an analysis of the tradeoff between advertising and price discounting the authors examine an important influence on the price advertising tradeoff the ratio of price and advertising elasticities their theoretical analysis stresses the centrality of the elasticity r

marketing s impact on firm value generalizations from a meta analysis abstractthe interest in the value relevance of marketing investments has given rise to numerous studies on the marketing finance interface this study integrates extant research findings and establishes empirical generalizations on marketing s impact on firm value specifically the authors conduct a meta analysis of prior econometric elasticity estimates of the stock market impact of marketing actions and marketing assets analyses based on 488 elasticities drawn from 83 studies reveal a mean elasticity of 04 for advertising expenditure variables and of 54 for marketing asset variables among marketing assets customer related assets show a higher mean elasticity of 72 compared with 33 for brand related assets further analyses show that advertising elasticities are lower in more concentrated industries and that marketing asset elasticities are higher during recession times researchers should also be aware that characteristics of the research design e g the type of firm value metric used the om

estimating elasticities with pims data methodological issues and substantive implications though the pims data have been used extensively to relate profitability both to specific firm marketing actions and to market conditions no attempt has been made to estimate directly the magnitudes of marketing mix elasticities the authors propose and evaluate a simple cross sectional time series regression method that recovers unbiased estimates of the elasticities despite the presence of firm specific disguise factors in the database though measurement error creates instability for certain variables the recovered elasticities compare favorably with those found in previous research and have predictable relationships with market characteristics

do doctors practice defensive medicine defensive medicine is a potentially serious social problem if fear of liability drives health care providers to administer treatments that do not have worthwhile medical benefits then the current liability system may generate inefficiencies much larger than the costs of compensating malpractice claimants to obtain direct empirical evidence on this question we analyze the effects of malpractice liability reforms using data on all elderly medicare beneficiaries treated for serious heart disease in 1984 1987 and 1990 we find that malpractice reforms that directly reduce provider liability pressure lead to reductions of 5 to 9 percent in medical expenditures without substantial effects on mortality or medical complications we conclude that liability reforms can reduce defensive medical practices

robust dynamic estimation managing marketing resources over time requires dynamic model estimation which necessitates specifying some parametric or nonparametric probability distribution when the data generating process differs from the assumed distribution the resulting model is misspecified to hedge against such a misspecification risk the extant theory recommends using the sandwich estimator this approach however only corrects the variance of estimated parameters but not their values consequently the sandwich estimator does not affect any managerial outcomes such as marketing budgeting and allocation decisions to overcome this drawback we present the minimax framework that does not necessitate distributional assumptions to estimate dynamic models applying minimax control theory we derive an optimal robust filter illustrate its application to a unique advertising data set from the canadian blood services and contribute several novel findings we discover the compensatory effect advertising effectiveness increas

learning by doing and the introduction of new goods a dynamic general equilibrium model is developed in which goods are valued according to the characteristics they contain the set of goods produced in any period is endogenously determined and learning by doing is the force behind sustained growth it is shown that the set of produced goods changes in a systematic way over time with goods of higher quality entering each period and those of lower quality dropping out the model is then used to study the effect of introducing a traditional sector in which there is no learning

evaluation of salesforce size and productivity through efficient frontier benchmarking the efficient operation of a salesforce is a critical element in the profitability of many firms three factors play key roles the salesforce s size its allocation and its productivity this gives rise to the following questions can salesforce performance be improved by 1 hiring more salespeople 2 allocating them more effectively to the various sales districts and or 3 improving salesperson productivity through better calling patterns in terms of consumers and product line items the practice of most firms and the methodology used in most of the academic literature to address salesforce design and productivity questions is a bottom up approach this approach starts with assessments by each salesperson of the sales and effort corresponding to each customer and prospect in their territory these assessments are then aggregated to the territory district and national levels this paper takes an alternative top down approach it is based on an estimated relationship between district level sales and salesforce size effort and other variables this more macro level decision tool can be used by management in parallel to and as an objective check of the more conventional and more subjective bottom up approach we develop an efficient frontier methodology which allows us to estimate how total district sales respond to salesforce size district potential and competitive activity in the firm s best performing districts the methodology utilized is based on data envelopment analysis dea and yields a benchmark measure of each district s efficient frontier sales sales assuming the district s salesforce allocates its effort as done in the best performing districts based on the estimated response function we discuss the three potential sources of increased profitability closing the inefficiency gap of each of the lower performing districts optimally reallocating the current salesforce to the various districts and changing the current size of the salesforce to its optimal level the inefficiency gap issue is addressed through comparison of the parameter estimates for the best districts obtained through our methodology with those of an average district sales response function obtained using regression analysis this comparison points to an important methodological finding the use of multiple estimation results may lead to an improved understanding of the phenomenon being studied in our case the identification of the likely causes of district productivity inefficiencies the latter two sources of increased profitability salesforce reallocation and changes in the current salesforce size are addressed analytically given the district level efficient frontier sales response function the proposed top down procedure using the efficient frontier methodology and the insights it provides are examined by evaluating the operations of two different salesforces one selling manufacturing equipment and the other business equipment in both cases regression based analysis would have resulted in a declaration that the status quo was close to optimal while the frontier based analysis pointed out that strong gains were possible in certain districts in particular for both firms the greatest increases in profit are obtained through improved salesforce efficiency in the lower performing districts not through salesforce size or district allocation adjustments at the more micro level a comparison of the frontier and regression parameters made it possible to identify which specific changes in the daily operations of the salesforces would allow the realization of these potential productivity gains in our two cases this could be obtained through more emphasis on pursuing prospective accounts

pricing and patents of hiv aids drugs in developing countries this article provides empirical evidence on the impact of patents on drug prices across developing countries it uses sales data on human immunodeficiency virus hiv acquired immuno deficiency syndrome aids drugs in a sample of 34 low and middle income countries between 1995 and mid 2000 the main findings are that patents do shift drug prices up drug prices are correlated to per capita income levels and drug firms follow a skimming strategy when pricing new hiv aids drugs that is there is across country and intertemporal price discrimination in the global drug markets

two sided markets with pecuniary and participation externalities the existing literature on two sided markets addresses participation externalities but so far it has neglected pecuniary externalities between competing platforms in this paper we build a model that incorporates both externalities in our setup differentiated platforms compete in advertising and offer consumers a service free of charge such as a tv program that is financed through advertising we show that advertising can exhibit the properties of a strategic substitute or complement surprisingly there exist cases in which platforms benefit from market entry moreover we show that from a welfare point of view perfect competition is not always desirable

persuasion or information the economics of prescription drug advertising the economic and welfare effects of advertising have been extensively studied over the last half century however these efforts have not led to a consensus either as to the effects or the value of advertising economists continue to reach polar conclusions that appear to be derived mainly from preconceptions of the social desirability of advertising on the one hand is research that emphasizes promotion s ability to create artificial product differentiation and thereby produce informational confusion 1 this line of research stresses the empirical association of extensive advertising with high concentration and high accounting profits evidence judged to support increased market power and entry barrier effects 2 a contrary body of research emphasizes the value of advertising in providing information and hence in promoting competition 3 the empirical findings most consistent with this view are that prices paid by consumers in selected markets are lower with advertising than without it 4

conversation information and herd behavior experimental evidence shows that an important reason why people tend to imitate others to exhibit herd behavior is that they assume that the others have information that justifies their actions the information cascade models of banerjee 1992 and bikhchandani et al 1992 are significant developments in showing some general equilibrium and welfare effects of such rational imitative behavior but these models as specified may be of limited applicability since they assert that differences across groups in herd behavior can be attributed to the random decisions of first movers differences across groups in herd behavior might be explained more often in terms of different modes of interpersonal information transmission patterns of human conversation imply great selectivity to the kinds of information transmitted within groups this abstract was borrowed from another version of this item

a simple model of pharmaceutical price dynamics abstract branded pharmaceutical firms use price and promotional strategy to manage public knowledge about their drugs we propose a dynamic theory of pharmaceutical pricing and conduct an exploratory empirical analysis inspired by the theory our theory predicts a pattern of increasing prices and decreasing promotional activities over a drug s life cycle prices are kept low and advertising levels high early in the life cycle in order to build public knowledge about the drug as knowledge grows prices rise and advertising falls if the management of this stock is important enough this tendency of prices to rise can overwhelm the price decreasing effect of entry by generic competitors late in the drug life cycle we argue that our theory of price dynamics explains empirical regularities in this industry

technology adoption learning by doing and economic growth abstract we develop a model in which firms choose which technologies to adopt as well as the timing of such adoptions in between adoptions a firm accumulates expertise in its technology which allows it to operate the technology more efficiently thus there is firm specific learning by doing for certain parameterizations of the model and appropriate initial distributions of technologies and expertise equilibria are characterized by positive and constant growth of per capita output and positive but nonconstant growth of each firm s output we find firms adoption decisions and output growth depend upon the efficiency of capital markets journal of economic literature classification numbers o41 o33

hedonic price indexes for spreadsheets and an empirical test for network externalities in this article i first estimate hedonic price equations for computer spreadsheet programs and then use the analysis to empirically test whether network externalities exist in this industry the study shows that consumers are willing to pay a significant premium for spreadsheets that are compatible with the lotus platform and for spreadsheets that offer links to external databases and a similar premium for spreadsheets that offer local area network externalities finally the quality adjusted real price of computer spreadsheets declined by approximately 15 per year from 1986 to 1991

patient or physician oriented marketing what drives primary demand for prescription drugs abstract the authors analyze primary demand effects of marketing efforts directed at the physician detailing and professional journal advertising versus marketing efforts directed at the patient direct to consumer advertising the analysis covers 86 categories or approximately 85 of the u s pharmaceutical market during the 2001 2005 period primary demand effects are rather small in contrast with the estimated sales effects for individual brands by using a new brand level method to estimate primary demand effects with aggregate data the authors show that the small effects are due to intense competitive interactions during the observation period but not necessarily to low primary demand responsiveness in contrast with previous studies the authors also find that detailing is more effective in driving primary demand than direct to consumer advertising a category sales model cannot provide such insights in addition a category sales model likely produces biased predictions about period by perio

the role of targeted communication and contagion in product adoption the two main influences leading to adoption at the individual consumer level are marketing communication and interpersonal communication although evidence of the effect of these two influences is abundant at the market level there is a paucity of research documenting the simultaneous effect of both influences at the individual consumer level thus the primary objective of this paper is to fill the gap in the literature by documenting the existence and magnitude of both influences at the individual customer level while controlling for unobserved temporal effects the pharmaceutical industry provides an appropriate context to study this problem it has been conjectured that adoption and usage patterns of a new drug by physicians contagion acts as a consumption externality as it allows a given physician to learn about the efficacy and use of the drug in addition pharmaceutical companies target individual physicians via marketing activities such as detailing sampling and direct to consumer adverti

a model of the evolution of duopoly does the asymmetry between firms tend to increase or decrease this paper is an attempt to identify some of the factors that affect the evolution of market structure in a model of dynamic competition between two firms the stochastic evolution of the state of competition depends on the respective effort rates of the firms the question is whether the current leader works harder than the laggard does the gap between firms tend to increase or decrease we show that several effects are at work the state tends to evolve in the direction where joint payoffs are greater since joint payoffs are related to joint product market profits less joint effort costs there are two classes of effect the joint profit effect and various joint cost effects the latter result in part from the pattern of profits and in part from endpoint effects that give relief from efforts asymptotic expansions illuminate these influences moreover we show by numerical simulation that there is another kind of joint cost effect the pattern of joint effort costs can influence the pattern of evolution of market structure and the evolution of the pattern of market structure can influence the pattern of efforts in a mutually self reinforcing manner in particular there may be equilibria in which this last effect means that the laggard works harder than the leader even though all the other effects work in favour of the leader

high and declining prices signal product quality high and declining prices signal a high quality product high prices are the efficient means of signaling because the consequent loss of sales volume is most damaging for lower cost lower quality products as time passes and the number of informed consumers increases the signaling distortion lessens resulting in a declining price profile the prediction of high and declining prices is robust across a variety of dynamic models and is consistent with recent empirical findings copyright 1991 by american economic association

information marketing and pricing in the u s antiulcer drug market introduced into the united states in 1977 tagamet was the pioneer product in the class of antiulcer drugs known as h2antagonists by promoting ulcer healing through inhibiting acid secretion tagamet was able to heal ulcers and treat pre ulcer conditions pharmacologically on an outpatient basis thereby substituting for more costly hospital admissions and surgeries in 1983 another h2 antagonist called zantac entered and by early 1987 u s zantac sales surpassed those of the pioneering tagamet today there are four h2 antagonists sold in the united states tagamet zantac pepcid and axid zantac is now the world s largest selling prescription drug having estimated worldwide sales in 1994 of about 4 billion each of the four h2 antagonists is among the top 100 in world drug sales although tagamet lost u s patent protection on may 17 1994 in this paper we examine empirically the role of information in facilitating and explaining growth of the overall antiulcer drug market as well as in shaping the changing market shares of the four patented products the dissemination of information is due largely to the use of marketing channels such as visits by manufacturers representatives to physicians called detailing advertising in medical journals and most recently by direct to consumer advertising we examine these and also explore pricing policies product differentiation and orderof entry effects

generic drug industry dynamics both the economics literature and the business press suggest that a typical pattern for a new industry or what jovanovic and macdonald 1994 call an invention i s to have an initial phase in which a small number of firms each earn significant profits followed by a phase in which rapid entry of new firms leads to increased competition and dissipation of some of those profits often accompanied by a shakeout whereby only a few large firms remain especially if subsequent innovations increase the optimal scale although this pattern seems to characterize many industries the length of time during which early movers retain their profits how prices adjust during the entry process and the

deconstructing the pioneer s advantage examining vintage effects and consumer valuations of quality and variety several studies have demonstrated an order of entry effect on market share suggesting that pioneers outperform later entrants however other research has pointed out the limitations of these studies and found evidence that many pioneers fail or have low market share given this background the purpose of this research is to understand the conditions under which pioneers are more likely and also less likely to have an advantage we propose a game theoretic model that includes important sources of pioneer advantages as well as disadvantages specifically we incorporate a pioneer advantage due to preemption in markets with heterogeneous tastes in addition we incorporate a potential pioneer disadvantage due to technology vintage effects where later entrants utilizing improved technology can have lower costs and higher quality the model allows us to evaluate the extent of vintage effects necessary to overcome a pioneer s advantage key relationships are found between the magnitude of the pioneer advantage or disadvantage and consumer valuations of product attributes e g variety and quality we empirically validate the model with vintage effect data in 36 product categories and measures of consumer valuations of product variety and quality for 12 of these 36 categories the results show that pioneers do better in product categories wherevariety is more important and worse in categories where productquality is more important pioneers in categories with high vintage effects are shown to have lower market shares and higher failure rates similar results appear when analyzing persistence of market leadership over time further validating our model s major implications we also present two case studies that illustrate key elements of the model

learning and payoff externalities in an investment game abstract this paper examines the interplay of informational and payoff externalities in a two player irreversible investment game each player learns about the quality of his project by observing a private signal and the action of his opponent i characterize the unique symmetric equilibrium in a timing game that features a second mover advantage allowing for arbitrary correlation in project qualities despite private learning the game reduces to a stochastic war of attrition in contrast to the case of purely informational externalities all investments happen at the same real time instant irrespective of the sign of the correlation and beliefs never get trapped in a no learning region provided that the second mover advantage is sufficiently high

consumption externalities and diffusion in pharmaceutical markets antiulcer drugs we examine the role of consumption externalities in the demand for pharmaceuticals at both the brand level and over a therapeutic class of drugs externalities emerge when use of a drug by others affects its value and or conveys information about efficacy and safety to patients and physicians this can affect the rate of market diffusion for a new entrant and can lead to dominance of one drug despite the availability of close substitutes we use data for h2 antagonist antiulcer drugs to estimate a dynamic demand model and quantify these effects the model has three components an hedonic price equation that measures how the aggregate usage of a drug as well as conventional attributes affect brand valuation equations relating equilibrium market shares to quality adjusted prices and marketing levels and diffusion equations describing the dynamic adjustment process we find that consumption externalities influence both valuations and rates of diffusion and that they operate at the brand and not the therapeutic class level

learning about new products an empirical study of physicians behavior i introduction an important aspect of economic innovation is the development of new products thus firms often devote large amounts of resources to research and development the pharmaceutical industry in particular is characterized by a high degree of product innovation and significant investments in research and development 1 critical to the adoption of a new pharmaceutical however is the willingness of physicians to prescribe it although clinical trials and advertising convey information about the quality of a new pharmaceutical considerable uncertainty remains not only about its general quality but also about its effect on individual patients 2 because physicians ultimately resolve this uncertainty by prescribing the new drug 3 to their patients namely by experimentation the adoption of a new pharmaceutical is closely related to the experimentation process by which physicians gain information in this paper we focus on the entry of a new antiulcer drug omeprazole in the italian pharmaceutical market in june of 1990 4 our data consist of monthly prescriptions of antiulcer medications by physicians in the rome metropolitan area between june 1990 and december 1992 we develop and estimate a dynamic discrete choice model of physician bayesian learning about the quality of a new drug in our model physicians have initial beliefs about the new drug s efficacy and update them every time that they prescribe the new drug and observe the treatment outcome when choosing which drug to prescribe to a particular patient a forward looking physician considers not only the expected outcome for that patient but also the opportunity to learn about the new drug s quality and use the information on future patients our parameter estimates allow us to disentangle how uncertainty about the new drug s quality intertemporal preferences and prices affect the adoption of the new drug and the corresponding health outcomes a recent literature has explored the role of learning about pharmaceuticals 5 as noted by manchanda et al 2005 in their review of this literature some important aspects of the learning mechanism are the channels through which agents learn prescription detailing marketing meetings and events their preferences toward risk risk averse or risk neutral and whether they are short sighted myopic or forward looking myopic agents maximize their current expected utility while forward looking agents evaluate their current utility as well as the expected future value of the information they might gain through the current prescription 6 the studies also differ in whether they use physician level or aggregate data a central contribution of our paper is the prediction of market demand for the new drug through a parsimonious yet behaviorally rich model using the same physician level data used here coscelli and shum 2004 model the behavior of doctors who learn in a bayesian fashion yet are myopic we in contrast model the forward looking behavior of physicians and reject the null hypothesis that physicians are myopic according to our estimates myopic behavior significantly delays the adoption of the new drug and generates large losses to patients health crawford and shum 2005 use related patient level data and model how forward looking patients learn about their curative and symptomatic matches with respect to alternative medications in their model a patient s learning about a medication is not driven by the fact that the medication is new rather it is driven by her need to learn which medication suits her best hence she learns about her match to each medication not just the new one in our model however learning is driven by the market level uncertainty associated with omeprazole as a new product 7 while it would be of interest to study both doctors and patients learning our doctor level data motivate our focus on physician learning

pharmaceutical pricing in a regulated market we compare how new pharmaceuticals are priced in the price regulated swedish market with how they are priced in the u s market as studied by lu and comanor 1998 we collect a data set consisting of all new chemical entities nces launched in sweden between 1987 and 1997 and test the same models as lu and comanor in line with their results we find that introductory prices depend on the degree of therapeutic innovation contrary to the results from the u s market swedish real prices for nces fall substantially over time for all classes of therapeutic innovation also contrary to the findings of lu and comanor we find no effect of the presence of branded substitutes on either introduction prices or price dynamics our results indicate that the price regulation discourages price competition between brandname drugs

vintage human capital growth and the diffusion of new technology we develop a model of vintage human capital in which each technology requires vintage specific skills we examine the properties of a stationary equilibrium for our economy the stationary equilibrium is characterized by an endogenous distribution of skilled workers across vintages the distribution is shown to be single peaked under general conditions there is a lag between the appearance of a technology and its peak usage a phenomenon known as diffusion an increase in the rate of exogenous technological change shifts the distribution of human capital to more recent vintages thereby increasing the diffusion rate

the price elasticity of selective demand a meta analysis of econometric models of sales the author describes a meta analysis of econometric studies that estimated the elasticity of selective sales or market share to price the literature review yielded 367 suitable price elasticities

energy consumption during cooking in the residential sector of developed nations a review abstract residential cooking is essential for the enhancement of safety and quality of a substantial number of food products but the energy requirements for cooking can be prodigious and individual household energy use varies considerably this review evaluates the current state of energy efficiency during household cooking in developed countries and identifies potential policy changes that may have an impact on reducing energy consumption the primary factors affecting energy consumption include 1 the production and transport efficiency of fuel sources electricity natural gas wood etc 2 the appliance or end use efficiency and 3 the behavior of the consumer during cooking regarding appliance efficiencies some improvements are plausible and policies should be directed towards reducing or alleviating stand by energy consumption in new products however the most promising energy conservation tactic is consumer behavior modifications since individual cooking practices can reduce expenditures by as much as 95 thus policies should be directed towards consumer education to have the most marked effect on household energy consumption although cooking is only one aspect of food production it is a universal requisite for food safety in the residential sector and implementing policies that reduce energy consumption during cooking may have an impact on global energy demands

advertising and competition in the ethical pharmaceutical industry the case of antihypertensive drugs abstract this paper uses data on the majority of name brand antihypertensive drugs marketed in the united states during 1988 93 to test the hypothesis that advertising decreases the price elasticity of demand in the pharmaceutical industry this is the first study to directly estimate the effects of drug product promotion on the price elasticity of demand in this industry we find strong evidence of an advertising effect in particular detailing efforts the salient means for product promotion in this industry systematically lower price sensitivity given the inverse relationship between elasticity of demand and price it is likely that consumers pay higher prices as a result of the advertising that occurs in this industry our findings are thus consistent with hurwitz and caves who find evidence that advertising inhibits entry into this market but in contrast to earlier research that found no anticompetitive effect

induction stoves as an option for clean cooking in rural india abstract as part of a programme on access to clean cooking alternatives in rural india induction stoves were introduced in nearly 4000 rural households in himachal pradesh one of the few highly electrified states in india analysis of primary usage information from 1000 rural households revealed that electricity majorly replaced liquid petroleum gas lpg generally used as a secondary cooking fuel but did not influence a similar shift from traditional mud stoves as the primary cooking technology likewise the shift from firewood to electricity as a primary cooking fuel was observed in only 5 of the households studied country level analysis indicates that rural households falling in lower monthly per capita expenditure mpce classes have lesser access to electricity and clean cooking options than those falling in higher mpce classes again only three states in india with high levels of rural household electrification report consumption statuses more than 82 kwh per month the estimated mean for electricity consumption by induction stoves overall the results of the study indicate that induction stoves will have limited potential in reducing the consumption of firewood and lpg if included in energy access programmes that too only in regions where high levels of electrification exist

strategic pricing of new pharmaceuticals this paper provides empirical evidence on the leading factors affecting the prices of new pharmaceuticals both at introduction and after 4 6 and 8 years most important is the extent of therapeutic advance embodied in a new product for drugs which represent important therapeutic gains launch prices can be two or three times those of existing drugs used for the same purposes while drugs that largely duplicate the actions of currently available products are typically priced at comparable levels in addition the number of branded substitutes has a substantial negative effect on launch prices which reflects the importance of competitive pressures duplicate products thereby play an important economic role in pharmaceutical markets

the effects of the market structure on the adoption of evolving technologies abstract we study the speed at which technologies are adopted depending on how the market power is shared between the firms that sell technologies and the firms that buy them our results suggest that because of a double marginalization problem adoption is fastest when either sellers or buyers hold all the market power thus competition between sides of the market may delay the adoption of technologies

characteristics of demand for pharmaceutical products an examination of four cephalosporins we model demand for four cephalosporins and compute own and cross price elasticities between branded and generic versions of the four drugs we model demand as a multistage budgeting problem and we argue that such a model is appropriate to the multistage nature of the purchase of pharmaceutical products in particular the prescribing and dispensing stages we find quite high elasticities between generic substitutes and also significant elasticities between some therapeutic substitutes

why have improved cook stove initiatives in india failed summary an estimated 2 7 billion people cook meals on biomass fueled brick stone and clay stoves scarcity of wood and negative impacts on health and environment have motivated efforts to design and distribute improved cook stoves in developing countries in india adoption is limited despite massive promotion over many decades existing research suggests that many rural women in india do not want improved stoves and those who do face obstacles to adoption we step back from the many good case studies to examine the broader story of improved cook stoves ics in india we do so by bringing together technical research of applied science and narrative critique of social science rather than assuming a priori that traditional stoves require replacement we ask why indian cook stoves been a magnet for so much attention why adoptions rates have remained low and what lessons might be learned from a broad multi disciplinary perspective our approach is critical and reflexive given our own involvement in ic efforts and puts gender at the center our big picture review shows that the indian chulha for all its problems is a remarkably successful technology which also satisfies several important household needs hence targeting this device for obsolescence has profound implications that cannot be reduced to energy consumption or environmental hazards rural women do not prioritize ics but addressing their priorities requires either capital intensive investment or challenging powerful institutions in contrast ic interventions are relatively cheap decentralized mechanical and seemingly apolitical hence their popularity in development programs our review of chulha research leads us to reject both the optimism of development planners who frame such problems as technical and the antagonistic pessimism of their critics searching for a middle ground requires stepping back from the dogma of efforts to improve biomass cook stoves

empirical marketing generalization using meta analysis a decade of work in marketing meta analysis has produced empirical generalizations concerning parameters in models of advertising price diffusion and consumer behavior results from these meta analyses should replace the now discredited zero null hypotheses of such parameters in future work probably more important than nonzero grand mean average effects is an approach called parametric adjustability which provides estimated parameter values for specific conditions reflecting markets and research technologies systematic application of the methodology can also help guide research along productive routes and away from repetition of work which has little potential to add new knowledge

an econometric study of recruitment marketing in the u s navy since the abolishment of the mandatory draft the u s navy along with the other services has engaged in aggressive marketing strategies in order to attract a sufficient number of qualified individuals to volunteer enlistment the purpose of this study is to investigate the effectiveness of these efforts primarily advertising and personal selling within the general framework of the recruiting environment the study uses insights into the recruiting process provided by the navy recruiting command along with principles of economics and marketing to develop an econometric model of recruiting performance the parameters of the model are then estimated on a monthly data base for the 43 navy recruiting districts from january 1976 to december 1978 the objective of the model is descriptive i e it quantifies the effects of various environmental and marketing variables on three measures of recruiting performance nationally generated leads contracts for the delayed entry program and direct shipment contr

new empirical generalizations on the determinants of price elasticity abstract the importance of pricing decisions for firms has fueled an extensive stream of research on price elasticities in an influential meta analytical study tellis 1988 summarized price elasticity research findings until 1986 however empirical generalizations on price elasticity require modifications because of 1 changes in market characteristics i e characteristics of brands product categories and economic conditions and 2 changes in the research methodology used to assess price elasticities therefore the authors present a meta analysis of price elasticity with new empirical generalizations on its determinants across a set of 1851 price elasticities based on 81 studies the average price elasticity is 2 62 a salient finding is that over the past four decades sales elasticities have significantly increased in magnitude whereas share and choice elasticities have remained fairly constant the authors find that accommodating price endogeneity has a strong magnitude increasing impa

learning from the behavior of others conformity fads and informational cascades learning by observing the past decisions of others can help explain some otherwise puzzling phenomena about human behavior for example why do people tend to converge on similar behavior why is mass behavior prone to error and fads the authors argue that the theory of observational learning and particularly of informational cascades has much to offer economics business strategy political science and the study of criminal behavior

a meta analysis of marketing communication carryover effects abstractto optimally set marketing communication marcom budgets reliable estimates of short term elasticities and carryover effects are required empirical generalizations from meta analyses of prior field studies can help guide these decisions however the last such meta analysis of marcom carryover effects was performed on koyck model based estimates collected before 1984 and was confined to mass media advertising the authors update and extend extant empirical generalizations via two meta analyses of carryover estimates compiled from studies encompassing personal selling targeted advertising and mass media advertising using diverse model forms until 2015 the first is focused on and utilizes 918 estimates of the carryover proportion of the total effect termed long term share of the total effect and the second focuses on 863 derivable estimates of 90 implied duration intervals the authors find the mean long term shares of the total effect for personal selling 687 and targeted advertisin

a bibliometric review energy consumption and greenhouse gas emissions in the residential sector residential sector has been one key sector for reducing its greenhouse gas emissions due to its significant contribution to global warming researchers in different countries have studied household energy consumption patterns and greenhouse gas emissions in order to promote low carbon lifestyles however few review papers have been published in this regard leading to a lack of systematic understanding on the related research achievements hence by using a bibliometric approach this paper aims to review the existing literature and examine the evolution of such a field so that the research trends can be uncovered including popular research methods citation analysis is performed to assess the influence of most productive journals countries territories and authors network analysis is also conducted to evaluate the relationship among different countries territories authors and keywords research outcomes of this paper present a comprehensive research picture on residential energy consumption and corresponding greenhouse gas emissions ree related papers published from 1997 to 2016 the most productive journals countries territories authors are also analyzed based on citation analysis and network analysis in addition results also revealed that behavioral analysis input output analysis life cycle assessment and cost benefit analysis are the most commonly used methods in this field results obtained from this study can provide valuable information for researchers interested in the ree related field

costa contribution optimizing sales territory alignment the alignment of sales territories has a considerable impact on profit and represents a major problem in salesforce management practitioners usually apply the balancing approach this approach balances territories as well as possible with respect to one or more attributes such as potential or workload unfortunately this approach does not necessarily guarantee maximizing profit contribution thus it does not provide an evaluation of the profit implications of an alignment proposal in comparison with the existing one in consequence several authors proposed nonlinear integer optimization models in the 1970s these models attempted to maximize profit directly by considering the problems of allocating selling time calling plus travel time across accounts as well as of assigning accounts to territories simultaneously however these models turned out to be too complex to be solvable therefore the authors have either approximated the problem or proposed the application of heuristic solution procedures on the basis of the suboptimal principle of equating marginal profit of selling time across territories to overcome these limitations we propose a new approach costa an acronym for contribution optimizing sales territory alignment in contrast to previously suggested profit maximizing approaches costa operates with sales response functions of any given concave form at thelevel of sales coverage units scus that cover a group of geographically demarcated individual accounts thus costa works with sales response functions at a more aggregated level that requires less data than other profit maximization approaches costa models sales as a function of selling time which includes calling time as well as travel time assuming a constant ratio of travel to calling time in addition the formulation of the model shows that an optimal solution requires only equal marginal profits of selling time across sales coverage units per territory but not across scus of different territories basically costa consists of an allocation model and an assignment model both of which are considered simultaneously the allocation model optimally allocates the available selling time of a salesperson across the scus of his or her territory whereas the assignment model assigns the scus to territories thus costa predicts the corresponding profit contribution of every possible alignment solution which enables one to perform what if analyses the applicability of the model is supported by the development of a powerful heuristic solution procedure a simulation study showed that costa provided solutions that are on average as close as 0 195 to an upper bound on the optimal solution the proposed heuristic solution procedure enables one to solve large territory alignment problems because the computing time increases only quadratically with the number of scus and proportionally to the square root of the number of salespersons in principle we also show how costa might be expanded to solve the salesforce sizing as well as the salespersons location problem the usefulness of costa is illustrated by an application the results of this application indicated substantial profit improvements and also outlined the weaknesses of almost balanced territories it is quite apparent that balancing is only possible at the expense of profit improvements and also does not lead to equal income opportunities for the salespersons this aspect should be dealt with separately from territory considerations by using territory specific quotas and linking variable payment to the achievement of these quotas furthermore the superiority of costa turned out to be stable in a simulation study on the effect of misspecified sales response functions costa is of interest to researchers as well as practitioners in the salesforce area it aims to revive the stream of research in the 1970s that already proposed sales territory alignment models aimed at maximizing profit such profit maximizing models are theoretically more appealing than approaches that strive to balance one or several attributes such as potential or workload costa s main advantage over previous profit maximizing approaches is that it is less complex consequently costa demands less data so that even large problems can be solved close to optimality within reasonable computing times

on the persistence of leadership or leapfrogging in international trade when two countries starting from different quality levels reflecting different conditions on domestic market demands open to trade two possible equilibria arise in the first the quality leader maintains its position in the second leapfrogging occurs however the latter is possible only if the initial quality gap is not too wide further when the risk dominance criterion is used only the former equilibrium is selected these results suggest that initial conditions such as domestic market size or home demand preferences are important factors in determining relative competitiveness of firms in international markets

identifying industry margins with price constraints structural estimation on pharmaceuticals we develop a structural model to investigate the effects of pharmaceutical price regulation on demand and on manufacturers price setting behavior in france we estimate price cost margins in a regulated market with price constraints and infer whether these constraints are binding exploiting cost restrictions across drugs which come from observing the same drugs in potentially price constrained markets france and in markets where prices are unregulated us and germany our counterfactual simulations suggest that price constraints generated modest savings for anti ulcer drugs in 2003 2013 2 percent of total expenses relative to a free pricing scenario and shifted consumption from generic to branded drugs

impact of direct to consumer advertising on pharmaceutical prices and demand author affiliation dhaval dave ddave bentley eduhenry saffer hsaffer gc cuny edu acknowledgment this research was supported by a grant from the agency for healthcare research and quality to the national bureau of economic research the authors are grateful to gregory colman robert feinberg michael grossman dominic hodgkin rick smith and two anonymous reviewers for valuable comments li ma and zhen ma provided excellent research assistance 1 introductionbetween 1995 and 2007 expenditures on prescription drugs increased by 274 raising the drug related share of total health care spending from 6 to over 10 and making it one of the fastest growing components of health care costs 1 the growth in prescription drug expenditures has coincided with the growth in pharmaceutical promotion which increased from 11 4 billion in 1996 to 29 9 billion in 2005 donohue cevasco and rosenthal 2007 promotion of prescription drugs is generally limited to patented drugs and includes direct to consumer advertising dtca on broadcast and print media as well as direct to physician promotion dtpp through visits by company representatives to physician offices known as detailing free samples provided to physicians and advertising in professional journals the largest increase in promotion resulted from the expansion of dtca into broadcast media this expansion was precipitated by the food and drug administration s fda s clarification of the rules governing broadcast advertising in 1997 and 1999 making it feasible for companies to promote via television and radio advertisements dtca spending increased from 150 million in 1993 to 4 24 billion in 2005 these new regulations which allow broadcast dtca remain a controversial policy currently only the united states and new zealand permit such advertising dtca is facing increased scrutiny from congress and consumer groups congressional leaders have contended that dtca raises prescription drug costs and have requested that the policy be revisited 2 some groups maintain that the recent increases in dtca are responsible for the increases in expenditures on prescription drugs the national institute for health care management november 2001 claimed that increases in sales for the 50 most heavily advertised drugs caused 47 8 of the increase in expenditures on prescription drugs growth in prescription drug spending is broadly driven by increases in utilization and price and shifts in the composition of drugs being used all of which may be impacted by dtca dtca can raise the demand for existing drugs and can also affect their price elasticity the increase in demand can be beneficial if it improves adherence donohue et al 2004 bradford et al 2006 or makes individuals aware of the existence of drug therapies for their health conditions expenditures have also increased in part as a result of the fact that newer drugs generally cost more than older drugs and dtca might induce substitution to these newer more expensive drugs which also tend to be more heavily advertised this may be health promoting since newer drugs have been shown to be more effective in improving health than are older drugs lichtenberg and virabhak 2007 treatment through prescription drugs can also be more cost effective than alternative and more intensive therapies inducing some substitution among these forms of care 3 a key component of this question of the extent to which the growth in dtca has contributed to rising prescription drug costs relates to how dtca affects drug prices to the best of our knowledge no prior studies have investigated the impact of dtca on prescription drug prices on a broad scale this study adds to the literature with an empirical investigation of the role of prescription drug promotion in affecting the price of prescription drugs prior studies which have explored the effects of consumer advertising on sales have also generally utilized older data collected prior to 2000 have not differentiated between broadcast and non broadcast dtca and have arrived at mixed conclusions regarding the impact of total dtca on own sales

the economics of networks a survey of the empirical literature network effects the increase in value of consuming a product if many other consumers use the same product are a feature of many markets and in particular of many high technology products this paper surveys the burgeoning empirical literature that has developed especially during the last years after theoretical work dominated the earlier years of research in this area newer research has combined theoretical models with empirical studies and applied work with direct implications for public policy marketing and company strategies furthermore insights from the study of social networks have been applied to analyse how consumers interact with each other the paper argues that a closer analysis of the network structure of consumer interaction promises fruitful future research avenues and advances in our understanding of how network effects operate copyright 2009 blackwell publishing ltd

ask your doctor direct to consumer advertising of pharmaceuticals we measure the impact of direct to consumer television advertising dtca by drug manufacturers our identification strategy exploits shocks to local advertising markets generated by the political advertising cycle and a regulatory intervention affecting a single product we find evidence of significant business stealing effects among branded advertised drugs in addition we show positive spillovers from drug advertisements to non advertised competitors in the same class we decompose the effect and show it is primarily due to new customers finally we provide evidence that dtca is cost effective from a societal standpoint in our setting

direct to consumer advertising and consumer welfare the welfare implications of direct to consumer advertising dtca have garnered considerable attention and are complicated since the consumer delegates some decision making authority to the physician who is exposed to advertising as well in this paper i develop and estimate a structural model that explains the demand side behavior in the market for prescription drugs i then use the estimated parameters of the model to compute the impact on consumer welfare that results from changes in demand for cholesterol reducing drugs due to increased expenditure in dtca the results of the policy analysis indicate increased levels of consumer welfare due to presence of dtca in comparison to the absence of dtca the results also support the argument that dtca helps bring under diagnosed patients to the physicians offices furthermore the results of the estimation support the informative role of dtca on the decision to seek care and both informative and persuasive roles of physician advertising on the choice of the drug

the cultural relativity of organizational practices and theories this paper summarizes the author s recently published findings about differences in people s work related values among 50 countries in view of these differences ethnocen tric management theories those based on the value system of one particular country have become untenable this concept is illustrated for the fields of leadership organization and motivation a key issue for organization science is the influence of national cultures on introduction management twenty or even 10 years ago the existence of a relationship be management and tween management and national cultures was far from obvious to many and it national cultures may not be obvious to everyone even now in the 1950s and 60s the dominant be lief at least in europe and the u s was that management was something univer sal there were principles of sound management which existed regardless of na tional environments if national or local practice deviated from these principles it was time to change local practice in the future the universality of sound manage ment practices would lead to societies becoming more and more alike this ap plied even to the poor countries of the third world which would become rich as well and would be managed just like the rich countries also the differences be tween management in the first and second world capitalist and socialist would disappear in fact under the surface they were thought to be a lot smaller than was officially recognized this way of thinking which dominated the 1950s and 60s is known as the convergence hypothesis during the 1970s the belief in the unavoidable convergence of management prac tices waned it was too obviously in conflict with the reality we saw around us at the same time supranational organizations like the european common market which were founded very much on the convergence belief had to recognize the stubbornness of national differences even within existing nations regional dif ferences became more rather than less accentuated the welsh the flemish the basques the bangladeshi the quebecois defended their own identity and this was difficult to reconcile with a management philosophy of convergence it slowly became clear that national and even regional cultures do matter for management the national and regional differences are not disappearing they are here to stay in fact these differences may become one of the most crucial problems for man agement in particular for the management of multinational multicultural orga nizations whether public or private

does regulation drive out competition in pharmaceutical markets abstract most countries regulate pharmaceutical prices either directly or indirectly on the assumption that competition is at best weak in this industry this paper tests the hypothesis that regulation of manufacturer prices and retail pharmacy margins undermines price competition we use data from seven countries for 1992 to examine price competition between generic competitors different manufacturers of the same compound and therapeutic substitutes similar compounds under different regulatory regimes we find that price competition between generic competitors is significant in unregulated or less regulated markets united states united kingdom canada and germany but that regulation undermines generic competition in strict regulatory systems france italy and japan regulation of retail pharmacy further constrains competition in france germany and italy regulation thus undermines the potential for significant savings on off patent drugs which account for a large and growing share of drug

personal selling elasticities a meta analysis abstract this article presents a meta analysis of prior econometric estimates of personal selling elasticity that is the ratio of the percentage change in an objective ratio scaled measure of sales output e g dollar or unit purchases to the corresponding percentage change in an objective ratio scaled measure of personal selling input e g dollar expenditures the authors conduct a meta analysis of 506 personal selling elasticity estimates drawn from analyses of 88 empirical data sets across 75 previous articles they find a mean estimate of current period personal selling elasticity of 34 they also find that elasticity estimates are higher for early life cycle stage offerings higher from studies set in europe than from those set in the united states and smaller in more recent years in addition elasticity estimates are affected significantly by analysts use of relative rather than absolute sales output measures by cross sectional rather than panel data by omission of promotions by lagge

learning by doing and the choice of technology the role of patience if agents learn by doing and are myopic less advanced firms might adopt new technologies while more advanced firms would stick with the old technology this kind of overtaking can also occur if agents are forward looking and have high discount rates however overtaking never occurs if agents are sufficiently patient a finite discount rate increases the set of states at which agents adopt new technologies so more patient agents tend to upgrade their technology more frequently journal of economic literature classification numbers d92 o14 o33

practice prize winner dynamic marketing budget allocation across countries products and marketing activities previous research on marketing budget decisions has shown that profit improvement from better allocation across products or regions is much higher than from improving the overall budget however despite its high managerial relevance contributions by marketing scholars are rare in this paper we introduce an innovative and feasible solution to the dynamic marketing budget allocation problem for multiproduct multicountry firms specifically our decision support model allows determining near optimal marketing budgets at the country product marketing activity level in an excel supported environment each year the model accounts for marketing dynamics and a product s growth potential as well as for trade offs with respect to marketing effectiveness and profit contribution the model has been successfully implemented at bayer one the world s largest pharmaceutical and chemical firms the profit improvement potential is more than 50 and worth nearly 500 million in incremental discounted cash flows

the influence of managed care on generic prescribing rates an analysis of hmo physicians retail expenditures on prescription drugs continue to grow annually by double digits while the share of prescriptions dispensed as generics remains relatively constant efforts to curtail rising drug expenditures have been exhibited by managed care organizations mcos yet drug expenditures continue to rise using the national ambulatory medical care survey namcs for 1997 2000 this study examines how managed care specifically health maintenance organizations hmos influence the physician s decision to prescribe the generic version of a multi source drug the findings show that hmo physicians are not significantly more likely to prescribe generic drugs than non hmo physicians among hmo physicians different cost reduction tools effect generic prescribing behaviour in different ways with the size of the effect depending on the patient and physician relationship with the hmo

adoption curves and social interactions this paper considers the observational implications of social influences on adoption decisions for an environment of perfect foresight adopters we argue that social influences can produce two observable effects 1 discontinuities in unconditional adoption curves and 2 pattern reversals in conditional adoption curves in which earlier adoption is found for one group of actors versus another when fundamentals suggest the reverse ordering should occur in turn the presence of either of these features can under weak assumptions be interpreted as evidence of social influences as such these properties are robust implications of social effects jel c40 d01 o33

competing technologies and market dominance standard battles in the local area networking industry the rise of fast ethernet as the dominant standard for high speed connection in the local area networking industry is chosen to study the interaction between increasing returns to adoption and technical change in innovation diffusion contrary to most of the empirical papers on diffusion with increasing returns which study competition between an entrenched technology and a new competitor the focus is on the case in which several and different versions of a new technology are competing at the same time for market dominance within this context this article studies under which conditions an early technology may fail to capitalise on its initial time advantage and a new version without a clear early lead may become dominant in particular we will consider a case in which the initial time advantage is made ineffective by consistently adverse technological expectations then we analyse how the arrival on the market of different categories of buyers sensitive to specific applications further contribute to weaken the early leader and strengthen a competing version this is more likely to occur when buyers are highly familiar with the characteristics of that specific version copyright 2008 oxford university press

strategic pricing and detailing behavior in international markets we study three determinants of the levels of price and detailing effort across geographic markets the within market response to each variable the nature of interfirm strategic interactions both within that market and across markets we empirically examine the interactions of prozac zoloft and paxil across the united states the united kingdom germany france and italy our results indicate that all three factors driving marketing mix interactions are at play in this product category the u s market is less price sensitive than the european markets detailing elasticities are comparable across the united states germany and italy while the united kingdom and france show greater elasticity for the u s market we find that almost all deviations from nash pricing and detailing levels are due to within market interactions in the u k market deviations from nash prices come about due mostly to across market interactions both with the united states as well as the rest of europe whereas deviations from nash detailing levels are mainly due to across market interactions with the united states for italy we observe that both within and across market interactions affect price and detailing levels overall the pattern of interactions makes observed prices more similar across countries than prices implied by the estimated elasticities this underscores the importance of considering within and across market interactions in developing multimarket strategy

regulation and competition in the taiwanese pharmaceutical market under national health insurance this article investigates the determinants of the prices of pharmaceuticals and their impact on the demand for prescription drugs in the context of taiwan s pharmaceutical market where medical providers earn profit directly from prescribing and dispensing drugs based on product level data we find evidence that the profit seeking behavior of the medical providers in the prescription drug market transfers the force of competition from the unregulated wholesale market to the regulated retail market and hence market competition still plays an important role in the determination of the regulated price we also find that the profit seeking behavior plays a similar role to advertising in that it increases the brand loyalty and hence lowers price elasticity an important implication of our study is that the institutional features in the pharmaceutical market matter in shaping the nature of pharmaceutical competition and the responsiveness of pharmaceutical consumption with respect to changes in price

empirical generalizations and marketing science a personal view marketing has matured to the point where it seems desirable to take stock of where we are what we have learned and fruitful directions for extending the knowledge base that has developed science is a process involving the interaction between empirical generalizations and theory an empirical generalization is a pattern or regularity that repeats over different circumstances and that can be described simply by mathematical graphic or symbolic methods one of the purposes of the empirical generalizations conference held at wharton on february 16 18 1994 was to develop a list of examples of such empirical generalizations in marketing empirical generalization can precede a theory to explain it or it can be predicted by a theory science is the process of interaction between theory and data that leads to higher level theories examples are provided here of empirical generalizations in marketing and their theoretical counterparts one example is provided of a higher level theory

models of technology diffusion abstract the literature on new technology diffusion is vast and it spills over many conventional disciplinary boundaries this paper surveys the literature by focusing on alternative explanations of the dominant stylized fact that the usage of new technologies over time typically follows an s curve the most commonly found model which is used to account for this model is the so called epidemic model which builds on the premise that what limits the speed of usage is the lack of information available about the new technology how to use it and what it does the leading alternate model is often called the probit model which follows from the premise that different firms with different goals and abilities are likely to want to adopt the new technology at different times in this model diffusion occurs as firms of different types gradually adopt it there are actually many ways to generate an s curve and the third class of models which we examine are models of density dependence popularized by population ecologists in these models the twin forces of legitimation and competition help to establish new technologies and then ultimately limit their take up finally we look at models in which the initial choice between different variants of the new technology affect the subsequent diffusion speed of the chosen technology such models often rely on information cascades which drive herd like adoption behaviour when a particular variant is finally selected

innovation and recurring shifts in industrial leadership three phases of change and persistence in the camera industry abstract this study examines factors underlying three phases of change or persistence in industrial leadership in the sector of interchangeable lens cameras over the past century during this period there were two major phases of leadership change both associated with the emergence of innovations involving major discontinuities in the industry s core technologies first japan won market leadership from germany in the mid 1960s after commercializing the single lens reflex slr camera that replaced the previously dominant german rangefinder camera second in the late 2000s japanese latecomer firms and a korean firm developed mirrorless cameras which allowed them to capture the majority of market share from the incumbent japanese leaders we also examine the long period about 60 years between these two phases of change during which leading japanese firms were able to sustain their market leadership despite the digital revolution from the 1980s to 1990s this paper explores the factors influencing these contrasting experiences of change and persistence in industry leadership the analysis integrates several aspects of sectoral innovation systems i e windows of opportunity associated with technology demand and institution as well as the strategies of incumbents and latecomer firms the conclusions highlight the complex and diverse combinations and importance of the factors that help explain the patterns of shifts in leadership

searching and learning by trial and error i study a dynamic model of trial and error search in which agents do not have complete knowledge of how choices are mapped into outcomes agents learn about the mapping by observing the choices of earlier agents and the outcomes that are realized the key novelty is that the mapping is represented as the realized path of a brownian motion i characterize for this environment the optimal behavior each period as well as the trajectory of experimentation and learning through time applied to new product development the model shares features of the data with the well known product life cycle jel d81 d83 d92 l26

pharmaceuticals in u s health care determinants of quantity and price the u s pharmaceutical industry has again become the focus of considerable controversy in understanding the economics underlying this industry distinctions between short medium and long run costs are critical as is that between economic and accounting costs consumers heterogeneous valuations create strong incentives for non uniform pricing and targeted marketing the conflict between static efficiency price new drugs low near short run marginal cost and dynamic efficiency price new drugs high maintain incentives for innovation is deep and enduring this trade off is becoming more severe as the relative costs of bringing new drugs to market have increased sharply

information and diffusion of new prescription drugs this article examines the role of different product information flows on the diffusion of new pharmaceuticals given the innovative nature of pharmaceutical drugs and their impact on health care expenditure there is a surprisingly small literature devoted to this topic some information flow mechanisms have been examined individually in the literature but very few have captured the simultaneous impact of these mechanisms on up take and diffusion this article uses the up take of statins as an example diffusion of this therapeutical group is expressed as a function of four specific informational channels self experience consumption externalities scientific evidence and marketing in addition to this the influence of economic factors is tested to examine whether they have any role in drug diffusion prescription data from over 130 general practitioners gp practices in the uk during 1991 2004 are used to test the econometric specification applying dynamic panel data methods results suggest individual self experience and clinical evidence are major factors promoting diffusion while there is an inverse relationship with gp practice size and diffusion having controlled for these factors financial incentives and marketing appear to play little role

pharmaceutical patents incentives for research and development or marketing we analyze how a patent holding pharmaceutical firm may strategically use advertising of existing drugs to affect research and development r d investments in new differentiated drugs and thereby affect the probability distribution of future market structures in the industry within a fairly general model framework we derive exact conditions for advertising and r d being substitute strategies for the incumbent firm and show that it may overinvest in advertising to reduce the incentive for an entrant to invest in r d thereby reducing the probability of a new product on the market in a more specific setting of informative advertising we show that such overinvestment incentives are always present and that more generous patent protection implies that a larger share of the patent rent is spent on marketing relative to r d

vested interests in a positive theory of stagnation and growth we study a positive theory of stagnation and growth aimed at understanding the large variations in growth outcomes across actual economies the theory points to the fundamental role played by vested interests in determining policies which are key to the growth process some agents seek to prevent the adoption of new technologies we develop a model of technology adoption and show how technological innovation may sow the seeds of its own destruction in particular we find that the equilibrium is characterized by a long cycle of stagnation and growth over this cycle incumbents are phased out of the economy will new innovation occur in formalizing our theory we make a methodological contribution by characterizing dynamic voting equilibria when voters must forecast the effects of different current policies on future prices and policy outcomes

measuring consumer and competitive impact with elasticity decompositions abstract marketing investments are designed to change consumer behavior in ways that help goods compete in the marketplace previous research has focused on using elasticity decompositions to measure how these investments affect either consumer decision making or competing goods on the one hand decision based decompositions attribute the growth in own good demand to changes in the consumers decision making processes on the other hand unit based and share based decompositions attribute the same growth to either rivalrous or nonrivalrous sources the objective of this article is to provide a clear and accurate method that simultaneously attributes the growth in own good demand to changes in 1 consumers decisions 2 competitive demand and 3 competitive market share the author accomplishes this by settling some confusion about what the decision and share based decompositions mean by discussing how each of the decompositions are related to the others and by discussing the research questions th

bad eggs learning by doing and the choice of technology we model long run economic development through technology adoption under scientific uncertainty about environmental effects there are four possible long run equilibria in a socially planned economy high growth adopt rapidly but abandon damaging technologies once revealed ddt cfcs cautious brake the introduction of new technologies to avoid mistakes genetically modified organisms no growth halt technological progress to preserve secondary knowledge and collapse adopt rapidly without ever abandoning damaging technologies in the base parameterization a short sighted social planner chooses the cautious strategy a far sighted planner chooses the high growth strategy unless damages are irreversible in which case the cautious strategy again dominates regulatory options in the market economy are investigated pollution taxes do not affect the firm s level of precaution if they can only be applied after the adopting firm has reaped the benefits however they do encourage the abandonment of damaging technologies liability rules do affect precaution but may lead to excessive caution or even a no growth trap

cross national laws and differences in market response international differences in general and cultural differences in particular exert profound influence on what people buy in modeling market response highly visible international differences in purchase behavior seem to lead to an assumption by management scientists that there are large parallel international differences in market response to such things as price and advertising in an interpretive review of market response models we do find international differences in response parameters but we also find that parameter differences due to cross national factors tend to be smaller than differences related to technical characteristics of the model or to product market specifics we suggest two new intermediate categories of generalizability between the extremes of everything is the same and everything is different we also argue that one promising approach to international generalization is through appropriate statistical adjustment of parameters from existing models

team incentives and performance evidence from a retail chain in a field experiment with a retail chain 1 300 employees 193 shops randomly selected sales teams received a bonus the bonus increases both sales and number of customers dealt with by 3 percent each dollar spent on the bonus generates 3 80 in sales and 2 10 in profit wages increase by 2 2 percent while inequality rises only moderately the analysis suggests effort complementarities to be important and the effectiveness of peer pressure in overcoming free riding to be limited after rolling out the bonus treatment and control shops performance converge suggesting long term stability of the treatment effect

technology adoption with finite horizons the purpose of this paper is to study the relation between the age of an agent and her decisions about adopting new technologies to this end i analyze the optimal sequence of technology upgrades by an agent who lives for a finite period of time other characteristics of the environment are the existence of technology specific learning by doing technology growth and adoption costs a finite planning horizon implies that the technology adoption problem is non stationary and the frequency of adoptions changes over time this paper provides results for the computation of the optimal plan and explores numerically the life cycle pattern of technology switches adoptions may become more frequent as the agent grows older however the sign of the association between age and the adoption of new technologies is sensitive to variation in parameters this is not at odds with the findings of recent empirical studies

modelling the effects of promotion expenditures on sales of pharmaceuticals the successful innovation of pharmaceuticals requires a substantial amount of marketing support despite concerns about the effects of these marketing efforts this study considers prior findings that indicate that higher marketing expenditures for a brand reduce its price elasticity of demand which may lead to higher prices in the context of the dutch pharmaceutical market the authors find that parameters are heterogeneous across brands and that marketing effects differ across product life cycle stages they propose a separate analysis of established and new brands for established brands marketing efforts neither have a positive effect on sales nor do they affect the price elasticity for new brands several proposed models might capture their diffusion pattern the diffusion of innovation models provide the best results marketing accelerates the rate of diffusion and leads to a higher baseline level of sales

assessing salesforce marginal productivity marginal productivity of salesforce excluding checkout clerks in a retail store is difficult to assess an analytical model is presented here explaining this productivity using salesforce workers per hour as the factor of production the explanatory variable and sales transactions per hour as the level of production the explained variable the model incorporates self service transactions controls for various seasonal effects time of day day of the week month of the year and generates solutions for in store salesforce assignment across opening hours and sales points to control for possible endogeneity between the transactions and salesforce size variables instrumental variables are employed in the calibration process the model is calibrated using data from a major retail chain based in latin america both at the storewide level and for groups of individual store departments the results corroborate the existence of diminishing returns to scale for the workers per hour factor and a significant l

endogeneity and heterogeneity in a probit demand model estimation using aggregate data two issues that have become increasingly important while estimating the parameters of aggregate demand functions to study firm behavior are theendogeneity of marketing activities typically price andheterogeneity across consumers in the market under consideration ignoring these issues in the estimation of the demand function parameters can lead to biased and inconsistent estimates for the effects of marketing activities endogeneity and heterogeneity have achieved prominence in large measure because of the increasing popularity of logit models to characterize demand functions usingaggregate data the logit model accounts for purchase incidence and brand choice by including a no purchase alternative in the consumer s choice set this allows for category sales to change as a function of the marketing activities of brands in the category there are three issues with using the logit model with the no purchase option to characterize demand when studying competitive interactions among firms 1 the marketing literature dealing with brand choice behavior at the consumer level has found that the iia restriction is not appropriate as each brand in the choice set is more similar to some brands than it is to others 2 studies have found that the purchase incidence decision is distinct from the brand choice decision hence it may not be appropriate to model the no purchase decision as just another alternative in the choice set with the iia restriction holding across all brands and the no purchase option 3 even if the distinction between the purchase incidence and brand choice decisions is accounted for via for example a nested logit specification accounting for the purchase incidence decision with aggregate data requires assumptions for computing the share of the no purchase alternative which is otherwise unobserved in this paper we propose a probit model as an alternative to the logit model to specify the aggregate demand functions of firms competing in oligopoly markets the probit model avoids the iia property that affects the logit model at the individual consumer level furthermore the probit model can naturally account for the distinction between the purchase incidence and brand choice decisions due to the general covariance structure assumed for the utilities of the alternatives we demonstrate how the parameters of the proposed model can be estimated using aggregate time series data from a product market in the estimation we account for the endogeneity of marketing variables as well as for heterogeneity across consumers our results indicate that both endogeneity as well as heterogeneity need to be accounted for even after allowing for a non iia specification at the individual consumer level specific to our data we also find that ignoring endogeneity has a bigger impact on the estimated price elasticities than ignoring the effects of heterogeneity a comparison of the elasticities obtained from the probit model with those from the corresponding logit specification indicates that therange of elasticities obtained from the probit model across brands is larger than that obtained from the logit the results have implications for issues such as firm level pricing in addition to specifying a probit model and providing comparisons with the logit model the paper also addresses the third issue raised above we propose a simple alternative to the purchase incidence brand choice specification by decomposing the demand for a brand into a category demand equation and a conditional brand choice share equation we provide a comparison of results from this specification to those from the specification that includes the no purchase alternative and find that estimated elasticities are sensitive to the specification used we also estimate the demand function parameters using a traditional specification such as the double logarithmic model here we find that the estimated elasticities could be signed in such a manner as to be not useful for firm level pricing decisions one of the key limitations of the proposed model is that while it accounts for the purchase incidence and brand choice decisions of households it does not account for differences across consumers in their purchase quantities the model and analysis are best suited for product categories in which consumers typically make single unit purchases another limitation is more practical in nature while recent advances have been made in computing probit probabilities it could nevertheless be a challenge to do so when the number of alternatives is large

pharmaceutical advertising and medicare part d abstract we explore how and to what extent prescription drug insurance expansions affect incentives for pharmaceutical advertising when insurance expansions make markets more profitable firms respond by boosting advertising theory suggests this effect will be magnified in the least competitive drug classes where firms internalize a larger share of the benefits from advertising empirically we find that the implementation of part d coincides with a 14 19 increase in total advertising expenditures this effect is indeed concentrated in the least competitive drug classes the additional advertising raised utilization among non elderly patients outside the part d program by about 3 6 this is roughly half of the direct utilization effect of part d on elderly beneficiaries the results suggest the presence of considerable spillover effects from publicly subsidized prescription drug insurance on the utilization and welfare of consumers outside the program