Table 2 - uploaded by Anja Lambrecht
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We provide a simple model to investigate decisions on vertical integration/separation. The key feature of this model is that more than one input is required for the final products of the local downstream monopolists. Depending on their cost structure, downstream firms' decisions on vertical separation can be both strategic complements and strategic...
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Context 1
... we capture unobserved heterogeneity through latent class, we first compare model spec- ifications with different numbers of segments based on the BIC. Table 2 shows that accounting for unobserved heterogeneity in the effect of delays on adoption significantly improves the esti- mation. The model with two latent classes best reflects unobserved heterogeneity in our data. ...
Context 2
... assumption that our instrument is a random treatment across customers could be violated if customers who likely have higher internet usage rates, such as younger people, were concentrated in states that have a higher number of vacations. Table A-2 This evidence suggests that our vacation days instrument is uncorrelated with unobservables that may influence adoption behavior. There is also similar evidence that public holidays are uncorrelated with the unobservables that may influence adoption behavior. ...
Similar publications
We provide a simple model to investigate decisions on vertical integration/separation. The key feature of this model is that more than one input is required for the final products of the local downstream monopolists. Depending on their cost structure, downstream firms' decisions on vertical separation can be both strategic complements and strategic...
We provide a simple model to investigate decisions on vertical integration/separation. The key feature of this model is that more than one input is required for the final products of the local downstream monopolists. Depending on their cost structure, downstream firms' decisions on vertical separation can be both strategic complements and strategic...
We provide a simple model to investigate decisions on vertical integration/separation. The key feature of this model is that more than one input is required for the final products of the local downstream monopolists. Depending on their cost structure, downstream firms' decisions on vertical separation can be both strategic complements and strategic...
Citations
... A second, smaller group of papers, also models at least two stages, but makes use of available data on each of the shopping stages by incorporating it directly in the estimation (e.g. Franses and Vriens 2004, Lambrecht, Seim, and Tucker 2011, Chintagunta and Lee 2012, Abhishek, Fader, and Hosanagar 2012, De los Santos, Hortaçsu, and Wildenbeest 2012, Honka 2014, Moraga-González, Sándor, and Wildenbeest 2015, Honka, Hortaçsu, and Vitorino 2017. Our paper belongs to the second group of papers. ...
... Hortaçsu and Syverson (2004) study consumer purchase behavior for S&P 500 index funds and Allen, Clark, and Houde (2017) look at consumer behavior when buying mortgages. Lambrecht, Seim, and Tucker (2011) study the adoption of Internet-based customer self-service applications such as online payments in the retail banking sector. Dick (2008) and Wang and Ching (2016) develop aggregate-level, structural models of consumer demand for retail bank services. ...
We investigate the relationship between both advertising content and quantity and several stages of consumers' decision-making, namely, unaided and aided awareness, search (consideration), and purchase. Understanding how the amount and content of advertisements affect consumers' decision-making is crucial for companies to effectively and efficiently use their advertising budgets. Our unique individual-level data contain information on consumers' purchases, consideration and awareness sets, demographic variables, and perceived prices for consumers between 2008 and 2016. We supplement these data with data on advertising quantities for all and advertising content for the main three media channels (TV, Internet, and magazines). We account for the endogeneity of the advertising decision using the regression discontinuity approach suggested by Shapiro (2018). Our results reveal that advertising quantity significantly increases consumer (unaided and aided) awareness, but has no effect on consideration and choice -- a finding consistent with the informative role of advertising. Interestingly, the advertising content that leads to consumers' increased awareness is of non-informational nature implying that the effect on awareness is coming from non-informational content leading to better brand recall. And lastly, our results show no evidence of vulnerable consumers being adversely affected by advertising.
We provide a simple model to investigate decisions on vertical integration/separation. The key feature of this model is that more than one input is required for the final products of the local downstream monopolists. Depending on their cost structure, downstream firms' decisions on vertical separation can be both strategic complements and strategic substitutes. As a result, the equilibrium number of vertically integrated firms depends on the cost structure. When the local downstream monopolists merge, vertical separation tends to appear in equilibrium. When an upstream firm can price discriminate, the downstream firms vertically separate. When the downstream firms compete with each other, vertical integration tends to appear if the degree of product differentiation is lower.
