for firm size. However, this predictive power is weakened when diversification effects are included. On the other hand, a survival study of newly established segments shows that initial knowledge stocks have significant positive effects on segment survival, whereas diversification effects are insignificant.

Background: In the recents decades, one of humanity's biggest challenges has been the climatecrisis where emissions of greenhouse gases are the main problem. This has forced companies toact more environmentally friendly due to laws and regulations but also due to customer demand.Circular economy has become a hot topic with various definitions. One of the definitions isopen-loop supply chain and this essay will focus on explaining the concept of open-loop supplychain. Research question: 1. What can a business model look like for an intermediary for reusable durable goods in anopen-loop supply chain? 2. What challenges exist within reuse of durable goods between suppliers and intermediaries inan open-loop supply chain? Purpose: The purpose of this essay is to, through a multiple case study, develop a businessmodel on how intermediaries for reusable durable goods can work with an open-loop supplychain and how it can be applied in future industries. Method: Primary data through semi-structured interviews and secondary data through scientificarticles. Conclusion: The essay developed a business model for intermediaries for reusable durablegoods in an open-loop supply chain which is applicable to other industries. The essay alsodefined some of the challenges for intermediaries operating in an open-loop supply chain whichare transaction costs, building relationships, loss of control and long transportations. Furthermorethe level of relevance of these challenges depends on the amount of responsibility theintermediary has taken upon itself.

When purchasing durable goods, consumers not only pay for current but also future consumption; consequently, forward looking behavior is an important consideration in durable goods markets. For example, anticipating that prices will go down in the future, consumers may delay the purchase today; such behavior has a significant impact on the firm’s marketing strategies. This dissertation investigates the impact of durability on two marketing strategies: new product introductions and supply chain design. The first part of this dissertation (Chapter 3) examines a durable goods manufacturer’s new product introduction strategy under different market environments where network effects and product compatibility are important. More specifically, this part explores the incentives of a firm to use either a replacement strategy or a skipping strategy—in the former, the firm commercializes the existing technology, while in the latter, it does not; in either case, an improved technology will be available in the future and the firm will introduce a new product at that time. Using a two-period analytical model with network effects, the analysis shows how the level of improvement in the new product, along with the type of compatibility between the products, interacts with network strength to determine the manufacturer’s optimal strategy. Under gradual new product improvement, there is a strict preference for replacement. In contrast, under rapid new product improvement, that preference only holds in markets with relatively high levels of the network strength; at lower levels of the network strength, skipping is preferred; interestingly, for moderate values of the network strength, the level of product improvement affects the manufacturer’s optimal choice differently under varying types of compatibility. The second part of this dissertation (Chapters 4 and 5) focuses on the supply chain design decisions of a durable goods manufacturer who is a sole supplier of an essential proprietary component for making the end product. Three different supply chain structures iii are considered. In the first, the manufacturer operates as a “component supplier” and sells the component to a downstream firm who then makes the end product. In the second structure, the manufacturer produces the end product using its component but does not make that component available to any other firms; here, the manufacturer operates as a “sole entrant”. Finally, the manufacturer can operate as a “dual distributor” who not only makes the end product using its own component, but sells the component to a downstream firm who then competes against the manufacturer in the end product market. The extant literature on the optimal choice among the above supply chain structures has focused mainly on static settings in a framework of price competition. By contrast, researchers predominantly use quantity competition to examine durable goods markets in dynamic (i.e., multiple time period) settings. Moreover, the literature notes diversity in optimal firm behavior under the two types of (i.e., price and quantity) competition. Therefore, to transition from supply chain design in a static setting to a more dynamic one where consumers are forward-looking, this part utilizes Chapter 4 to analyze the manufacturer’s choice using quantity competition in a static setting. This analysis (in Chapter 4) identifies precisely the shift in the manufacturer’s choice of supply chain structure when moving from price competition to a quantity competition framework. With that analysis as a benchmark, the next chapter focuses on the manufacturer’s choice in a dynamic setting. More specifically, Chapter 5 investigates the impact of durability on the optimality of the supply chain structures identified above. Using a two period setting, the analysis explores how the manufacturer’s preference for different supply chain structures is modified. The findings reveal that, e.g., when durability is taken into account, the manufacturer’s preference for the sole entrant role goes up, while the preference for the component supplier role goes down. Further, under certain conditions, the manufacturer may opt to be a dual distributor in the first period and then choose to become only a component supplier in the second period. The underlying rationale for such shifts in preference iv is directly linked to durability, which creates future competition and substantially reduces the manufacturer’s profitability in the long run. Interestingly, this negative impact varies across different supply chain structures. Overall, this dissertation contributes to the current literature on durable goods and enhances our understanding of the impact of durability on the optimality of distinct marketing strategies, and provides insights that are valuable to both academics and managers.