Dual role of price and myopia in a marketing channel

Martín‐Herrán, Guiomar; Taboubi, Sihem; Zaccour, Georges

doi:10.1016/j.ejor.2011.12.015

Cited by 57 publications

(30 citation statements)

References 38 publications

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“…The first stream focusing on the myopic behaviour in the marketing channel includes Robinson and Lakhani (1975), Bass and Bultez (1982), Rao and Bass (1985), Kopalle, Mela, and Marsh (1999), Taboubi and Zaccour (2002), Fibich, Gavious, and Lowengart (2003), Jørgensen, Taboubi, and Zaccour (2003), Popescu and Wu (2007), Martín-Herrán, Rubel, and Zaccour (2008), Benchekroun, Martín-Herrán, and Taboubi (2009), Gutierrez andHe (2011), Chiang (2012) and Downloaded by [Rutgers University] at 02:30 24 August 2015 Martín-Herrán, Taboubi, and Zaccour (2012). Among this stream of literature, the following papers are particularly related to our study because they examine the myopia in the case of bilateral monopoly.…”

Section: Literature Reviewmentioning

confidence: 95%

“…The former indicates that the manufacturer will be better off with a myopic retailer under some conditions, while the latter shows that both the manufacturer and the retailer are better off in the long run when they ignore the impact of current prices on future demand and focus on immediate-term profits. Martín-Herrán, Taboubi, and Zaccour (2012) study and compare the pricing and investment strategies and pay-offs under two scenarios of a myopic retailer and a far-sighted retailer by numerical analysis. The essential difference between this stream of literature and our work is that we integrate the quality decision and pricing strategies and study how the manufacturer's myopia affects the price-quality relationship in a marketing-operations interface.…”

Section: Literature Reviewmentioning

confidence: 99%

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Myopic vs. far-sighted behaviours in a revenue-sharing supply chain with reference quality effects

Liu

Sethi

Zhang

2015

International Journal of Production Research

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In this paper, we consider a dynamic supply chain where a manufacturer produces and distributes a featured product through an exclusive retailer to end consumers. The manufacturer decides the product quality and wholesale price, while the retailer sets the retail price in the presence of a revenue-sharing contract and consumers' reference quality effects. The objective of this study is to investigate the impacts of myopic behaviour regarding the reference quality on the product quality and pricing strategies and profits of both members. Our results suggest that the manufacturer's myopia leads to a higher quality, higher price strategy and a higher quality-price ratio which benefits consumers. Meanwhile, relative to the far-sighted behaviour, myopia results in a more quality-sensitive but less price-sensitive market demand. What's more, we find that the manufacturer is apt to act in a far-sighted way, but the retailer isn't always willing to cooperate with a far-sighted manufacturer. Taking myopic strategies for both members is likely to gain a high profit of the whole supply chain for a relatively high marginal contribution of product quality on demand and a relatively low revenue-sharing proportion.

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Section: Literature Reviewmentioning

confidence: 95%

Section: Literature Reviewmentioning

confidence: 99%

Myopic vs. far-sighted behaviours in a revenue-sharing supply chain with reference quality effects

Liu

Sethi

Zhang

2015

International Journal of Production Research

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“…If s is large enough no country has an incentive to become farsighted 10 . For s ∈ (s, s + ) the sign of the gains from foresight depends on P 0 .…”

Section: Mn Ssmentioning

confidence: 99%

“…Therefore, it is not clear in a game that, with more players, the set of parameters where a myopic player would gain from foresight shrinks. 10 To compare threshold valuesŝ, s ands in Proposition 1 (where M = N = 1) to the thresholdss and s + (from Results 1 and 2) we ran numerical simulations with r ∈ {0.1, 0.5, 1} and k ∈ {0.1, . .…”

Section: Mn Ssmentioning

confidence: 99%

The impact of foresight in a transboundary pollution game

Benchekroun

Martín‐Herrán

2016

European Journal of Operational Research

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We study the impact of foresight in a transboundary pollution game; i.e. the ability of a country to control its emissions taking into account the relationship between current emissions and future levels of pollution and thus on future damages. We show that when all countries are myopic, i.e., choose the 'laisser-faire' policy, their payoffs are smaller than when all countries are farsighted, i.e., non-myopic. However, in the case where one myopic country becomes farsighted we show that the welfare impact of foresight on that country is ambiguous. Foresight may be welfare reducing for the country that acquires it. This is due to the reaction of the other farsighted countries to that country's acquisition of foresight. The country that acquires foresight reduces its emissions while the other farsighted countries extend their emissions. The overall impact on total emissions is ambiguous. Moreover, our results suggest that incentive mechanisms, that involve a very small (possibly zero) present value of transfers, can play an important role in inducing a country to adopt a farsighted behavior and diminishing the number of myopic countries. These incentives would compensate the myopic country for the short-run losses incurred from the acquisition of foresight and can be reimbursed by that country from the gains from foresight that it enjoys in the long run. JEL Classification: C73, D90, Q59.

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“…CPI measured by retail prices affects both consumers' product perceptions and decisions. Historic CPI contributes to the construction of an internal reference price (Martín-Herrán, Taboubi, & Zaccour, 2012). We thus set the CPI in the current quarter as the external reference price which is the most common price in the apparel product category.…”

Section: Monetary Reference Levelmentioning

confidence: 99%

Consumer Ironic Consumption: Luxury Apparel Purchase Rebounds in a Dismal Economy

Liao¹,

Wang²

2015

JMM

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This study addresses and investigates consumer ironic purchase rebounds from restrained luxury consumption during the recent economic recession period. Analyses are based on 51 luxury and non-luxury brands' sales data in the USA and Europe and monthly national economic data in these areas from year 2008 to year 2011. The results reveal signals of consumer ironic luxury consumption catalyzed by social purchase climate that releases consumers from psychological suppression of buying desire due to economic hardship. Also, the secondary effect of Ironic purchase postulated the limitation of the buying rebound when longer suppression. In addition, the buying rebound patterns indicate brand loyalty towards some specific luxury brands. Finally, monetary changes appear not a prominent factor in undermining the final ironic effect on sale and thusly the potential confounding influence of price changes on ironic consumption is excluded. In all, the study explains why luxury brands remain strong in economic suppression.

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Dual role of price and myopia in a marketing channel

Cited by 57 publications

References 38 publications

Myopic vs. far-sighted behaviours in a revenue-sharing supply chain with reference quality effects

Myopic vs. far-sighted behaviours in a revenue-sharing supply chain with reference quality effects

The impact of foresight in a transboundary pollution game

Consumer Ironic Consumption: Luxury Apparel Purchase Rebounds in a Dismal Economy

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