AN ANALYSIS OF EQUILIBRIUM RELATIONSHIP BETWEEN PRICE ELASTICITY AND EXPENDITURE LEVEL: A CASE STUDY OF KOREAN MOBILE MARKET DATA
0
조회
0
다운로드
0
인용
0
참고문헌
키워드
초록
In most developing countries, telecommunications industry has been grown fast and still has more growth potential than in the developed countries. Clearly the telecommunications industry contributes to foster economic developments and also to narrow the communication gaps among countries. Among many components relating to the success of quick developments of telecommunication services, an appropriate and optimal pricing strategies is the most vital element. In this view point, this paper examines the optimal price discrimination strategy for firms in a monopolistically competitive market. The primary interest is the theoretical relationship between price elasticity and the average expenditure level of consumers. Our equilibrium analysis shows that the relationship can go either way (positive or negative) depending on the prevailing price level of the product in concern. As an empirical example, using a hierarchical Bayes model we find that heavy user of mobile service are substantially more elastic to the price of calls in Korea. A discussion of the optimal pricing scheme and market structure is in order.
Abstract
In most developing countries, telecommunications industry has been grown fast and still has more growth potential than in the developed countries. Clearly the telecommunications industry contributes to foster economic developments and also to narrow the communication gaps among countries. Among many components relating to the success of quick developments of telecommunication services, an appropriate and optimal pricing strategies is the most vital element. In this view point, this paper examines the optimal price discrimination strategy for firms in a monopolistically competitive market. The primary interest is the theoretical relationship between price elasticity and the average expenditure level of consumers. Our equilibrium analysis shows that the relationship can go either way (positive or negative) depending on the prevailing price level of the product in concern. As an empirical example, using a hierarchical Bayes model we find that heavy user of mobile service are substantially more elastic to the price of calls in Korea. A discussion of the optimal pricing scheme and market structure is in order.
참고문헌 (16)
- Ainslie, A., "Similarities in Choice Behavior across Product Categories", Marketing Science, 통권 : 17, pp.92~106 (1998)
- Allenby, G.M, "Reassessing Brand Loyalty,Price Sensitivity,and Merchandising Effects on Consumer Brand Choice", Journal of Business and Economic Statistics, 통권 : 13, pp.281~289 (1995)
- Allenby, G.M, "Marketing Models of Consumer Heterogeneity", Journal of Econometrics,, 통권 : 89, pp.57~78 (1999)
- Bell, D, "Shopping Behavior and Consumer Preference for Store Price Format: Why Large Basket Shoppers Prefer EDLP", Marketing Science, 통권 : 17, pp.66~88 (1998)
- Blanchard, O.J, "Lectures on Macroeconomics" (1989), The MIT Press
- Bolton,R, "The Relationship between Market Characteristics and Promotional Price Elasticities", Marketing Science, 통권 : 8, pp.153~169 (1989)
- Chiang,Jeongwen, "A Simultaneous Approach to Whether,What and How Much to Buy Questions", Marketing Science, 통권 : 10, pp.297~315 (1991)
- Hoch, S., "Determinants of Store-Level Price Elasticity", Journal of Marketing Research, 통권 : 32, pp.17~29 (1995)
- Jain, D, "Pricing Patterns of Cellular Phones and Phones and Phone Calls: A Segment-level Analysis", Management Science, 45(2), pp.131~141 (1999)
- Kim, B-D, "Purchase Frequency,Sample Selection,and Price Sensitivity:The Heavy User Bias", Marketing Letters, 통권 : 5, pp.57~68 (1994)
- Kumar, V., "Measuring the Effect of Retail Store Promotions on Brand and Store Substitution", Journal of Marketing Research, 통권 : 25, pp.178~186 (1988)
- Laffont, J-J, "Network Competition II:Price Discrimination", Rand Journal of Economics, 통권 : 29, pp.38~56 (1998)
- Manchanda, P, "The Shopping Basket:A Model for Multicategory Purchase Incidence Decisions", Marketing Science, 통권 : 18, pp.95~115 (1998)
- Rossi, P, "The Value of Purchase History Data in Target Marketing", Marketing Science, 통권 : 15, pp.321~340 (1996)
- Rossi, P, "Bayesian Statistics and Marketing" (2005), NJ: Wilie.
- Tirole,J, "The Theory of Industrial Organization" (1988), MIT press