THE WELFARE EFFECTS OF THIRD‐DEGREE PRICE DISCRIMINATION IN A DIFFERENTIATED OLIGOPOLY

This article examines the welfare effects of third‐degree price discrimination under oligopolistic competition with horizontal product differentiation. We derive a necessary and sufficient condition for price discrimination to improve social welfare: the degree of substitution must be sufficiently greater in the “strong” market (where the discriminatory price is higher than the uniform price) than in the “weak” market (where it is lower). It is verified, however, that consumer surplus is never improved; social welfare improves solely owing to an increase in the firms' profits in the case of linear demands. (JEL D43, L11, L13)     

AN EXPERIMENT ON INNOVATION AND COLLUSION

This paper examines the relationship between product innovation and the success of price collusion using novel laboratory experiments. Average market prices in low innovation (LO) experiments are significantly higher than those in high innovation, but otherwise identical experiments. This price difference is attributed to LO experimental subjects' greater common market experience. The data illustrate how collusion can be perceived as the “only way to make it” in LO markets where product innovation is not a viable strategy for increasing profits. They suggest that product homogeneity can be a proximate cause, and product innovation an ultimate cause, of collusion. (JEL L41, L10, C92)     

DISCOUNT PRICING

We investigate the practice of framing a price as a discount from an earlier price, with information such as “was $200, now $100.” We discuss two reasons why a discounted price—rather than a merely low price—can make a consumer more willing to purchase. First, a high initial price can indicate the seller has chosen to supply a high-quality product. Second, when a seller with limited stock runs a clearance sale, later consumers infer that unsold stock has higher expected quality when its initial price was higher. We also suggest a behavioral explanation, which is that consumers with reference-dependence preferences are more likely to buy if they perceive the price as a bargain relative to the earlier price. Discount pricing is therefore an effective marketing technique, and a seller may wish to deceive potential customers by offering a false discount. The welfare effects of regulation to prevent fictitious pricing are subtle, with potential unintended consequences, and depend on whether consumers are sophisticated or naive. (JEL D18, D42, D83, L15, M31)     

Transaction fee economics in the Ethereum blockchain

We study the economic determinants of transaction fees in the Ethereum blockchain. We estimate an empirical model based on queueing theory and analyze the factors determining the “gas price” (transaction cost per unit of service, “gas”). Using block- and transaction-level data from the Ethereum blockchain, we show that changes in service demand significantly affect the gas price—when there is high block utilization, per-unit fees increase on average, with strong nonlinear effect above 90% utilization. The transaction type is another important factor—larger fraction of regular transactions (direct transfers between users) is associated with higher gas price.     

TRANSPARENCY IN MARKETS FOR EXPERIENCE GOODS: EXPERIMENTAL EVIDENCE

We propose an experimental design to investigate the role of information disclosure in the market for an experience good. The market is served by a duopoly of firms that choose both the quality and the price of their product. Consumers differ in their taste for quality and choose from which firm to buy. We compare four different treatments in which we vary the degree to which consumers are informed about quality. Contrary to theoretical predictions, firms do not differentiate quality under full information. Rather, both tend to offer products of similar, high quality, entailing more intense price competition than predicted by theory. Under no information, we observe a “lemons” outcome where quality is low. At the same time, firms manage to maintain prices substantially above marginal cost. In two intermediate treatments, quality is significantly higher than the no‐information level, and there is evidence that prices become better predictors of quality. Taken together these findings suggest that information disclosure is a more effective tool to raise welfare and consumer surplus than theory would lead one to expect. (JEL L15, C91, D82)     

Correction

In “Is naloxone really needed in buprenorphine product?” (ADAW, June 10), there is an error. The sentence reading “But it is known that naloxone, an opioid antagonist (it is the active ingredient of Vivitrol)…” should have read “But it is known that naloxone, an opioid antagonist (it is the active ingredient of Narcan).…” We regret the error.     

PRODUCER AND CONSUMER RESPONSES TO GREEN HOUSING LABELS

We find “green” labels increase residential property values by an average of 5%. This premium varies by label stringency and across market segments. Builders respond to the stringency of labels by strategically incorporating green features to achieve higher ratings. This strategy seems reasonable as there is no market premium for green features that lead to scores between label rating cutoff values. These results raise important questions as to how green label policies should be designed in order to foster the supply of green features. Gradations of green attributes are influential, particularly for highly rated homes. The most stringent labels have the greatest role at the high price end of the market. (JEL Q20, Q40, R31)     

GROUP LENDING WITH HETEROGENEOUS TYPES

This paper proposes and implements a mixture structure to model repayment behavior in group lending with unobserved group heterogeneity. We discuss the model properties and identification and estimate the model using a rich dataset from a group lending program in India. The estimation results support the existence of two different group types: “responsible” and “irresponsible” groups. We find that the effects of the factors driving repayment behavior differ across types. The model also shows a higher predictive performance than standard probabilistic models, particularly in the identification of potential defaulters. We provide evidence supporting the robustness of our estimations. (JEL O16, C35)     

SUPERSTITION IN THE HOUSING MARKET

We provide the first solid evidence that Chinese superstitious beliefs can have significant effects on house prices in a North American market with a large immigrant population. Using real estate data on close to 117,000 house sales, we find that houses with address number ending in “4” are sold at a 2.2% discount and those ending in “8” are sold at a 2.5% premium in comparison to houses with other addresses. These price effects are found either in neighborhoods with a higher than average percentage of Chinese residents, consistent with cultural preferences, or in repeated transactions, consistent with speculative behavior. (JEL D03, R2, Z1)     

PRODUCT DIFFERENTIATION UNDER CONGESTION: HOTELLING WAS RIGHT

We introduce negative network externalities—“congestion costs”—into H. Hotelling's (1929) model of spatial competition with linear transportation costs. For any firm locations on opposite sides of the midpoint, a pure strategy price equilibrium exists and is unique if congestion costs are strong enough relative to transportation costs. We analyze product differentiation and find that Hotelling's Principle of Minimum Differentiation comes closer to holding in the presence of congestion costs. The greater are congestion costs, the less differentiated products can be in (locationally symmetric) equilibrium. In fact, minimum differentiation comes arbitrarily close to holding depending on the magnitude of these costs relative to transportation costs. Intuitively, greater congestion effects stabilize competition at closer quarters, eliminating aggressive pricing equilibria. Thus, negative network externalities can play a significant role in product differentiation. (JEL D21, L15, R12)     

Effectiveness of trade-ins and price discounts: A moderating role of substitutability

This paper investigates the effects of price discounts and trade-ins on the probability of replacement purchase. Based on economic and psychological criteria, the authors propose that the effectiveness of these two promotional tools is contingent on the extent to which the new product can substitute for the old one. Study 1 demonstrated that at a “high” substitutability level, trade-ins were more effective than price discounts. However, this effect was mitigated when the substitutability level decreased. Study 2 showed that at a “low” substitutability level, trade-ins were inferior to the no-promotion condition. Using a different product and a real purchase situation, Study 3 provided more evidence that the effectiveness of trade-ins and price discounts was contingent on the level of substitutability between the product owned and the one that was going to be purchased. Study 3 also provided evidence for the potential mechanism for the observed effects. Theoretical contributions and marketing implications are discussed.     

MONEY AND PRODUCT QUALITY UNDER ASYMMETRIC INFORMATION

This article examines the effects of money on product quality, as well as the price pattern of heterogeneous quality goods, in a search‐theoretical monetary model with divisible money and divisible commodities. We establish the existence and uniqueness/multiplicity of monetary equilibrium in several different cases. The steady‐state equilibrium of our model displays several properties that are absent or distinct from those of previous studies. In particular, we find that under egalitarian bargaining, the Friedman rule cannot achieve socially efficient allocation due to asymmetric information. We find that the price of informed high‐quality goods is higher than the price of uninformed quality goods. We also find that an increase in inflation can improve product quality. (JEL E40)     

The dual nature of materialism. How personality shapes materialistic value orientation

This article presents two empirical studies examining different types of materialism as identified in an analysis of connections between materialism and HEXACO personality traits. Two groups of materialistic subjects and one non-materialistic group were revealed in both studies. In one group, a high level of materialism was accompanied by low levels of honesty-humility, agreeableness, and emotionality and higher levels of extraversion (Peacock type). In the second group, materialism was found alongside lower levels of honesty-humility, agreeableness and extraversion but higher levels of emotionality (Mouse type). “Peacocks” were more prone than “Mice” to look for immediate financial gains and ostentatious consumption, whereas “Mice” were more anxious and insecure in their ambivalent attitudes to money and were more concerned about their financial futures. Despite the similar importance attached to material possessions, the two types of materialism should be considered separately in future research.     

SENTIMENT BIAS AND ASSET PRICES: EVIDENCE FROM SPORTS BETTING MARKETS AND SOCIAL MEDIA

Previous research using attendance‐based proxies for sentiment bias in sports betting markets confirmed the presence of investor sentiment in these markets. We use data from social media (Facebook “Likes”) to proxy for sentiment bias and analyze variation in bookmakers' prices investor sentiment. Based on betting data from seven professional sports leagues in Europe and North America, we find evidence that bookmakers increase prices for bets on teams with relatively more Facebook “Likes,” indicating the presence of price‐insensitive investors with sentiment bias. These price changes do not affect informational efficiency in this market. (JEL L81, G14)     

“It's Just a Likelihood”: Uncertainty as Topic and Resource in Conveying “Positive” Results in an Antenatal Screening Clinic

The recognition of uncertainty as a pivotal issue for the sociology of medicine is longstanding. More recently, the widespread integration of new medical technologies into healthcare has led to a renewed analytic focus on uncertainty. However, there remains little work on the interactional manifestations of uncertainty. This article uses conversation analysis to examine how uncertainty is introduced and used in one specific setting: an antenatal screening clinic in Hong Kong. We focus on women who have received “screen positive” or higher risk results, and reflect on the ways in which uncertainty is an “essential tension” (Mazeland and ten Have 1996) in the activity of conveying these results to them. We conclude that as well as posing potential difficulties for interaction, the uncertainty of test results is also used here as an interactional resource in managing the institutionally defined category of “high risk.”     

TOXIC NEIGHBORS: FORECLOSURES AND SHORT‐SALES SPILLOVER EFFECTS FROM THE CURRENT HOUSING‐MARKET CRASH

Do home foreclosures and short sales equally affect neighbors? On average, no‐default homes sell anytime up to 6 months after sales of foreclosed neighbors suffer a cumulative spillover effect of about 10%. Including the market trend, the total effect increases to 40%. Controlling for foreclosure effects, short sales do not produce additional spillover effects. We apply a modified hedonic model to estimate spillover effects on neighbors, using January 2008 to June 2009 home transactions from one of the most impacted housing markets. Our findings apply to severely “thin” markets and may not be true for stable markets. We show that accurate estimates of spillover effects require correcting for the market trend, two types of time and spatial price interdependence, and the endogenous neighborhood price. (JEL R21, R22, R31, K2)     

Three Types of Memory for Childhood Sexual Abuse: Relationships to Characteristics of Abuse and Psychological Symptoms∗

ABSTRACT

Data from a clinical sample (N?=?88) reporting childhood sexual abuse was compared by types of memory, abuse characteristics, and psychological symptoms. Three types of memory were identified from a questionnaire (“Always” n?=?27 [31%], “Recovered” n?=?41 [46%], and “Both” n?=?20 [23%]). When compared with narrative reports from a subset (n?=?30) of the sample, the lines between “Always,” “Recovered,” and “Both” types of memory were ambiguous. Consistency across reports, however, was 83%. Memories classified as either “Recovered” or “Both” were associated with earlier age-at-onset and more severe psychological symptoms compared to those who “Always” remembered CSA. No significant differences were found between the “Both” and “Recovered” groups.     

Basking in Reflected Glory and Its Limits: Why Adolescents Hang Out With Popular Peers

The goal of this study was to examine whether popularity and likability were related to associating with popular peers in adolescence. Participants were 3,312 adolescents (M age=13.60 years) from 172 classrooms in 32 schools. Four types of peer affiliations of the participants with the popular peers in their classrooms were distinguished: “best friends,”“respected,”“wannabes,” and “unrelated.” Two types of benefits of affiliating with high‐status peers were identified: achieving high status or popularity for oneself and becoming liked by others. The results showed that popularity was associated with being closely affiliated with popular peers, whereas likability was more strongly predicted by a more distant relation with popular peers.     

Orchestrating Concepts: Kitchen Dynamics and Regime Change in Good Housekeeping and Ideal Home, 1922–2002

It has long been recognized that users and consumers actively appropriate new products and technologies and assimilate them into existing regimes and frames of reference. Much less has been written about how these frames evolve or about how processes of integration and appropriation are sustained and transformed. In this article we analyze “the kitchen” not as a place but as an “orchestrating concept.” We subject “orchestrating concept.” We subject representations of the kitchen, as depicted in Good Housekeeping and Ideal Home (two of the foremost home magazines in Britain) from 1922 to 2002, to two types of analysis. We begin by showing how materials, images, and forms of competence “hang together” at different points in time and how kitchen regimes are formed. We then explore ways of characterizing transitions between one kitchen regime and another. The result is an account not simply of the elements of which kitchens are made but of the changing relations between these constitutive ingredients. The article is at heart about the processes and dynamics of regime change. Although we focus on the kitchen throughout, we do so because we believe better understanding of how meta-level orchestrating concepts like “the kitchen” develop is important for conceptualizing the dynamics of ordinary consumption and everyday practice.     

Migrant Assimilation in Europe: A Transnational Family Affair1

The paper advances our empirical and theoretical understanding of migrant assimilation. It does so by focusing on a very particular group of individuals who appear more likely than other migrant types to “go native.” We call these individuals “mixed nationality relationship migrants” (i.e., migrants who have committed to a life outside their home country because of the presence of a foreign partner). The paper argues that the transnational family milieus that emerge from this form of international migration are critical to the assimilation process. Empirical material from 11 in‐depth interviews with female migrants in Britain (Sheffield) and France (Paris) supports our argument. We also suggest that such “extreme” assimilation is more likely within a regional migratory system – like the EU – where the “identity frontiers” crossed in the formation of a transnational family are relatively shallow.