Market Mechanisms and the External Benefits of Consumption

Abstract

The consumption or use of a number of goods and services can yield real benefits to nonusers. The consumption of goods yielding external benefits differs from several related phenomena-notably, meritorious behavior, the production and use of public goods, the reduction of negative externalities, and the possibility of consumption surprises. Many goods and services that yield external benefits constitute sets of differentiable substitutes. Furthermore, potential third-party beneficiaries may hold not only diverse preferences for external benefits but also diverse preferences for the alternative goods and services that create these benefits. Finally, markets, if restricted to simple bilateral exchange structures, can mistakenly appear to fail in the case of external benefits. These observations lead to the development of (1) an analytic framework addressing heterogeneous supply and demand and incorporating generalized exchange structures and (2) a typology of market situations for external benefits of consumption that suggests several alternatives to conventional public policies.

Macromarketing approaches to thought development in positive marketing: Two perspectives on a research agenda for positive marketing scholars

“…This is as much an assumption as a finding. Second, institutions play a critical role in developing environments for marketing systems to flourish (Cadeaux, 2000). This means that formal institutions such as rule of law, as well as informal institutions like ethical norms, guide the success or failure of marketing systems.…”

“…Because markets embed in webs of social, political and economic relationships, positive or negative outcomes can affect both parties and nonparties to transactions, generating negative and positive externalities (Cadeaux, 2000). These include problems such as air pollution and carbon emissions (negative), or the prevention of flu epidemics through the widespread use of vaccines (positive).…”

A Rose by Any Other Name? The Influence of Brand Name versus Chemical Differences in the Prescription of Antidepressants

“…Analysis of the plot of means in Figure 1 of some macromarketing scholars that products may be produced which have no social benefit, e.g offer some unique product benefits, since they may be merely different brands of the same generic product (Cadeaux 2000 andLehmann 2006). …”

“…Predicaments of great interest to marketers emanate from the branding of prescription drugs, in particular antidepressants (e.g., Donoghue et al 1996;Economist 2001Economist , 2004Oldani 2004;Olfson et al 1998;Randolph and Viswanath 2004;Wagner and McCarthy 2004). Macromarketing issues related to the marketing of pharmaceutical drugs, like antidepressants, which do not cure an illness per se include concerns that the development of new drugs are that in some cases they may not yield substantive improvements in social benefits, such as improvements in affordable health because of the concern for private benefits, for example, profits (Lehmann 2006 andCadeaux 2000). The consumers of antidepressants, the mentally ill, may also be considered as vulnerable consumers (Baker, Gentry andRittenburg 2005 andRingold 2005), therefore, will rely on the advice of suitable treatments based on the advice of medical specialists.…”

Drivers of corporate community involvement and challenges in measuring its impact

“…However, despite increased attention toward CCI, most companies have not clearly understood the impact of their CCI to the extent that as it produces externalities to recipients. Externalities are costs or benefits which are not transmitted through price and are known as spillover benefits or external benefits (Buchanan & Faith, 1981;Cadeaux, 2000). Daudigeos & Valiorgue (2011) argue that how firms face different social issues depends on the type of 'negative externalities' they impose on their particular's stakeholders.…”