There are two main views of advertising – the informative view and the persuasive view. This thesis studies aspects of the informative view. One aspect of interest is whether firms can benefit from collusion on advertising even though advertising is only informative. If so, will this enhance or lower welfare? There are several reasons why firms may want to collude on adver­tising. First, the legal field is tilted in favour of nonprice collusion. Second, it is not at all obvious that collusion on price is more profitable than collusion on advertising and third, the analyses of Grossman and Shapiro (1984) and others show that profits can be increased by restricting advertising. In Paper 1, we examine firms’ incentives to collude on advertising and the implications for welfare. We find that collusion on advertising and competition on price is more profitable than competition on both price and advertising. We also find that semicollusion on advertising is detrimental to welfare. This suggests a need for monitoring, especially since it is in the interest of firms to restrict price advertising. We also compare semicollusion on price to semicollusion on advertising. We find that, in general, semicollusion on price does not lead to higher profits compared to semicollusion on advertising. Hence we lend theoretical support to the empirical literature that consistently find evidence of semicollusion on advertising rather than on price. Another important issue concerns the effect, on prices and profits, of ad-vertising only a subset of the product range. Many firms, in particular those in the retail sector, sell a wide variety of products but only advertise a few. Recent empirical evidence suggests that prices of unadvertised products are higher (Milyo and Waldfogel, 1999). Theoretically, little is known. In Paper 2, we study the effects of advertising only a subset of products. We allow for both low and high differentiation and, at the same time, we explicitly model the advertising decision. We find that the extend of differentiation between competing firms plays an important role in the analysis of loss leader pricing. When firms sell products with the same reservation price, loss leader pric­ing obtains only when differentiation is low. When products are less similar however, price competition is less intense and, as a result, firms advertise prices above marginal cost. Our loss leader pricing results enable us to shed some light on the seemingly paradoxical empirical findings in the marketing literature that loss leader pricing fails to increase store traffic, loss leader sales and hence to increase profits. We also consider a different subject – price discrimination. Although it is well understood that movements in the exchange rate have a bearing on firm profitability and hence affect firm behaviour, the role of exchange rate variability in the firm’s choice of the number of varieties to produce has (to my knowledge) not been explored. This, despite the fact that the product mix is an important aspect of firm strategy. By tinkering with the number of varieties, a firm can bolster its ability to extract consumer surplus. In Paper 3, we explore this issue. We show that variability in the exchange rate induces the firm to vertically segment markets (i.e., offer two varieties in each market). This happens because exchange rate variability affects income dispersion and hence the firm’s incentives to extract consumer surplus. To better extract surplus, the firm offers two price-quality menus, high quality variant (priced high) for top-end surplus extraction and a low quality variety (priced low) to address market coverage concerns. / <p>Diss. Stockholm : Handelshögskolan, 2005 S. 3-9: sammanfattning, s. 13-95: 3 uppsatser</p>

Denna uppsats undersöker hur efterfrågan av Chilenskt vin påverkas av importländernas inkomst, relativpriset på Chilenskt vin i förhållande till genomsnittspriset på den totala importen av vin, avståndet mellan handelsparterna och inhemsk vinproduktion i importlandet. Studien innefattar 15 OECD länder mellan åren 1998 och 2002. En utökad exportefterfrågefunktion ligger till grund för den empiriska undersökningen och resultaten visar signifikanta variabler med förväntade tecken. Vidare utvidgas ekvationen för att beakta tidseffekter, nämligen genom att inkludera genomsnittsvärdet på den beroende variabeln och dummy variabler för treårsperioder. Genom detta stiger förklaringsgraden i regressionen från 27,8 till 58,1 procent. De estimerade långsiktiga effekterna i efterfrågan för Chilenskt vin visar att en ökning med en procent av importörernas inkomst också ökar efterfrågan på Chilenskt vin med ungefär 0,8 procent. En lika stor ökning i relativpriset minskar efterfrågan med ungefär 0,3 procent. Ökat avstånd mellan handelsparterna med 1000 kilometer minskar efterfrågan med 16,6 procent. Om importören är ett vinproducerande land är efterfrågan 85 procent lägre än om landet inte producerar vin. Resultaten stämmer överens med teorierna om exportefterfrågan men skillnader mellan vinproducerande länder är i vissa fall stora. En anledning för detta kan vara skillnader i produktionsvolym av vin mellan länder, en annan att det finns starka kulturella associationer till inhemska produkter som gör att konsumenter föredrar inhemska produkter framför utländska. / This thesis examines how the export demand for Chilean wine is affected by importers income, relative prices, distance between trading partners and do-mestic wine production between 1988 and 2002 in 15 OECD countries. The empirical test is based on an extended export demand function, and the results show significant estimates with expected signs. Adjusting for time pe-riod specific effects by including dummy variables for three year periods and running the regression on the average values of Chilean export of wine in-creased the coefficient of determination from 27.8 to 58.1 percent. The long run effect on demand for Chilean wine indicates that a one percent increase in importers’ income raises demand for Chilean wine with about 0.8 percent. A similar increase in the relative price of Chilean wine to the world price of wine decreases demand with about 0.3 percent. Increasing distance with 1000 kilo-metres decreases demand for exports with approximately 16.6 percent. If the country is a wine producer demand is about 85 percent lower compared to non producing countries. The results are in line with the theories on export demand, however among the wine producing countries there are large differences among countries in their demand for Chilean wine. One reason could be different volume of own pro-duction, another cultural associations to domestic products making preferences biased towards the domestic variety.

In this dissertation, we study the interplay between a firm’s operations strategy, with regard to its capacity management, and its marketing decision of product differentiation. For this, we study a market comprising heterogeneous customers who differ in their preferences for time and price. Time sensitive customers are willing to pay a price premium for a shorter delivery time, while price sensitive customers are willing to accept a longer delivery time in return for a lower price. Firms exploit this heterogeneity in customers’ preferences, and offer a menu of products/services that differ only in their guaranteed delivery times and prices. From demand perspective, when customers are allowed to self-select according to their preferences, different products act as substitutes, affecting each other’s demand. Customized product for each segment, on the other hand, results in independent demand for each product. On the supply side, a firm may either share the same processing capacity to serve the two market segments, or may dicate capacity for each segment. Our objective is to understand the interaction between product substitution and the firm’s operations strategy (dedicated versus shared capacity), and how they shape the optimal product differentiation strategy. To address the above issue, we first study this problem for a single monopolist firm, which offers two versions of the same basic product: (i) regular product at a lower price but with a longer delivery time, and (ii) express product at a higher price but with a shorter delivery time. Demand for each product arrives according to a Poisson process with a rate that depends both on its price and delivery time. In addition, if the products are substitutable, each product’s demand is also influenced by the price and delivery time of the other product. Demands within each category are served on a first-come-first-serve basis. However, customers for express product are always given priority over the other category when they are served using shared resources. There is a standard delivery time for the regular product, and the firm’s objective is to appropriately price the two products and select the express delivery time so as to maximize its profit rate. The firm simultaneously needs to decide its installed processing capacity so as to meet its promised delivery times with a high degree of reliability. While the problem in a dedicated capacity setting is solved analytically, the same becomes very challenging in a shared capacity setting, especially in the absence of an analytical characterization of the delivery time distribution of regular customers in a priority queue. We develop a solution algorithm, using matrix geometric method in a cutting plane framework, to solve the problem numerically in a shared capacity setting. Our study shows that in a highly capacitated system, if the firm decides to move from a dedicated to a shared capacity setting, it will need to offer more differentiated products, whether the products are substitutable or not. In contrast, when customers are allowed to self-select, such that independent products become substitutable, a more homogeneous pricing scheme results. However, the effect of substitution on optimal delivery time differentiation depends on the firm’s capacity strategy and cost, as well as market characteristics. The optimal response to any change in capacity cost also depends on the firm’s operations strategy. In a dedicated capacity scenario, the optimal response to an increase in capacity cost is always to offer more homogeneous prices and delivery times. In a shared capacity setting, it is again optimal to quote more homogeneous delivery times, but increase or decrease the price differentiation depending on whether the status-quo capacity cost is high or low, respectively. We demonstrate that the above results are corroborated by real-life practices, and provide a number of managerial implications in terms of dealing with issues like volatile fuel prices. We further extend our study to a competitive setting with two firms, each of which may either share its processing capacities for the two products, or may dedicate capacity for each product. The demand faced by each firm for a given product now also depends on the price and delivery time quoted for the same product by the other firm. We observe that the qualitative results of a monopolistic setting also extend to a competitive setting. Specifically, in a highly capacitated system, the equilibrium prices and delivery times are such that they result in more differentiated products when both the firms use shared capacities as compared to the scenario when both the firms use dedicated capacities. When the competing firms are asymmetric, they exploit their distinctive characteristics to differentiate their products. Further, the effects of these asymmetries also depend on the capacity strategy used by the competing firms. Our numerical results suggest that the firm with expensive capacity always offers more homogeneous delivery times. However, its decision on how to differentiate its prices depends on the capacity setting of the two firms as well as the actual level of their capacity costs. On the other hand, the firm with a larger market base always offers more differentiated prices as well as delivery times, irrespective of the capacity setting of the competing firms.

In this dissertation, we study the interplay between a firm’s operations strategy, with regard to its capacity management, and its marketing decision of product differentiation. For this, we study a market comprising heterogeneous customers who differ in their preferences for time and price. Time sensitive customers are willing to pay a price premium for a shorter delivery time, while price sensitive customers are willing to accept a longer delivery time in return for a lower price. Firms exploit this heterogeneity in customers’ preferences, and offer a menu of products/services that differ only in their guaranteed delivery times and prices. From demand perspective, when customers are allowed to self-select according to their preferences, different products act as substitutes, affecting each other’s demand. Customized product for each segment, on the other hand, results in independent demand for each product. On the supply side, a firm may either share the same processing capacity to serve the two market segments, or may dicate capacity for each segment. Our objective is to understand the interaction between product substitution and the firm’s operations strategy (dedicated versus shared capacity), and how they shape the optimal product differentiation strategy. To address the above issue, we first study this problem for a single monopolist firm, which offers two versions of the same basic product: (i) regular product at a lower price but with a longer delivery time, and (ii) express product at a higher price but with a shorter delivery time. Demand for each product arrives according to a Poisson process with a rate that depends both on its price and delivery time. In addition, if the products are substitutable, each product’s demand is also influenced by the price and delivery time of the other product. Demands within each category are served on a first-come-first-serve basis. However, customers for express product are always given priority over the other category when they are served using shared resources. There is a standard delivery time for the regular product, and the firm’s objective is to appropriately price the two products and select the express delivery time so as to maximize its profit rate. The firm simultaneously needs to decide its installed processing capacity so as to meet its promised delivery times with a high degree of reliability. While the problem in a dedicated capacity setting is solved analytically, the same becomes very challenging in a shared capacity setting, especially in the absence of an analytical characterization of the delivery time distribution of regular customers in a priority queue. We develop a solution algorithm, using matrix geometric method in a cutting plane framework, to solve the problem numerically in a shared capacity setting. Our study shows that in a highly capacitated system, if the firm decides to move from a dedicated to a shared capacity setting, it will need to offer more differentiated products, whether the products are substitutable or not. In contrast, when customers are allowed to self-select, such that independent products become substitutable, a more homogeneous pricing scheme results. However, the effect of substitution on optimal delivery time differentiation depends on the firm’s capacity strategy and cost, as well as market characteristics. The optimal response to any change in capacity cost also depends on the firm’s operations strategy. In a dedicated capacity scenario, the optimal response to an increase in capacity cost is always to offer more homogeneous prices and delivery times. In a shared capacity setting, it is again optimal to quote more homogeneous delivery times, but increase or decrease the price differentiation depending on whether the status-quo capacity cost is high or low, respectively. We demonstrate that the above results are corroborated by real-life practices, and provide a number of managerial implications in terms of dealing with issues like volatile fuel prices. We further extend our study to a competitive setting with two firms, each of which may either share its processing capacities for the two products, or may dedicate capacity for each product. The demand faced by each firm for a given product now also depends on the price and delivery time quoted for the same product by the other firm. We observe that the qualitative results of a monopolistic setting also extend to a competitive setting. Specifically, in a highly capacitated system, the equilibrium prices and delivery times are such that they result in more differentiated products when both the firms use shared capacities as compared to the scenario when both the firms use dedicated capacities. When the competing firms are asymmetric, they exploit their distinctive characteristics to differentiate their products. Further, the effects of these asymmetries also depend on the capacity strategy used by the competing firms. Our numerical results suggest that the firm with expensive capacity always offers more homogeneous delivery times. However, its decision on how to differentiate its prices depends on the capacity setting of the two firms as well as the actual level of their capacity costs. On the other hand, the firm with a larger market base always offers more differentiated prices as well as delivery times, irrespective of the capacity setting of the competing firms.

Questa tesi studia da una prospettiva teorica le implicazioni della discriminazione del prezzo in oligopoli spaziali. Nel capitolo 1 presentiamo una raccolta selettiva dei principali articoli riguardanti discriminazione del prezzo e differenziazione del prodotto nel modello di Hotelling. Nel capitolo 2 studiamo l’incentivo per le imprese a discriminare quando la differenziazione del prodotto è endogena. Due diverse versioni di un gioco a tre stadi sono considerate. Nella prima versione, le imprese prima scelgono quale varietà produrre, poi scelgono se discriminare o non discriminare, e infine fissano i prezzi. Emerge un Dilemma del Prigioniero: le imprese discriminano e i profitti sono inferiori di quelli che sarebbero emersi in caso di prezzo uniforme. Nella seconda versione del gioco i primi due stadi sono invertiti: in questo caso, in equilibrio nessuna impresa discrimina e non c’è Dilemma del Prigioniero. Nel capitolo 3 studiamo la relazione tra sostenibilità della collusione e differenziazione del prodotto quando le imprese possono discriminare. Analizziamo tre schemi collusivi: collusione sui prezzi discriminatori, collusione su un prezzo uniforme, collusione per non discriminare. Otteniamo che la sostenibilità del primo e del terzo schema non dipende dalla differenziazione del prodotto, mentre la sostenibilità del secondo schema dipende negativamente della differenziazione del prodotto. / This thesis studies from a theoretical point of view the implications of price discrimination in spatial oligopolies. In Chapter 1, we provide a selective survey of the main contributions regarding price discrimination and product differentiation in the Hotelling framework. In Chapter 2 we study the firms’ incentive to price discriminate when product differentiation is endogenous. Two different versions of a three-stage game are considered. In the first version, firms first choose which variety to produce, then choose whether to price discriminate or not, then set prices. A Prisoner Dilemma arises: firms price discriminate and profits are lower than under uniform pricing. In the second version of the game, the first two stages are reversed: in this case uniform pricing emerges in equilibrium and there is not Prisoner Dilemma. In Chapter 3, we study the relationship between product differentiation and collusion sustainability when firms may price discriminate. Three different collusive schemes are analyzed: collusion on discriminatory prices, collusion on a uniform price, and collusion not to discriminate. We obtain that the sustainability of the first and the third scheme does not depend on product differentiation, while the sustainability of the second scheme depends negatively on product differentiation.

<p>Denna uppsats undersöker hur efterfrågan av Chilenskt vin påverkas av importländernas inkomst, relativpriset på Chilenskt vin i förhållande till genomsnittspriset på den totala importen av vin, avståndet mellan handelsparterna och inhemsk vinproduktion i importlandet. Studien innefattar 15 OECD länder mellan åren 1998 och 2002.</p><p>En utökad exportefterfrågefunktion ligger till grund för den empiriska undersökningen och resultaten visar signifikanta variabler med förväntade tecken. Vidare utvidgas ekvationen för att beakta tidseffekter, nämligen genom att inkludera genomsnittsvärdet på den beroende variabeln och dummy variabler för treårsperioder. Genom detta stiger förklaringsgraden i regressionen från 27,8 till 58,1 procent. De estimerade långsiktiga effekterna i efterfrågan för Chilenskt vin visar att en ökning med en procent av importörernas inkomst också ökar efterfrågan på Chilenskt vin med ungefär 0,8 procent. En lika stor ökning i relativpriset minskar efterfrågan med ungefär 0,3 procent. Ökat avstånd mellan handelsparterna med 1000 kilometer minskar efterfrågan med 16,6 procent. Om importören är ett vinproducerande land är efterfrågan 85 procent lägre än om landet inte producerar vin.</p><p>Resultaten stämmer överens med teorierna om exportefterfrågan men skillnader mellan vinproducerande länder är i vissa fall stora. En anledning för detta kan vara skillnader i produktionsvolym av vin mellan länder, en annan att det finns starka kulturella associationer till inhemska produkter som gör att konsumenter föredrar inhemska produkter framför utländska.</p> / <p>This thesis examines how the export demand for Chilean wine is affected by importers income, relative prices, distance between trading partners and do-mestic wine production between 1988 and 2002 in 15 OECD countries.</p><p>The empirical test is based on an extended export demand function, and the results show significant estimates with expected signs. Adjusting for time pe-riod specific effects by including dummy variables for three year periods and running the regression on the average values of Chilean export of wine in-creased the coefficient of determination from 27.8 to 58.1 percent. The long run effect on demand for Chilean wine indicates that a one percent increase in importers’ income raises demand for Chilean wine with about 0.8 percent. A similar increase in the relative price of Chilean wine to the world price of wine decreases demand with about 0.3 percent. Increasing distance with 1000 kilo-metres decreases demand for exports with approximately 16.6 percent. If the country is a wine producer demand is about 85 percent lower compared to non producing countries.</p><p>The results are in line with the theories on export demand, however among the wine producing countries there are large differences among countries in their demand for Chilean wine. One reason could be different volume of own pro-duction, another cultural associations to domestic products making preferences biased towards the domestic variety.</p>

La naturaleza potencialmente anticompetitiva de las prácticas impartidas desde las organizaciones de profesionales ha sido racionalizada por la literatura económica y ha ocupado un lugar no menor en la agenda de los organismos de defensa de la competencia. Sin embargo, la economía empírica carece de estudios sobre el ejercicio profesional autorregulado. Este trabajo relaciona los mercados de servicios profesionales con los modelos de diferenciación vertical y emplea un modelo Logit Mixto para evaluar la conducta del desempeño médico en Argentina. La evidencia hallada sugiere la existencia de algún acuerdo de precios. / The potentially anticompetitive nature of some practices driven by professional organizations has been approached in economic literature and appears as an important issue in the antitrust organism's agenda. However, empirical economics lacks of a self-regulated professionals analysis. This work relates the market for professional services with vertical product differentiation models and uses a Mixed Logit model to assess the medical profession behavior in Argentina. The evidence suggests the existence of a price arrangement. / Tesis de la Maestría en Economía, bajo la dirección de Fernando Navajas, de la Facultad de Ciencias Económicas de la Universidad Nacional de La Plata.

This thesis consists of four essays in economics related to the pharmaceutical market. The first essay, Pharmaceutical Pricing in a Regulated Market, compares the pricing of new pharmaceuticals in the Swedish market where prices are regulated, with the results of Lu and Comanor who studied the pricing of new pharmaceuticals in the US market. The results indicate that price regulation discourages the use of penetration strategies and decreases price competition between brand name drugs. The second essay, Innovativeness and Market Shares in the Pharmaceutical Industry, analyzes the pharmaceutical market in a model of horizontal and vertical product differentiation. The implications from the model are tested on data from the Swedish pharmaceutical market. Vertically differentiated drugs are found to gain larger market shares, command higher prices, and be less sensitive to substitutes than drugs that are only horizontally differentiated. The third essay, Generic entry before and after reference prices, examines the effect of the reference pricing system on generic entry in markets where brand name pharmaceuticals lose patent protection. The main result is that savings due to increased competition in markets affected by the reference pricing system may have been outbalanced by higher prices due to less competition in markets where the reference pricing system led to deterred entry. The fourth essay, Innovative Drugs and the Increase in Pharmaceutical Expenditures, seeks to establish the most important factors behind the growth in pharmaceutical expenditures. One important conjecture is that the change in the drug price index has little impact on the rate at which pharmaceutical expenditures grow. Instead, the introduction of new innovative drugs seems to be the most important driving force of the growth in pharmaceutical expenditures. / Diss. (sammanfattning) Stockholm : Handelshögsk., 2001

Las MiPymes peruanas son un grupo de empresas que conforman gran parte de la actividad económica del país, siendo el subsector confecciones el que ha logrado un crecimiento en general en los últimos años. Sin embargo, en el grupo de exportaciones de ropa de algodón para bebés, ha tenido una variación en los últimos 5 años, desde el año 2016 al 2020, ya que sus exportaciones no se han mantenido constantes; es decir, han tenido un crecimiento y decrecimiento cada año, lo cual genera una interrogante del motivo de esta variación pese a que de manera general el subsector de confecciones se mantiene sólida en crecimiento. Para ello, se realizó la presente investigación con la finalidad de conocer si los componentes de posicionamiento de marca, canal de distribución, diferenciación de producto y financiamiento pre – embarque actúan como limitadores de las MiPymes exportadoras de la región Lima de la partida 6209.20.0000 en su proceso de internacionalización al mercado de Estados Unidos en el periodo 2016 – 2020. En la presente investigación se ha utilizado una metodología de enfoque cualitativo basada en la recopilación de antecedentes nacional e internacional junto a entrevistas semiestructuradas a profundidad realizadas a expertos de tema y empresas MiPymes del subsector confecciones de ropa de algodón para bebés con la finalidad de obtener información sobre las limitantes. Obteniendo como resultado, que los componentes de posicionamiento de marca, diferenciación de producto y financiamiento pre – embarque son limitadores que influye negativamente en la competitividad de las MiPymes peruanas exportadora de ropa de algodón para bebés de la partida 6209.20.0000 del periodo 2016 – 2020. Mientras que el componente de canal de distribución no influye en la competitividad de las MiPymes de estudio. Asimismo, con la información recaba se hicieron hallazgos como la influencia positiva de apoyarse en la Marca Perú para lograr internacionalizarse, el uso de los canales digitales para lograr posicionarse en el mercado exterior, la importancia de brindar un servicio personalizado para lograr diferenciarse de la competencia y la importancia de contar con certificaciones para diferenciar el producto. / Peruvian MSMEs are a group of companies that make up a large part of the country's economic activity, with the apparel subsector being the one that has achieved growth in general in recent years. However, in the group of exports of cotton clothing for babies, it has had a variation in the last 5 years, from 2016 to 2020, since its exports have not remained constant; that is to say, they have had a growth and decrease every year, which raises a question of the reason for this variation despite the fact that in general the apparel subsector remains solid in growth. For this, the present investigation was carried out in order to know if the components of brand positioning, distribution channel, product differentiation and pre-shipment financing act as limiters of the exporting MSMEs of the Lima region of heading 6209.20.0000 in its process of internationalization to the United States market in the period 2016 – 2020. In this research, a qualitative approach methodology based on the collection of national and international antecedents has been used together with in-depth semi – structured interviews carried out with subject experts and MSMEs in the subsector of cotton clothing for babies in order to obtain information on the limitations. Obtaining as a result, that the components of brand positioning, product differentiation and pre-shipment financing are limiting that negatively influences the competitiveness of Peruvian MSMEs exporting cotton clothing for babies of heading 6209.20.0000 for the period 2016 – 2020. While the distribution channel component does not influence the competitiveness of the study MSMEs. Likewise, with the information collected, findings were made such as the positive influence of relying on the Peru Brand to achieve internationalization, the use of digital channels to achieve a position in the foreign market, the importance of providing a personalized service to differentiate itself from the competition. and the importance of having certifications to differentiate the product. / Tesis

Diploma thesis uses theoretical knowledge of the logistics procurement and applies them to specific business entity. The acquired information is used for proposals improving allocation of suppliers and supply management. The analysis of suppliers as well as the improvement of the information flow are two main benefits of the work. The study of feasibility and the strategy of the product differentiation determine the conditions implementing these suggestions of improvement.