analysis of new product diffusion using a four segment trial repeat model a four segment trial repeat model is developed to model sales of a frequently purchased product in the early stage of the product s life cycle the model can be calibrated using aggregate data alone two versions of the model one emphasizing the competitive aspect of marketing communications and another emphasizing the informative aspect are estimated from data on 21 newly launched pharmaceutical products the model provides valuable diagnostics such as an early estimate of the long run market share of the new product a decomposition of total sales into trial sales due to marketing activities trial sales due to word of mouth and repeat sales the changing composition of the trial market and repeat market over time and the time when the trial market is expected to be saturated in addition the effectiveness of the entrant s marketing efforts word of mouth communication and buyers trial experience are analyzed with the model a cross sectional analysis based on the empirical estimation results of our model reveals interesting insights into product introduction strategies we find that 1 the effectiveness of the firms communication activities on trial is related mainly to product quality attributes and market growth whereas that of word of mouth is associated with product class characteristics and market competitiveness and 2 the effect of product trial on repeat purchases is related mainly to product quality attributes and various market characteristics such as size growth competitiveness and familiarity

a parsimonious model for forecasting gross box office revenues of motion pictures the primary objective of this paper is to develop a parsimonious model for forecasting the gross box office revenues of new motion pictures based on early box office data the paper also seeks to provide insights into the impact of distribution policies on the adoption of new products the model is intended to assist motion picture exhibitor chains retailers in managing their exhibition capacity and in negotiating exhibition license agreements with distributors studios by allowing them to project the box office potential of the movies they plan to or currently exhibit based on early box office results it is also of interest to practitioners in other software industries e g music books cd roms where the distribution intensity is highly variable over the product life cycle and is an important determinant of new product adoption patterns the model and its extensions are of interest to academic researchers interested in modeling distribution effects in new product adoption as well as forecasters looking for ways to leverage historical data on related products to forecast the sales of new products we draw upon a queuing theory framework to conceptualize stochastically the consumer s movie adoption process in two steps the time to decide to see the new movie and the time to act on the adoption decision the parameter for the time to decide process captures the intensity of information intensity flowing from various information sources while the parameter for the time to act process is related to the delay created by limited distribution intensity and other factors our conceptualization extends existing new product forecasting models which assume that consumers act instantaneously on the motivating information they receive about the new product the resulting model is parsimonious yet it accommodates a wide range of adoption patterns in addition the stochastic formulation allows us to quantify the uncertainty surrounding the expected adoption pattern in the empirical testing we focus on the most parsimonious version of the modeling framework boxmod i a model that assumes stationarity with respect to the two shape parameters that characterize the adoption process the model produces fairly accurate early forecasts using at most the first three weeks of data for calibration and the predictive performance of the model compares favorably with benchmark models we propose extensions of the basic model that account for more realistic non stationary distribution intensity patterns including a wide release pattern that relies on intensive distribution and promotion and a platform release pattern that involves a gradual buildup of distribution intensity finally we present an adaptive weighing scheme that combines initial parameter estimates obtained from a meta analysis procedure with estimates obtained from early data to produce forecasts of box office revenues for a new movie when little or no box office data are available an important finding from the empirical testing is that motion picture box office revenue patterns display remarkable empirical regularity we find that there are only three classes of adoption patterns and these can all be represented within the basic model by using a two parameter exponential or erlang 2 probability distribution or a three parameter generalized gamma distribution we also find that cumulative box office revenues can be predicted with reasonable accuracy often within 10 of the actual using as little as two or three data points however our attempts to predict revenue patterns without any sales data meet with limited success while the scale parameter can be estimated reasonably well from a historical database of parameter values we find that it is considerably more difficult to predict the shape parameters using historical data the parsimony we seek in developing the model comes at the cost of several limiting assumptions we assume that the time to decide subprocess and the time to act subprocess are independent which may not be the case if decisions on continued exhibition by retailers are endogenously related to box office revenues over the life cycle in the basic model formulation we also assume that the time to act process can be represented by an exponential distribution which may not always be the case while we provide some empirical evidence to support these assumptions further research could relax these and other assumptions to enrich the basic model although this would entail some loss in parsimony

the competitive dynamics of new dvd releases we study the market for new movie dvds in the united states our demand model captures seasonality freshness i e time between theatrical and dvd release and state dependence we also develop a structural model of dynamic competition in which studios balance waiting for high demand weeks against reduced freshness and against competitive crowding we find that studios emphasize dvd revenues from larger movies by theatrical revenue over dvd revenues from smaller movies studios also emphasize revenue from consumers who prefer larger and fresher movies these behaviors are consistent with managerial conservatism studio executives forgo dvd revenues from smaller movies to ensure the dvd success of larger movies this paper was accepted by j miguel villas boas marketing

a bayesian model to forecast new product performance in domestic and international markets this paper attempts to shed light on the following research questions when a firm introduces a new product or service how can it effectively use the different information sources available to generate reliable new product performance forecasts how can the firm account for varying information availability at different stages of the new product launch and generate forecasts at each stage we address these questions in the context of the sequential launches of motion pictures in international markets players in the motion picture industry require forecasts at different stages of the movie launch process to aid decision making and the information sets available to generate such forecasts vary at different stages despite the importance of such forecasts the industry struggles to understand and predict sales of new movies in domestic and overseas markets we develop a bayesian modeling framework that predicts first week viewership for new movies in both domestic and several international markets we focus on the first week because industry players involved in international markets studios distributors and exhibitors are most interested in these predictions we draw on existing literature on forecasting performance of new movies to formulate our model specifically we model the number of viewers of a movie in a given week using a poisson count data model the number of screens distribution strategy movie attributes such as genre and presence absence of stars are among the factors modeled to influence viewership we employ a hierarchical bayes formulation of the poisson model that allows the determinants of viewership to vary across countries we adopt the bayesian approach for two reasons first it provides a convenient framework to model varying assumptions of information availability specifically it allows us to make forecasts by combining different sources of information such as domestic and international market specific data second this methodology provides us with the entire distribution of the new movie s performance forecast such a predictive distribution is more informative than a point estimate and provides a measure of the uncertainty in the forecasts we propose a bayesian prediction procedure that provides viewership forecasts at different stages of the new movie release process the methodology provides forecasts under a number of information availability scenarios thus forecasts can be obtained with just information from a historical database containing data on previous new product launches in several international markets as more information becomes available the forecasting methodology allows us to combine historical information with data on the performance of the new product in the domestic market and thereby to make forecasts with less uncertainty and greater accuracy our results indicate that for all the countries in the data set the number of screens on which a movie is released is the most important influence on viewership furthermore we find that local distribution improves movie sales internationally in contrast to the domestic market we also find evidence of similar genre preferences in geographically disparate countries we find that the proposed model provides accurate forecasts at the movie country level further the model outperforms all the extant models in the marketing literature that could potentially be used for making these forecasts a comparison of root mean square and mean absolute errors for movies in a hold out sample shows that the model that combines information available from the different sources generates the lowest errors a bayesian predictive model selection criterion corroborates the superior performance of this model we demonstrate that the bayesian model can be combined with industry rules of thumb to generate cumulative box office forecasts in summary this research demonstrates a bayesian modeling framework that allows the use of different information sources to make new product forecasts in domestic and international markets our results underscore the theme that each movie is unique as is each country and viewership results from an interaction of the product and the market hence the motion picture industry should use both product specific and market specific information to make new movie performance forecasts

the demand for ldc exports of manufactures estimates from hong kong exports of manufactures from developing countries are generally believed to be sensitive to changes in the level of income in the developed countries their major market this belief is grounded on both casual observation especially from the experience of recent recessions and on extensive econometric evidence of low price elasticities and high income elasticities of demand for ldc exports in developed countries this paper argues that both casual observation and previous econometric evidence are misleading the aim of the paper is to show the order of magnitude of the bias contained in previous econometric estimates of price and income elasticities of demand for ldc exports of manufactures due to neglect of supply side influences previous econometric work has neglected the supply side of ldc exports for the simple reason that it is difficult to model it is difficult to model properly the supply of aggregate ldc exports since the determinants of export supply differ from country to country even for a single country modelling export supply is complicated since in addition to foreign demand and domestic supply exports are determined in part by domestic demand for exportables furthermore in most ldcs the incentive to export is strongly influenced by complex and continually changing industrial and trade policy measures there is one major exception hong kong one of the developing world s largest and most successful exporters of manufactured goods the manufacturing sector in hong kong is almost completely specialised exporting 95 of output consequently domestic demand plays no part in determining the volume of exports furthermore factor markets and the manufacturing sector are almost completely free from government intervention the main exception being the textile export restraints imposed at the insistence of importing countries the voluntary restraint agreements vras to which hong kong is subject no doubt affect the composition of exports but not necessarily the volume of aggregate exports if resources in the restrained sectors can easily be redeployed elsewhere in the economy judging from past export growth rates the vras do not appear to have had a significant effect on aggregate export growth in hong kong the results reported below also suggest that hong kong has effectively circumvented the trade barriers it faces the hong kong manufacturing sector in many ways resembles a firm in the

a new product growth for model consumer durables this article originally appeared in management science january 1969 volume 15 number 5 pp 215 227 published by the institute of management sciences a growth model for the timing of initial purchase of new products is developed and tested empirically against data for eleven consumer durables the basic assumption of the model is that the timing of a consumer s initial purchase is related to the number of previous buyers a behavioral rationale for the model is offered in terms of innovative and imitative behavior the model yields good predictions of the sales peak and the timing of the peak when applied to historical data a long range forecast is developed for the sales of color television sets

is there persistence in the growth of manufactured exports evidence from newly industrializing countries abstract applying cointegration techniques in a panel data setting we document persistent growth of manufactured exports from certain developing countries to complement the investigation of persistence measured by the country fixed effects we analyze asymmetries in income elasticities for all developing countries the decline in exports with world income contraction is sharper than is the rise on the upswing the decline is however especially pronounced for countries with low or negative persistence the results are consistent with long term buyer supplier relationships that create insiders and outsiders in manufactured goods trading exports are also influenced by the transactional infrastructure proxied by telecommunications penetration

exports of manufactures by developing countries emerging patterns of trade and location developing countries are rapidly increasing their shares of manufactured trade not just in labour intensive products but also in capital and skill intensive ones their shares are rising particularly rapidly in the high technology area however manufactured exports remain highly concentrated in the developing world with a few countries dominating all forms of export within the successful exporting countries there are significant differences in the technology content of exports these trends are difficult to explain with received trade theory even taking human capital into account or with reference to broad economic policies it is useful to bring in learning along with scale economies increasing returns and agglomeration as determinants of comparative advantage these factors imply market failures and so a role for policy in developing genuine comparative advantages this article suggests that emerging trade and location patterns in the developing work are explained by market imperfections and government policies to overcome them

bose einstein dynamics and adaptive contracting in the motion picture industry audiences discover what films they like and spread the word information feedback produces bose einstein dynamics in the motion picture box office revenue distribution information cascades generate box office hits and flops the revenue distribution evolves recursively over the run as a mixture of the opening and a stochastic competition among films the motion picture run is decentralized adaptive and self organizing semistationary admission prices local information and contingency rich contracts match the film rental price and the supply of theatrical engagements to demand copyright 1996 by royal economic society

physician payments under health care reform abstract this study examines the impact of major health insurance reform on payments made in the health care sector we study the prices of services paid to physicians in the privately insured market during the massachusetts health care reform the reform increased the number of insured individuals as well as introduced an online marketplace where insurers compete we estimate that over the reform period physician payments increased at least 11 percentage points relative to control areas payment increases began around the time legislation passed the house and senate the period in which their was a high probability of the bill eventually becoming law this result is consistent with fixed duration payment contracts being negotiated in anticipation of future demand and competition

an empirical model of mark ups in a quality differentiated export market abstract this paper develops an empirical model to allow for imperfect competition in the market for traded goods a simultaneous equation model incorporating the demand for and supply of taiwanese footwear exports to the united states is specified and estimated the model allows the identification of two separate sources of mark ups in export prices the first comes from the u s imposed quantitative restriction on these exports the second comes from imperfect competition in the international market for these exports the results suggest competitive behavior by taiwanese footwear exporters the quantitative restriction resulted in a 16 9 percent mark up of prices over marginal cost

research note multinational diffusion models an alternative framework the literature on cross national diffusion models is gaining increased importance today due to the needs of present day managers new product sales growth in a given nation or society is affected by many factors rogers 1995 and of these sociocontagion or word of mouth has been found to be the most important factor that characterizes the diffusion process bass 1969 moore 1995 hence it is interesting and perhaps challenging to analyze what would happen if a new product diffuses in parallel in two neighboring but culturally different countries not only will we expect the diffusion process in the two countries to be different but we will also expect some interaction among them especially if the two societies mingle with each other there are two streams of research in cross national diffusion the first type focuses on exploring the differences between diffusion processes in two countries and finding out whether those differences can be attributed to social and cultural differences between the countries involved examples of this type of research are found in takada and jain 1991 gatignon et al 1989 helsen et al 1993 and kumar et al 1998 these studies did find some relationship between the cultural differences of the countries studied and the differences in the diffusion process the second stream of research focuses on modeling explicitly the interaction between the diffusion processes in two countries the interaction is typically captured through lead lag effect eliashberg and helsen 1996 kalish et al 1995 where the sales process in the lead country i e the country where the product was first introduced is modeled to affect the sales process in the lag country i e the country where the product was introduced a few years later another method to study the interaction among the diffusion processes in two countries was suggested by putsis et al 1997 who used a mixing model to empirically explore the existence of such interactions these studies basically observed that when a new product is introduced early in one country and with a time lag in subsequent countries the consumers in the lag countries learn about the product from the lead country adopters resulting in a faster diffusion rate in the lag countries ganesh and kumar 1996 formulized this effect as the learning effect and subsequently ganesh et al 1997 found this learning effect to be influenced by country specific factors cultural similarity economic similarity and time lag elapsed between the lead and the lag countries and product specific factors continuous vs discontinuous innovation and the presence or absence of a standardized technology a careful analysis of the extant literature on the second stream of research would reveal that neither the learning effect model nor the mixing model can be modified to accommodate the other model our contribution to the literature exactly addresses this point in this paper an alternative framework is proposed that has two unique features first the framework is flexible enough to not only account for the lead country affecting the lag countries and vice versa but also to accommodate the simultaneous interaction among countries in explaining the diffusion processes in the countries concerned using multiple product categories and a variety of new product introduction situations we empirically demonstrate the flexibility and efficiency of our proposed framework we found strong evidence of all types of interactions namely lead lag lag lead and simultaneous which evidence suggests that one cannot afford to omit any of the interactions the second unique feature of our paper is the estimation procedure that we used because statistical estimation of a dynamic process that includes lead lag lag lead and simultaneous types of causality within a single framework is not straightforward we suggest an iterative estimation procedure for the estimation this new procedure not only proved to be flexible in accommodating different types of interaction but also converged rather quickly in all of the cases that we empirically tested noting that the statistical properties of these estimators are not generally available we carried out a simulation exercise that clearly revealed the efficiency of the proposed estimation procedure after analyzing the interaction we went further and showed that the magnitude of the cross national influences is affected by certain country specific and product specific factors the flexibility of the proposed method over the existing methods is demonstrated through obtaining superior forecasts with the proposed method several interesting insights for managers concerned with formulating international marketing strategies are offered

forecasting marketing mix responsiveness for new products abstract before a new product launch marketers need to infer how demand will respond to various levels of marketing mix variables to set an appropriate marketing plan a critical challenge in estimating marketing mix responsiveness from historical data is that the observed decisions were affected by private information possessed by managers about the heterogeneous effects of marketing mix variables on sales the authors refer to this as the slope endogeneity problem such endogeneity differs from the intercept endogeneity problem which has been widely acknowledged in the literature to correct for the slope endogeneity bias the authors develop a conceptually simple control function approach that is amenable to multiple endogenous variables and marketing mix carryover effects the method is applied to forecasting advertising responsiveness in the u s dvd market the results suggest that advertising responsiveness varies substantially across dvd titles and that estimated marketing mix elasticities w

moviemod an implementable decision support system for prerelease market evaluation of motion pictures in spite of the high financial stakes involved in marketing new motion pictures marketing science models have not been applied to the prerelease market evaluation of motion pictures the motion picture industry poses some unique challenges for example the consumer adoption process for movies is very sensitive to word of mouth interactions which are difficult to measure and predict before the movie has been released in this article we undertake the challenge to develop and implement moviemod a prerelease market evaluation model for the motion picture industry moviemod is designed to generate box office forecasts and to support marketing decisions for a new movie after the movie has been produced or when it is available in a rough cut but before it has been released unlike other forecasting models for motion pictures the calibration of moviemod does not require any actual sales data also the data collection time for a product with a limited lifetime such as a movie should not take too long for moviemod it takes only three hours in a consumer clinic to collect the data needed for the prediction of box office sales and the evaluation of alternative marketing plans the model is based on a behavioral representation of the consumer adoption process for movies as a macroflow process the heart of moviemod is an interactive markov chain model describing the macro flow process according to this model at any point in time with respect to the movie under study a consumer can be found in one of the following behavioral states undecided considerer rejecter positive spreader negative spreader and inactive the progression of consumers through the behavioral states depends on a set of movie specific factors that are related to the marketing mix as well as on a set of more general behavioral factors that characterize the movie going behavior in the population of interest this interactive markov chain model allows us to account for word of mouth interactions among potential adopters and several types of word of mouth spreaders in the population marketing variables that influence the transitions among the states are movie theme acceptability promotion strategy distribution strategy and the movie experience the model is calibrated in a consumer clinic experiment respondents fill out a questionnaire with general items related to their movie going and movie communication behavior they are exposed to different sets of information stimuli they are actually shown the movie and finally they fill outpostmovie evaluations including word of mouth intentions these measures are used to estimate the word of mouth parameters and other behavioral factors as well as the movie specific parameters of the model moviemod produces forecasts of the awareness adoption intention and cumulative penetration for a new movie within the population of interest for a given base marketing plan it also provides diagnostic information on the likely impact of alternative marketing plans on the commercial performance of a new movie we describe two applications of moviemod one is a pilot study conducted without studio cooperation in the united states and the other is a full fledged implementation conducted with cooperation of the movie s distributor and exhibitor in the netherlands the implementations suggest that moviemod produces reasonably accurate forecasts of box office performance more importantly the model offers the opportunity to simulate the effects of alternative marketing plans in the dutch application the effects of extra advertising extra magazine articles extra tv commercials and higher trailer intensity compared to the base marketing plan of the distributor were analyzed we demonstrate the value of these decision support capabilities of moviemod in assisting managers to identify a final plan that resulted in an almost 50 increase in the test movie s revenue performance compared to the marketing plan initially contemplated management implemented this recommended plan which resulted in box office sales that were within 5 of the moviemod prediction moviemod was also tested against several benchmark models and its prediction was better in all cases an evaluation of moviemod jointly by the dutch exhibitor and the distributor showed that both parties were positive about and appreciated its performance as a decision support tool in particular the distributor who has more stakes in the domestic performance of its movies showed a great interest in using moviemod for subsequent evaluations of new movies prior to their release based on such evaluations and the initial validation results moviemod can fruitfully and inexpensively be used to provide researchers and managers with a deeper understanding of the factors that drive audience response to new motion pictures and it can be instrumental in developing other decision support systems that can improve the odds of commercial success of new experiential products

does twitter chatter matter online reviews and box office revenues with a rapid rise of text based social media and online word of mouth wom activity millions of people express their thoughts and opinions on a variety of topics considering that nowadays wom is

externalities and growth accounting this paper tackles two puzzles the high empirical elasticity of aggregte output with respect to the measured capital input and the seemingly high variability of growth rates over countries in the medium run we find that one need not invoke increasing returns or externalities to capital to explain these two puzzles rather they are consistent with a constant returns to scale aggregate production function so long as the exogenous solow residual process has enough persistence in it in our model causality runs exclusively from knowledge to capital and therefore the apparent absence of an external effect to the capital input says nothing about the importance of spillovers in the creation of knowledge copyright 1991 by american economic association

innovation diffusion in the presence of supply restrictions innovation diffusion models are developed to represent the spread of a new product from its manufacturers to its ultimate users in the marketplace however the growth of a new product can be retarded by supply restrictions such as the unavailability of the product due to limitations on the production capacity or difficulties encountered in setting up distribution systems in the presence of supply restrictions diffusion models must be developed to capture the dynamics of supply restrictions and to allow management to evaluate the impact of such supply restrictions on the growth of a new product in the market place based on the bass innovation diffusion model the objective of this paper is to suggest a parsimonious diffusion model that integrates the demand side dynamics with the supply side restrictions the sensitivity of innovation diffusion patterns in the presence of supply restrictions is examined an application examining the diffusion of new telephones in israel is documented to illustrate the usefulness of the proposed model

mixing behavior in cross country diffusion diffusion models represent one of the key successes in marketing science we understand a great deal about what influences and shapes within country diffusion patterns however we understand far less about what influences and shapes cross country or inter country diffusion patterns clearly for firms operating in a truly global environment understanding to what extent prior adoption in one country affects current and consequently future adoption in another country can be an important consideration further understanding how the pattern of interaction across countries impacts the diffusion process can have profound implications for product launch strategies for new durable products in this paper we address the extent to which prior adoption of a new product in one country affects adoption in other countries in particular we investigate the importance of the pattern of interaction what we call mixing across countries in the context of a new product diffusion model more specifically mixing refers to the pattern of communication within and across countries for example do italians communicate only with other italians or do they influence consumers in other countries understanding and empirically estimating how these mixing patterns across countries influence the subsequent diffusion process is the central research objective of this paper while previous research in marketing addressing cross country diffusion has assumed very specific forms of cross country interaction the present study develops and estimates a flexible form of mixing that allows for the simultaneous estimation of mixing patterns across multiple countries in particular we examine the effect of mixing behavior across populations on new product adoption viewing mixing as occurring across a continuum with segregation no mixing at one end and random mixing at the other intermediate forms of mixing lie along this continuum and are called bernoulli mixing in order to produce generalizable results we obtained sales data on four product categories in the european community ec nations vcrs from 1977 1990 microwave ovens 1975 1990 compact disc players 1984 1993 and home computers 1981 1991 for each product data were collected for 10 ec nations great britain germany france italy spain belgium denmark netherlands sweden and austria a diffusion model that incorporates cross country prior adoption cross country mixing patterns and individual country covariates was estimated simultaneously across the 10 countries for each of the four products on the basis of the empirical results we conclude that mixing behavior across segments is an important consideration in new product diffusion specifically the observed pattern of mixing and the strength of cross segment influences are important considerations in allocating the marketing mix during product introduction stages the practical implication of mixing behavior is that if one wishes to understand diffusion in belgium for example it is important to not only know the diffusion parameters in belgium but also those in other ec nations accordingly these results should be of interest to managers responsible for coordinating new product launches across countries and to researchers interested in investigating cross country diffusion issues as an example of the strategic implications of the results we note that under bernoulli mixing future country launches will benefit not only from prior adoption in countries with high overall contact rates but in particular from countries with high rates of contact with other countries although there is some variance across products in general germany france italy and spain are the most gregarious as measured by the rate of contact the results suggest that a strategy of first focusing on germany france italy and spain will maximize adoption in subsequent countries each of these countries tends to have a higher percentage of its contacts with individuals internal to its borders as well as with other countries this suggests that these countries would have relatively quick adoption internally while having a strong influence externally further for countries such as denmark netherlands austria and sweden a higher percentage of their contacts are derived from outside their borders thus seeding the diffusion process by introducing first in germany france italy and spain would benefit later adoption in countries such as denmark netherlands austria and sweden although the strength of the individual country influence varies from product to product this result is generally consistent across the four products

the relationship between waste paper and other inputs in the swedish paper industry a number of life cycle assessment studies havecompared the environmental impacts of materialrecycling and incineration of waste paper theyhave shown that in most cases a recyclingscenario results in lower total energy use butgreater use of fossil fuels if waste paper andfossil fuels are complements parts of theenvironmental argument for recycling isabolished this paper estimates a cost functionfor the swedish paper industry if the costshares are co integrated an error correctionmodel will be used to model the dynamics short and long run elasticities are thencalculated to address the relationship betweenwaste paper and the other inputs capital labor purchased pulp fiber fossil fuels andelectricity contrary to the life cycleassessment studies the results show that wastepaper and fossil fuels are substitutes andthat waste paper and electricity arecomplements

invited commentary making sense of these million dollar babies rationale behind superstar profit participation contracts the article by eliashberg et al 2006 provides a comprehensive review of current research on the motion picture industry with a special focus on managerially relevant issues on the supply side it walks the readers through the three distinct stages in the movie value chain of production distribution and theatrical exhibition and it points out promising avenues of future research the contractual issues between talents and the stu

social contagion and income heterogeneity in new product diffusion a meta analytic test standard diffusion models capture social contagion only coarsely and do not allow one to operationalize different contagion mechanisms moreover there is increasing skepticism about the importance of contagion and as has long been known s shaped diffusion curves can also result from heterogeneity in the propensity to adopt we present hypotheses about conditions under which specific contagion mechanisms and income heterogeneity are more pronounced and test these hypotheses using a meta analysis of the q p ratio in applications of the bass diffusion model the ratio is positively associated with the gini index of income inequality in a country supporting the heterogeneity in thresholds interpretation the ratio also varies as predicted by the gamma shifted gompertz diffusion model but the evidence vanishes after controlling for national culture as to contagion the q p ratio varies with the four hofstede dimensions of national culture for three of them in a direction consistent with the social contagion interpretation furthermore products with competing standards have a higher q p ratio which is again consistent with the social contagion interpretation finally we find effects of national culture only for products without competing standards suggesting that technological effects and culturally moderated social contagion effects might not operate independently from each other

differences in income elasticities and trends in real exchange rates abstract one might expect that differences in income elasticities in trade and or differences in growth rates among countries would give rise to strong secular trends in real exchange rates for example fast growing countries might need steady depreciation to get the world to accept their growing exports in fact however income elasticities are systematically related to growth rates by the 45 degree rule under which fast growing countries appear to face high income elasticities of demand for their exports while having low income elasticities of import demand the net effect of this relationship between elasticities and growth rates is that secular trends in real exchange rates are much smaller than one might otherwise have expected relative ppp holds fairly well this paper documents the existence of a 45 degree rule and suggests an explanation in terms of increasing returns and product differentiation

endogeneity in marketing decision models there are many critical concerns including the accounting for endogeneity when one is properly estimating response functions however it is sometimes certainly not always better to leave some variables exogenous when building mathematical models intended to help decision makers the exogenous variables allow the decision maker to better adapt the mathematical model to different situations and to incorporate myriad variables and constraints outside of the model

income and price elasticities for exports of developing countries income and price elasticities for non oil exports of non opec developing countries play an imp ortant role in the development of policy responses to the debt crisis these elasticities are estimated for the major standard internation al trade classification commodity groups based on two stage least sq uares and quarterly data for 1973 to 1984 the income elasticity for non oil exports ranges between 1 4 and 1 9 the analysis also tests t he properties of the error term the dynamic specification and para metric stability the sensitivity of the results is assessed using sh iller s lags and band spectrum estimation copyright 1988 by mit press

silverscreener a modeling approach to movie screens management managing the allocation of shelf space for new products is a problem of significant importance for retailers the problem is particularly complex for exhibitors the retailers in the motion picture supply chain because they face dynamic challenges given the short life cycles of movies the changing level of demand over time the scarcity of shelf space and the complex revenue sharing contract between the exhibitor and the distributor in the face of this complexity the aim of current research is to provide a structure for analyzing management problems of exhibitors in the movie industry using a mathematical programming approach and a fast but readily accessible algorithm we propose a decision support model silverscreener whose aim is to help exhibitors make effective and timely decisions regarding theater screens management the major objective is to help select and schedule movies for a multiple screens theater over a fixed planning horizon in such a way that the exhibitor s cumulative profit is maximized by treating the multiple screens as parallel machines and the movies as jobs we provide an analogy of the current problem to the parallel machine scheduling problem we formulate the resulting problem as an integer program we depart from the typical parallel machine scheduling problems by introducing the time indexed formulation that is particularly useful for solving the current problem an important distinction between the current problem and typical machine scheduling problems is that the present approach allows for the choice of which movies to play typically in machine scheduling all jobs have to be scheduled we provide various analyses of normative versus actual decision making based on publicly available data the developed model is readily implementable and appears to lead to improved profitability in different comparative cases through sensitivity analysis we demonstrate that the above results are robust to variations in various parameters of the problem the main findings and insights from the normative policy suggest the following 1 based on silverscreener s recommendations the exhibitor can achieve substantially higher cumulative profit 2 the improvement over actual decisions in terms of profitability appears to result from a combination of better selection and scheduling of the movies 3 the general structure of the exhibitor s normative decision is choose fewer right movies and run them longer we propose a two tier integrated application of the model to show how the model can be applied to realistic decisionmaking the first tier involves development of a movie selection plan to help the manager plan an entire season and bid for movies before the start of that season an ex ante revenue prediction scheme is developed based intuitively on a matching of the forthcoming movies with similar movies played in this theater previously if the forthcoming season s scheduling plan can be visualized as a two dimensional week by screen matrix then that matrix contains only empty cells before the first tier after a bid plan is developed the exhibitor can fill some of those empty cells the remaining empty cells represent slots which can be decided during the season by either extending movies the exhibitor booked before the season or by scheduling other movies which may become available later in the season this motivates the second tier adaptive scheduling approach of the integrated approach the second tier helps the exhibitor in weekly decision making during the season this application involves rolling and updating data from one time window to another the approaches followed in the two tiers of the integrated application are quite general in that they can incorporate a sophisticated demand prediction model managerial judgments or a combination of both we also propose an alternative behavioral decision rule heuristic which exemplifies relationship dilemmas in the movie industry this heuristic shows that the exhibitors need to be selective in their choice of movies and may suffer a substantial loss in profitability if they place too much emphasis on accommodating distributors

something to talk about social spillovers in movie consumption we exploit the randomness of weather and the relationship between weather and moviegoing to quantify social spillovers in movie consumption instrumenting for early viewership with plausibly exogenous weather shocks captured in lasso chosen instruments we find that shocks to opening weekend viewership are doubled over the following five weekends our estimated momentum arises almost exclusively at the local level and we find no evidence that it varies with either ex post movie quality or the precision of ex ante information about movie quality suggesting that the observed momentum is driven in part by a preference for shared experience and not only by social learning

demand and supply factors in the determination of nie exports a simultaneous error correction model for hong kong this paper considers the issue of whether a small developing economy such as hong kong faces a perfectly elastic demand for its exports of manufactured goods we construct a simultaneous demand and supply system which is estimated using full information maximum likelihood methods and which allows us to clearly identify demand and supply factors in determining export volumes and prices our empirical findings differ from previous studies conducted with this data set in that they suggest that even a small dynamic newly industrialized economy such as hong kong may not face infinitely elastic demand for its manufactured goods we also advance some reasons to explain why the small country assumption may not be applicable in the case of most industrialized economies

the consequences of mrs thatcher for u k manufacturing exports this article sets out to study whether the dramatic events that took place in the u k economy since 1979 can be shown to have had any effects on certain crucial parameters that determine the export performance of the u k manufacturing sector a number of export models are examined over the post 1979 period and all reveal a certain amount of systematic parameter variation in particular estimates of the world income elasticity of demand for u k manufacturing exports show an upward drift when this drift is explicitly modeled using a spline function approach to allow time varying parameters the data do not reject the hypothesis that this income elasticity has risen from its traditional postwar value of around 0 7 to around unity in 1986 this model is applied to explain export performance of both aggregate u k manufacturing as well as of individual manufacturing industries copyright 1989 by royal economic society

growing growing gone cascades diffusion and turning points in the product life cycle research on the product life cycle plc has focused primarily on the role of diffusion this study takes a broader theoretical perspective on the plc by incorporating informational cascades and developing and testing many new hypotheses based on this theory on average across 30 product categories the authors find that i new consumer durables have a typical pattern of rapid growth of 45 per year over 8 years ii this period of growth is followed by a slowdown when sales decline by 15 and stay below those of the previous peak for 5 years iii slowdown occurs at 34 population penetration and about 50 of ultimate market penetration iv products with large sales increases at takeoff tend to have larger sales declines at slowdown v leisure enhancing products tend to have higher growth rates and shorter growth stages than nonleisure enhancing products time saving products tend to have lower growth rates and longer growth stages than nontime saving products vi lower probability of slowdown is associated with steeper price reductions lower penetration and higher economic growth vii a hazard model can provide reasonable predictions of the slowdown as early as the takeoff the authors discuss the implications of these findings

demand and supply dynamics for sequentially released products in international markets the case of motion pictures we develop an econometric model to study a setting in which a new product is launched first in its domestic market and only at a later stage in foreign markets and where the product s performance demand and availability supply are highly interdependent over time within and across markets integrating literature on international diffusion success breeds success trends and the theatrical motion picture industry the focus of the empirical analysis we develop a dynamic simultanenous equations model of the drivers and interrelationship of the behavior of consumers audiences and retailers exhibitors our findings emphasize the importance of considering the endogeneity and simultaneity of audience and exhibitor behavior and challenge conventional wisdom on the determinants of box office performance which is predominantly based on modeling frameworks that fail to account for the interdependence of performance and availability specifically we find that variables such as movie attributes and advertising expenditures which are usually assumed to influence audiences directly mostly influence revenuesindirectly namely through their impact on exhibitors screen allocations in addition consistent with the idea that the buzz for a movie is perishable we find that the longer is the time lag between releases the weaker is the relationship between domestic and foreign market performance an effect mostly driven by foreign exhibitors screen allocations

how did health care reform in massachusetts impact insurance premiums it is widely recognized that the 2006 massachusetts health reforms served as a blueprint for national reform under the 2010 affordable care act aca as such there is interest in using the massachusetts experience to understand how insurance premiums might change under the aca in this paper we analyze changes in private insurance premiums in massachusetts between 2002 and 2010 in contrast to earlier estimates from massachusetts cogan hubbard and kessler 2010 we find no statistical evidence of changes in group premiums by contrast we find large reductions in non group premiums in massachusetts relative to the rest of the u s

does health reform affect self employment evidence from massachusetts this paper evaluates whether the implementation of the 2006 massachusetts health reform law affected the decision of taxpayers to be self employed using both difference in differences and synthetic control methods on a panel of tax returns that spans 1999 2010 though tenuous our results suggest that the reform led to a decline in the rate of taxpayers earning a majority of income from self employment in addition it appears to have had a positive impact on earning some self employment income among joint filers and earning the majority of income from self employment among older taxpayers but these were offset by negative impacts on single filers and taxpayers age 35 49

adverse selection and an individual mandate when theory meets practice we develop a model of selection that incorporates a key element of recent health reforms an individual mandate using data from massachusetts we estimate the parameters of the model in the individual market for health insurance we find that premiums and average costs decreased significantly in response to the individual mandate we find an annual welfare gain of 4 1 per person or 51 1 million annually in massachusetts as a result of the reduction in adverse selection we also find smaller post reform markups

modeling multinational diffusion patterns an efficient methodology the objective of this study is to develop an econometric model for the diffusion of innovations at the individual country level but which also allows the parameters of the process to differ systematically across countries the conceptualization rests on behavioral and spatial theories of diffusion and extends the domain to international markets the cross national model of innovation diffusion which is developed highlights substantive differences and similarities among international markets it also provides estimates for the diffusion parameters even for countries where sales data are not available thereby yielding some insights into the nature of the expected diffusion pattern in these countries prior to market entry