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Languages : en
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In North America, automobile prices are largely determined through negotiation. Recognizing that some consumers have a strong aversion to negotiation, some manufacturers and dealers are now offering consumers the option of buying cars at a "no-haggle", or fixed price. This dissertation consists of three essays which address how a fixed price alternative impacts both consumer behavior and firm strategies. The first essay explores the conditions under which a dealer would simultaneously offer a "no-haggle" Internet price and a negotiable price on the lot (which we term a dual-channel), and studies the marketing strategies adopted under this structure. We use consumer haggling cost as a key to understanding a dealer's choice of pricing strategy. We find that a dual-channel is optimal for the dealer when there is sufficient diversity in consumer haggling cost. We also find that it is optimal for a dealer to specify a higher-than-cost "minimum acceptable price" to the salesperson as a price floor for negotiations. Surprisingly, a dual-channel may serve fewer customers while still being more profitable than a single channel structure. The second essay examines the competitive implications of a no-haggle pricing policy. By using Toyota's fixed pricing policy in Canada as a natural experiment, we explore the impact of such a strategy on the prices and sales of Toyota and that of its close competitor, Honda. We find that the program has had important competitive consequences. While prices of both Toyota and Honda were higher in provinces with the program, there was an increase in Honda's sales but with no effect on the sales of Toyota. The third essay determines the impact of a consumer's bargaining behavior and information she collects on the final price paid. Using an extensive dataset, we find that a consumer's negotiation skill and attitude toward negotiating significantly influences the negotiation outcome. In particular, consumers that enjoy negotiating have a greater.
Author:
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Category :
Languages : en
Pages :
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Book Description
In North America, automobile prices are largely determined through negotiation. Recognizing that some consumers have a strong aversion to negotiation, some manufacturers and dealers are now offering consumers the option of buying cars at a "no-haggle", or fixed price. This dissertation consists of three essays which address how a fixed price alternative impacts both consumer behavior and firm strategies. The first essay explores the conditions under which a dealer would simultaneously offer a "no-haggle" Internet price and a negotiable price on the lot (which we term a dual-channel), and studies the marketing strategies adopted under this structure. We use consumer haggling cost as a key to understanding a dealer's choice of pricing strategy. We find that a dual-channel is optimal for the dealer when there is sufficient diversity in consumer haggling cost. We also find that it is optimal for a dealer to specify a higher-than-cost "minimum acceptable price" to the salesperson as a price floor for negotiations. Surprisingly, a dual-channel may serve fewer customers while still being more profitable than a single channel structure. The second essay examines the competitive implications of a no-haggle pricing policy. By using Toyota's fixed pricing policy in Canada as a natural experiment, we explore the impact of such a strategy on the prices and sales of Toyota and that of its close competitor, Honda. We find that the program has had important competitive consequences. While prices of both Toyota and Honda were higher in provinces with the program, there was an increase in Honda's sales but with no effect on the sales of Toyota. The third essay determines the impact of a consumer's bargaining behavior and information she collects on the final price paid. Using an extensive dataset, we find that a consumer's negotiation skill and attitude toward negotiating significantly influences the negotiation outcome. In particular, consumers that enjoy negotiating have a greater.
Author: Dennis Alden Yao
Publisher:
ISBN:
Category : Industrial policy
Languages : en
Pages : 296
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Author: Samir Amin
Publisher: NYU Press
ISBN: 158367425X
Category : Business & Economics
Languages : en
Pages : 83
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Book Description
In this slim, insightful volume, noted economist Samir Amin returns to the core of Marxian economic thought: Marx’s theory of value. He begins with the same question that Marx, along with the classical economists, once pondered: how can every commodity, including labor power, sell at its value on the market and still produce a profit for owners of capital? While bourgeois economists attempted to answer this question according to the categories of capitalist society itself, Marx sought to peer through the surface phenomena of market transactions and develop his theory by examining the actual social relations they obscured. The debate over Marx’s conclusions continues to this day. Amin defends Marx’s theory of value against its critics and also tackles some of its trickier aspects. He examines the relationship between Marx’s abstract concepts—such as “socially necessary labor time”—and how they are manifested in the capitalist marketplace as prices, wages, rents, and so on. He also explains how variations in price are affected by the development of “monopoly- capitalism,” the abandonment of the gold standard, and the deepening of capitalism as a global system. Amin extends Marx’s theory and applies it to capitalism’s current trajectory in a way that is unencumbered by the weight of orthodoxy and unafraid of its own radical conclusions.
Author: Aidin Tajzadeh Namin
Publisher:
ISBN:
Category : Automobile industry and trade
Languages : en
Pages : 266
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Book Description
With three essays, this dissertation focuses on investigating demand and pricing policies for short life cycle goods, and studies consumer search behavior and choice for automobiles. The former comprises the first two dissertation essays (Chapters 2 and 3) in which I specifically focus on fashion products by using a unique dataset from a well-known U.S. fashion retailer. The final essay (Chapter 4) concentrates on the automobile industry in the US where efficiency of search outcome through various search sources for cars is studied. In the first essay (Chapter 2), using data on women's coats, I combine revenue management and durable goods literature to develop a demand model which estimates sales at every price markdown level at each time period of the fashion season. The demand model is estimated using the General Method of Moments (GMM). Next, I run simulations to study the demand variations based on different pricing policies. I find price markdowns which are not deep and are implemented early in the season to maximize the retailer's revenue levels. In the second essay (Chapter 3), I use a Finite Mixture Model (FMM) to find latent classes based on fashion product characteristics for women's and men's coats in the US. I develop a dynamic programming model and solve it with the class-specific coefficients of the FMM model. Results provide the retailer with the optimal (1) timing and (2) depth of markdowns given fashion product characteristics at each time period. The optimal markdown policy offers over 3% increases in retailer¿s revenue. In the third essay (Chapter 4) I investigate customer search efficiency for automobiles. Having data on car specifications, I use Data Envelopment Analysis (DEA) technique to measure the efficiency of cars based on the value of their attributes per dollar spent (price). Next using survey data on consumer search time and final choice, I use the estimated efficiency parameters to investigate the contribution of each search source in making a car choice. I find customers who search using online and offline third party sources purchase more efficient cars, while males and those who knew the manufacturer prior to purchase buy less efficient cars.
Author: Sangsoo Park
Publisher:
ISBN:
Category : Automobile industry and trade
Languages : en
Pages : 134
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This dissertation consists of three essays on the energy efficiency and pricing behavior of firms in the U.S. automobile market with a focus on Hybrid Electric Vehicles (HEVs). The first essay analyzes the market share of HEVs and evaluates consumers' willingness to pay (WTP) for future fuel cost savings by purchasing fuel efficient HEVs. Estimates of consumers' WTP for future fuel cost savings and the finding of an implicit discount rate of 8.35%~14.35% suggest that consumers undervalue future fuel cost savings from purchasing HEVs, and that consumers want a return on their investment on fuel cost saving HEV technology in 7~11 years. The second essay empirically investigates the existence of quality-based price discrimination in the U.S. automobile market. By estimating a structural model of demand and supply in the automobile market, I can recover marginal costs, markups and percentage markups for all vehicle models sold between 2000 and 2013. The extent of price discrimination is then examined by comparing markup and percentage markup differences between HEVs and gasoline vehicles. The results demonstrate that automobile manufactures charge both higher markups and higher percentage markups on their HEV models. On average, HEVs have higher markups by 11.1% compared to gasoline vehicles, and Toyota, a leader in the HEV market, charges higher markups on their HEV models compared to other manufacturers. The Toyota Prius, the top-selling hybrid car in the U.S. market, particularly enjoys a higher markup and percentage markup than other competitive vehicles. The third essay provides a model of the automobile market where consumers have heterogeneous preferences, caring about both the environment and the physical quality of the product--specifically its fuel economy. Many of the results found by the model are to be expected: consumers buy fewer vehicles when the environmental damages (emissions) and prices of vehicles increase; more vehicles are sold when vehicles are equipped with better fuel technology; and consumers buy fewer vehicles as they become more pro-environmental. One unexpected finding stands out: a tax on gasoline vehicles always decreases total emissions, while a subsidy for environmentally friendly HEV adoption may not.
Author: Steven G. Thorpe
Publisher:
ISBN:
Category : Air
Languages : en
Pages : 218
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Book Description
Author: Timothy Francis Bresnahan
Publisher:
ISBN:
Category :
Languages : en
Pages :
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Author: Lori Lynn Parcel
Publisher:
ISBN:
Category :
Languages : en
Pages : 362
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Author: Timothy F. Bresnahan
Publisher:
ISBN:
Category :
Languages : en
Pages :
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Author: Shyh-Fang Ueng
Publisher:
ISBN:
Category : Competition
Languages : en
Pages : 118
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Book Description
This research investigates three issues related to the economic performance of oligopolistic markets where firms produce differentiated products and compete in prices. First of all, this dissertation uses a Markov Perfect Equilibrium approach with fixed periods of commitment of actions to answer the question of what prices a duopolists will charge in equilibrium if they produce horizontally differentiated products, move alternatingly, and compete in prices forever. It is found that firms charge prices which are higher than Nash equilibrium prices but lower than the fully collusive equilibrium prices. Also, contrasted with the Nash equilibrium of the one-shot constituent game, the firm having the significantly higher demand responsiveness to its own price always charges a lower price than the other firm does although it has higher marginal cost. The dissertation then proceeds to study whether a firm can overcome its cost disadvantage by upgrading its product over the rival's, and if so, whether there exists a profit-division which will induce the low cost firm and the high cost firm to collude and no one has an incentive to cheat. The results show that (1) the ability of upgrading the product over the rival's can allow a high cost firm to earn higher profit than a cost advantaged low cost firm; (2) there exists at least one profit-division which can sustain full collusion; and (3) in the collusive equilibrium firms enlarge their quality differences to alleviate the price tension between their products. Finally, this work investigates the welfare effect of mergers which occur in an oligopolistic industry where firms produce differentiated products. It is shown that for the merger to be socially beneficial, the number of the merging firms must be less than the total number of firms in the industry minus the ratio of the products' own elasticity to cross elasticity. The analysis indicates that the welfare effect of a merger of a specific size depends on the substitutability among products of the industry.
