osaka2022_sales
Economics of Sales Strategy | Special Lectures in Economics
販売戦略の経済学 | 経済学特論
1st semester, Wednesdays 5th (16:50-18:20), Online(via Zoom)
Office Hours: by appointment
E-mail: yosuke.yasuda <at> gmail.com
Website: https://sites.google.com/site/yosukeyasuda2/home/lectures/osaka2022_sales
Last Update: June 13, 2022
Announcement | お知らせ
[July 13, 2022] --- This lecture is over. Reports are due on July 31.
[May 25, 2022] --- The class scheduled on June 8 will be moved to June 6, 18:30 - 20:00.
[April 25, 2022] --- There will be no class on May 4. The next one, Lecture 4, will be on May 11.
[April 6, 2022] --- The link for Zoom regular meetings is posted in CLE. If you just want to attend the class without registration (i.e., you don't need a credit), please fill out this form. <= Important!!
Please send me an e-mail [yosuke.yasuda@gmail.com] if you cannot have an access to CLE for some reason.
[Feb 6, 2022] --- The first lecture will be on April 13 (Wed). Lectures will be given in English, but your questions and presentations can be made in Japanese.
Course Objective and Content | 講義概要・目的
We study theoretical research on sales strategies with a primary focus on pricing.
This course is mainly based on students' presentations of selective academic articles.
Learning Goals | 学習目標
To acquire analytical skills on the economics of sales strategy from theoretical perspectives.
To understand how theoretical ideas on sales strategy are applied to real-life business issues such as price discrimination, bundling, advertising, and advance selling.
Requirement / Prerequisite | 履修条件・受講条件
Economics of information at the intermediate undergraduate level.
Grading Policy | 成績評価
Based on your presentation and final report.
Auditing students SHOULD also make presentations but need NOT submit the final report.
You can give a talk in either English or Japanese, but you should prepare SLIDES typed in ENGLISH. (so that everyone can understand the contents)
Your presentation should be about 20 to 30 minutes long. After each talk, we will invite questions and comments from other participants.
You can write the final report in either Japanese or English. The suggested length is 2 - 5 pages. Your report should be either
1) an original research paper/idea on the economics of sales strategy,
2) a referee report on a paper (which is not directly covered in class), or
3) a survey on a specific issue of sales strategy or pricing.
Textbooks | 講義テキスト
There is NO textbook in this course.
Related Books
Borgers, An Introduction to the Theory of Mechanism Design, 2015. Amazon
The relevant parts will be posted in CLE, so you need NOT purchase this book.
<Other Reference Books>
Vohra and Krishnamurthi, Principles of Pricing: An Analytical Approach, 2012. Amazon
Vohra, Prices and Quantities: Fundamentals of Microeconomics, 2020. Amazon
Course Schedule | 講義日程
(Lectures 1 through 4 will be given by the instructor. All the rest consists of students' presentations.)
BASIC THEORY
Lecture 1. Introduction April 13
Lecture 2. Price Discrimination April 20
References
<Survey>
Elmaghraby, W., & Keskinocak, P. (2003). Dynamic pricing in the presence of inventory considerations: Research overview, current practices, and future directions. Management science, 49(10), 1287-1309.
Stole, L. A. (2007). Price discrimination and competition. Handbook of industrial organization, 3, 2221-2299.
Varian, H. R. (1989). Price discrimination. Handbook of industrial organization, 1, 597-654.
<Textbook>
Phlips, L. (1983). The economics of price discrimination. Cambridge University Press.
Shapiro, C., Varian, H. R., & Carl, S. (1998). Information rules: A strategic guide to the network economy. Harvard Business Press.
Tirole, J. (1988). The theory of industrial organization. MIT press.
Lecture 3. Auction April 27
References
Bulow, J., & Roberts, J. (1989). The simple economics of optimal auctions. Journal of political economy, 97(5), 1060-1090.
McMillan, J. (1994). Selling spectrum rights. Journal of Economic Perspectives, 8(3), 145-162.
McAfee, R. P., & McMillan, J. (1996). Analyzing the airwaves auction. Journal of Economic perspectives, 10(1), 159-175.
McAfee, R. P., & McMillan, J. (1992). Bidding rings. The American Economic Review, 579-599.
Milgrom, P. R., & Weber, R. J. (1982). A theory of auctions and competitive bidding. Econometrica: Journal of the Econometric Society, 1089-1122.
Newbery, D. M. (1998). Competition, contracts, and entry in the electricity spot market. The RAND Journal of Economics, 726-749.
Rothkopf, M. H., Teisberg, T. J., & Kahn, E. P. (1990). Why are Vickrey auctions rare?. Journal of Political Economy, 98(1), 94-109.
Thaler, R. H. (1988). Anomalies: The winner's curse. Journal of economic perspectives, 2(1), 191-202.
<Survey>
Bajari, P., & Hortaçsu, A. (2004). Economic insights from internet auctions. Journal of Economic Literature, 42(2), 457-486.
Klemperer, P. (1999). Auction theory: A guide to the literature. Journal of economic surveys, 13(3), 227-286.
McAfee, R. P., & McMillan, J. (1987). Auctions and bidding. Journal of economic literature, 25(2), 699-738.
Milgrom, P. (1989). Auctions and bidding: A primer. Journal of economic perspectives, 3(3), 3-22.
<Textbook>
Krishna, V. (2009). Auction theory, 2nd. Academic Press. Amazon
Milgrom, P., & Milgrom, P. R. (2004). Putting auction theory to work. Cambridge University Press. Amazon
Lecture 4. Mechanism Design May 11
References
Ausubel, L. M. (2004). An efficient ascending-bid auction for multiple objects. American Economic Review, 94(5), 1452-1475.
Bulow, J., & Klemperer, P. (1996). Auctions Versus Negotiations. The American Economic Review, 86(1), 180-194.
Bajari, P., McMillan, R., & Tadelis, S. (2009). Auctions versus negotiations in procurement: an empirical analysis. The Journal of Law, Economics, & Organization, 25(2), 372-399.
Che, Y. K. (1993). Design competition through multidimensional auctions. The RAND Journal of Economics, 668-680.
Branco, F. (1997). The design of multidimensional auctions. The RAND Journal of Economics, 63-81.
Che, Y. K., & Gale, I. (2003). Optimal design of research contests. American Economic Review, 93(3), 646-671.
Lucking-Reiley, D. (1999). Using field experiments to test equivalence between auction formats: Magic on the Internet. American Economic Review, 89(5), 1063-1080.
McAfee, R. P. (1993). Mechanism design by competing sellers. Econometrica: Journal of the econometric society, 1281-1312.
Myerson, R. B. (1981). Optimal auction design. Mathematics of operations research, 6(1), 58-73.
Myerson, R. B., & Satterthwaite, M. A. (1983). Efficient mechanisms for bilateral trading. Journal of economic theory, 29(2), 265-281.
Riley, J. G., & Samuelson, W. F. (1981). Optimal auctions. The American Economic Review, 71(3), 381-392.
<Textbook>
Vohra, R. V. (2011). Mechanism design: a linear programming approach (Vol. 47). Cambridge University Press. Amazon
The following lectures are based on students' presentations.
For each "TBA" slot, you can choose a paper from the references (or you could pick some other related paper if you wish). In any case, please send me an email and let me know which paper/slot you would like to present.
MONOPOLY
Lecture 5. Information May 18
Presentation
Lewis, T. R., & Sappington, D. E. (1994) --- Yunzhi LIU
Johnson (2013) --- Ruihan WANG
References
Ellison, G., & Ellison, S. F. (2009). Search, obfuscation, and price elasticities on the internet. Econometrica, 77(2), 427-452.
Fay, S., & Xie, J. (2008). Probabilistic goods: A creative way of selling products and services. Marketing Science, 27(4), 674-690.
Lewis, T. R., & Sappington, D. E. (1994). Supplying information to facilitate price discrimination. International Economic Review, 309-327.
Johnson, J. P. (2013). Targeted advertising and advertising avoidance. The RAND Journal of Economics, 44(1), 128-144.
Johnson, J. P., & Myatt, D. P. (2006). On the simple economics of advertising, marketing, and product design. American Economic Review, 96(3), 756-784.
Kamenica, E., & Gentzkow, M. (2011). Bayesian persuasion. American Economic Review, 101(6), 2590-2615.
Chen, Y., & Xie, J. (2008). Online consumer review: Word-of-mouth as a new element of marketing communication mix. Management science, 54(3), 477-491.
<Survey>
Bagwell, K. (2007). The economic analysis of advertising. Handbook of industrial organization, 3, 1701-1844.
Evans, D. S. (2009). The online advertising industry: Economics, evolution, and privacy. Journal of economic perspectives, 23(3), 37-60.
Kamenica, E. (2019). Bayesian persuasion and information design. Annual Review of Economics, 11, 249-272.
Lecture 6. Market and Resale May 25
Presentation
Che, Gale, & Kim (2013) --- Kohei IZUMI
Cui, Duenyas, & Şahin (2014) --- Jing JING
References
Bukhchandani, S., & Huang, C. F. (1989). Auctions with resale markets: An exploratory model of treasury bill markets. The Review of Financial Studies, 2(3), 311-339.
Cui, Y., Duenyas, I., & Şahin, Ö. (2014). Should event organizers prevent resale of tickets?. Management Science, 60(9), 2160-2179.
Che, Y. K., Gale, I., & Kim, J. (2013). Assigning resources to budget-constrained agents. Review of Economic Studies, 80(1), 73-107.
Dworczak, P., Kominers, S. D., & Akbarpour, M. (2021). Redistribution through markets. Econometrica, 89(4), 1665-1698.
Jullien, B., & Rey, P. (2007). Resale price maintenance and collusion. The RAND Journal of Economics, 38(4), 983-1001.
Mathewson, F., & Winter, R. (1998). The law and economics of resale price maintenance. Review of industrial organization, 57-84.
Leslie, P., & Sorensen, A. (2014). Resale and rent-seeking: An application to ticket markets. Review of Economic Studies, 81(1), 266-300.
Lecture 7. Advance Selling June 1
Presentation
Xie & Shugan (2001) --- Ganzorig ZOLZAYA
Fay & Xie (2010) --- He WANG
References
Fay, S., & Xie, J. (2010). The economics of buyer uncertainty: Advance selling vs. probabilistic selling. Marketing Science, 29(6), 1040-1057.
Lim, W. S., & Tang, C. S. (2013). Advance selling in the presence of speculators and forward‐looking consumers. Production and Operations Management, 22(3), 571-587.
Möller, M., & Watanabe, M. (2010). Advance purchase discounts versus clearance sales. The Economic Journal, 120(547), 1125-1148.
Möller, M., & Watanabe, M. (2016). Competition in the presence of individual demand uncertainty. The RAND Journal of Economics, 47(2), 273-292.
Nasiry, J., & Popescu, I. (2012). Advance selling when consumers regret. Management Science, 58(6), 1160-1177.
Prasad, A., Stecke, K. E., & Zhao, X. (2011). Advance selling by a newsvendor retailer. Production and Operations Management, 20(1), 129-142.
Shugan, S. M., & Xie, J. (2005). Advance-selling as a competitive marketing tool. International Journal of Research in Marketing, 22(3), 351-373.
Xie, J., & Shugan, S. M. (2001). Electronic tickets, smart cards, and online prepayments: When and how to advance sell. Marketing Science, 20(3), 219-243.
<Survey>
Xie, J., & Shugan, S. M. (2009). Advance selling theory. In Handbook of pricing research in marketing. Edward Elgar Publishing.
Lecture 8. Boundedly Rational Consumers June 6 (18:30- 20:00)
Presentation
Ellison (2005) --- Yuichi OKADA
Sandroni & Squintani (2007) --- Qingyang LI
References
Chioveanu, I., & Zhou, J. (2013). Price competition with consumer confusion. Management Science, 59(11), 2450-2469.
Ellison, G. (2005). A model of add-on pricing. The Quarterly Journal of Economics, 120(2), 585-637.
Ellison, G., & Wolitzky, A. (2012). A search cost model of obfuscation. The RAND Journal of Economics, 43(3), 417-441.
Eliaz, K., & Spiegler, R. (2006). Contracting with diversely naive agents. The Review of Economic Studies, 73(3), 689-714.
Heidhues, P., Kőszegi, B., & Murooka, T. (2016). Exploitative innovation. American Economic Journal: Microeconomics, 8(1), 1-23.
Sandroni, A., & Squintani, F. (2007). Overconfidence, insurance, and paternalism. American Economic Review, 97(5), 1994-2004.
Spiegler, R. (2006). Competition over agents with boundedly rational expectations. Theoretical Economics, 1(2), 207-231.
<Survey>
Armstrong, M., & Vickers, J. (2012). Consumer protection and contingent charges. Journal of Economic Literature, 50(2), 477-93.
Ellison, G. (2006). Bounded rationality in industrial organization. Econometric Society Monographs, 42, 142.
Heidhues, P., & Kőszegi, B. (2018). Behavioral industrial organization. Handbook of Behavioral Economics: Applications and Foundations 1, 1, 517-612.
Koszegi, B. (2014). Behavioral contract theory. Journal of Economic Literature, 52(4), 1075-1118.
Spiegler, R. (2016). Choice complexity and market competition. Annual Review of Economics, 8, 1-25.
<Textbook>
Spiegler, Bounded Rationality and Industrial Organization, 2011. Amazon
COMPETITON
Lecture 9. Ad Auction -- Theory June 15
Presentation
Varian (2007) --- Kohei IZUMI
Varian & Harris (2014) --- Ruihan WANG
References
Athey, S., & Ellison, G. (2011). Position auctions with consumer search. The Quarterly Journal of Economics, 126(3), 1213-1270.
Chen, Y., & He, C. (2011). Paid placement: Advertising and search on the internet. The Economic Journal, 121(556), F309-F328.
Edelman, B., Ostrovsky, M., & Schwarz, M. (2007). Internet advertising and the generalized second-price auction: Selling billions of dollars worth of keywords. American economic review, 97(1), 242-259.
Varian, H. R. (2007). Position auctions. international Journal of industrial Organization, 25(6), 1163-1178.
Varian, H. R., & Harris, C. (2014). The VCG auction in theory and practice. American Economic Review, 104(5), 442-45.
<Survey>
Goldfarb, A., & Tucker, C. (2019). Digital economics. Journal of Economic Literature, 57(1), 3-43.
Lecture 10. Ad Auction -- Applications June 22
Presentation
Blake, T., Nosko, C., & Tadelis, S. (2015) --- Jing JING
Decarolis, Goldmanis, & Penta, A. (2020) --- He WANG
References
Blake, T., Nosko, C., & Tadelis, S. (2015). Consumer heterogeneity and paid search effectiveness: A large‐scale field experiment. Econometrica, 83(1), 155-174.
Brown, J., Hossain, T., & Morgan, J. (2010). Shrouded attributes and information suppression: Evidence from the field. The Quarterly Journal of Economics, 125(2), 859-876.
Decarolis, F., Goldmanis, M., & Penta, A. (2020). Marketing agencies and collusive bidding in online ad auctions. Management Science, 66(10), 4433-4454.
Ghose, A., & Yang, S. (2009). An empirical analysis of search engine advertising: Sponsored search in electronic markets. Management science, 55(10), 1605-1622.
Yang, S., & Ghose, A. (2010). Analyzing the relationship between organic and sponsored search advertising: Positive, negative, or zero interdependence?. Marketing science, 29(4), 602-623.
Lecture 11. Mixed Oligopoly
Presentation
Matsumura (1998) --- Yun YANG June 29
References
Bárcena-Ruiz, J. C., & Garzón, M. B. (2006). Mixed oligopoly and environmental policy. Spanish Economic Review, 8(2), 139-160.
Casadesus-Masanell, R., & Ghemawat, P. (2006). Dynamic mixed duopoly: A model motivated by Linux vs. Windows. Management Science, 52(7), 1072-1084.
Chen, T. L. (2017). Privatization and efficiency: a mixed oligopoly approach. Journal of Economics, 120(3), 251-268.
Ishibashi, I., & Matsumura, T. (2006). R&D competition between public and private sectors. European Economic Review, 50(6), 1347-1366.
Matsumura, T. (1998). Partial privatization in mixed duopoly. Journal of Public Economics, 70(3), 473-483.
Matsumura, T., & Ogawa, A. (2012). Price versus quantity in a mixed duopoly. Economics Letters, 116(2), 174-177.
<Survey>
De Fraja, G., & Delbono, F. (1990). Game theoretic models of mixed oligopoly. Journal of Economic Surveys, 4(1), 1-17.
Lectures 12. Applications
Presentation
Capponi, Corrocher, & Zirulia (2021) --- Ganzorig ZOLZAYA June 29
References
Capponi, G., Corrocher, N., & Zirulia, L. (2021). Personalized pricing for customer retention: Theory and evidence from mobile communication. Telecommunications Policy, 45(1), 102069.
TWO-SIDED MARKET
Lectures 13. Two-sided Market July 6
Presentation
Rochet & Tirole (2003) --- Yunzhi LIU
Armstrong & Wright (2007) --- Qingyang LI
References
Armstrong, M. (2006). Competition in two‐sided markets. The RAND journal of economics, 37(3), 668-691.
Armstrong, M., & Wright, J. (2007). Two-sided markets, competitive bottlenecks and exclusive contracts. Economic Theory, 32(2), 353-380.
Caillaud, B., & Jullien, B. (2003). Chicken & egg: Competition among intermediation service providers. RAND journal of Economics, 309-328.
Hagiu, A. (2006). Pricing and commitment by two‐sided platforms. The RAND Journal of Economics, 37(3), 720-737.
Hagiu, A. (2009). Two‐sided platforms: Product variety and pricing structures. Journal of Economics & Management Strategy, 18(4), 1011-1043.
Rochet, J. C., & Tirole, J. (2003). Platform competition in two-sided markets. Journal of the european economic association, 1(4), 990-1029.
Rochet, J. C., & Tirole, J. (2006). Two‐sided markets: a progress report. The RAND journal of economics, 37(3), 645-667.
Rysman, M. (2009). The economics of two-sided markets. Journal of economic perspectives, 23(3), 125-43.
Wright, J. (2004). One-sided logic in two-sided markets. Review of Network Economics, 3(1).
<Textbook>
Belleflamme, P., & Peitz, M. (2021). The Economics of Platforms. Cambridge University Press. Amazon
Lectures 14. Advanced Topics July 13
Presentation
Parker & Van Alstyne (2018) --- Yuichi OKADA
Choi (2010) --- Yun YANG
References
Choi, J. P. (2010). Tying in two‐sided markets with multi‐homing. The Journal of Industrial Economics, 58(3), 607-626.
Economides, N., & Tåg, J. (2012). Network neutrality on the Internet: A two-sided market analysis. Information Economics and Policy, 24(2), 91-104.
Hagiu, A., & Wright, J. (2015). Multi-sided platforms. International Journal of Industrial Organization, 43, 162-174.
McIntyre, D. P., & Srinivasan, A. (2017). Networks, platforms, and strategy: Emerging views and next steps. Strategic management journal, 38(1), 141-160.
Parker, G., & Van Alstyne, M. (2018). Innovation, openness, and platform control. Management Science, 64(7), 3015-3032.
Weyl, E. G. (2010). A price theory of multi-sided platforms. American Economic Review, 100(4), 1642-72.
OTHER POTENTIAL TOPICS
Lectures X-1. Empirical Studies of Two-sided Market
References
Capponi, G., Corrocher, N., & Zirulia, L. (2021). Personalized pricing for customer retention: Theory and evidence from mobile communication. Telecommunications Policy, 45(1), 102069.
Gawer, A., & Henderson, R. (2007). Platform owner entry and innovation in complementary markets: Evidence from Intel. Journal of Economics & Management Strategy, 16(1), 1-34.
Kaiser, U., & Wright, J. (2006). Price structure in two-sided markets: Evidence from the magazine industry. International Journal of Industrial Organization, 24(1), 1-28.
Rysman, M. (2004). Competition between networks: A study of the market for yellow pages. The Review of Economic Studies, 71(2), 483-512.
Seamans, R., & Zhu, F. (2014). Responses to entry in multi-sided markets: The impact of Craigslist on local newspapers. Management Science, 60(2), 476-493.
Wilbur, K. C. (2008). A two-sided, empirical model of television advertising and viewing markets. Marketing science, 27(3), 356-378.
Lecture X-2. BDM Mechanism
References
Becker, G. M., DeGroot, M. H., & Marschak, J. (1964). Measuring utility by a single‐response sequential method. Behavioral Science, 9(3), 226-232.
Bohm, P., Lindén, J., & Sonnegård, J. (1997). Eliciting reservation prices: Becker–DeGroot–Marschak mechanisms vs. markets. The Economic Journal, 107(443), 1079-1089.
Noussair, C., Robin, S., & Ruffieux, B. (2004). Revealing consumers' willingness-to-pay: A comparison of the BDM mechanism and the Vickrey auction. Journal of economic psychology, 25(6), 725-741.
Miller, K. M., Hofstetter, R., Krohmer, H., & Zhang, Z. J. (2011). How should consumers’ willingness to pay be measured? An empirical comparison of state-of-the-art approaches. Journal of marketing research, 48(1), 172-184.
Horowitz, J. K. (2006). The Becker-DeGroot-Marschak mechanism is not necessarily incentive compatible, even for non-random goods. Economics Letters, 93(1), 6-11.
Lecture X-3. Coase Conjecture
References
Gul, F., Sonnenschein, H., & Wilson, R. (1986). Foundations of dynamic monopoly and the Coase conjecture. Journal of Economic Theory, 39(1), 155-190.
Board, S., & Pycia, M. (2014). Outside options and the failure of the Coase conjecture. American Economic Review, 104(2), 656-71.
McAfee, R. P., & Wiseman, T. (2008). Capacity choice counters the Coase conjecture. The Review of Economic Studies, 75(1), 317-331.
Mason, R. (2000). Network externalities and the Coase conjecture. European Economic Review, 44(10), 1981-1992.
Murfin, J., & Pratt, R. (2019). Who finances durable goods and why it matters: Captive finance and the Coase conjecture. The Journal of Finance, 74(2), 755-793.
Thépot, J. (1998). A direct proof of the Coase conjecture. Journal of Mathematical Economics, 29(1), 57-66.
Lecture X-4. Lock-in
References
Farrell, J., & Klemperer, P. (2007). Coordination and lock-in: Competition with switching costs and network effects. Handbook of industrial organization, 3, 1967-2072.
Lecture X-5. Bundling
References
TBA
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References | 参考文献
TBA