Switching cost and brand loyalty in electronic markets: evidence from on-line retail brokers
ICIS '00 Proceedings of the twenty first international conference on Information systems
Measuring Cross-Category Price Effects with Aggregate Store Data
Management Science
Manufacturing & Service Operations Management
Accounting for Primary and Secondary Demand Effects with Aggregate Data
Marketing Science
An Integrated Virtual Store-Based Approach for Price Determination Before Product Launch
International Journal of Electronic Commerce
A Choice Model for the Selection of Computer Vendors and Its Empirical Estimation
Journal of Management Information Systems
An Integrated Virtual Store-Based Approach for Price Determination Before Product Launch
International Journal of Electronic Commerce
Retail pricing decisions and product category competitive structure
Decision Support Systems
How many tiers?: pricing in the internet transit market
Proceedings of the ACM SIGCOMM 2011 conference
Computers and Industrial Engineering
Manufacturing & Service Operations Management
Linear convergence of tatônnement in a bertrand oligopoly
ICCSA'06 Proceedings of the 2006 international conference on Computational Science and Its Applications - Volume Part III
Handling Endogenous Regressors by Joint Estimation Using Copulas
Marketing Science
Optimal pricing and capacity partitioning for tiered access service in virtual networks
Computer Networks: The International Journal of Computer and Telecommunications Networking
Hi-index | 0.01 |
Discrete choice models of demand have typically been estimated assuming that prices are exogenous. Since unobservable (to the researcher) product attributes, such as coupon availability, may impact consumer utility as well as price setting by firms, we treat prices as endogenous. Specifically, prices are assumed to be the equilibrium outcomes of Nash competition among manufacturers and retailers. To empirically validate the assumptions, we estimate logit demand systems jointly with equilibrium pricing equations for two product categories using retail scanner data and cost data on factor prices. In each category, we find statistical evidence of price endogeneity. We also find that the estimates of the price response parameter and the brand-specific constants are generally biased downward when the endogeneity of prices is ignored. Our framework provides explicit estimates of the value created by a brand, i.e., the difference between consumers' willingness to pay for a brand and its cost of production. We develop theoretical propositions about the relationship between value creation and competitive advantage for logit demand systems and use our empirical results to illustrate how firms use alternative value creation strategies to accomplish competitive advantage.