Title: The Bright Side of Having an Enemy
Time: 13:30-14:30, December 18th, 2017
Venue: San Jie Xia, 3rd Teaching Building
Lecturer: Baojun Jiang Ph.D. Associate Professor, Washington University in St. Louis
Conventional wisdom suggests that more intense competition will lower firms’ profits and that a firm will prefer no competition in the market if possible. We consider a market with two quality-differentiated manufacturers selling through independent exclusive retailers. Our analysis shows that a manufacturer and its retailer can actually both become worse off if their competing manufacturer and retailer exit the market. Put differently, more intense competition in the market can be all-win for the manufacturers, the retailers, and the consumers. Interestingly, the high-quality manufacturer can benefit from an increase in its competitor’s quality, even if that increase is costless; in other words, a firm may prefer a strong rather than weak enemy. These results suggest that a manufacturer’s profit may increase when the perceived quality of its competitor’s product increases, e.g., due to favorable product reviews from consumers or third-party rating agencies, and that the manufacturer may have an incentive to help its competitor to improve product quality or to remain in the market.
Presenter Biography: Baojun Jiang is an associate professor of marketing at the Olin Business School at Washington University in St. Louis. He received a B.A. in economics and physics from Grinnell College, an M.S. in physics and an M.S. in electrical engineering from Stanford University, an M.B.A. from the University of Texas at Austin, and an M.S. and Ph.D. in information systems from Carnegie Mellon University. His current research interests include the sharing economy, platform-based business models, channels, innovations, competitive strategy, behavioral economics, and marketing-operations interface. His research has been published in top-tier journals such as Marketing Science, Management Science, Journal of Marketing Research, and Production and Operations Management. He was selected as a 2017 MSI Young Scholar by the Marketing Science Institute, and serves on the Editorial Review Boards of Journal of Marketing Research and Marketing Science.
Title: Competition of Content Acquisition and Distribution under Consumer Multi-Purchase
Time: 15:00-16:00, December 18th, 2017
Venue: San Jie Xia, 3rd Teaching Building
Presented by: Lin Tian
In many markets, such as video streaming or information services, a consumer may purchase multiple competing products or services. The existing theoretical literature typically assumes that each consumer can buy only one product. This paper explicitly models the consumer’s multi-purchase behavior, and examines an upstream content creator’s content creation and selling strategies, and competing downstream content distributors’ acquisition and pricing strategies. We find that in contrast to the case of single-product purchase, competing content distributors under multi-product purchase will reduce their prices and in equilibrium only one distributor will acquire the new content from the content creator. Furthermore, when the content distributors are not highly differentiated (each having a limited amount of unique content), the content creator will reduce new content creation, leading to lower profits for both the content creator and the content distributors. By contrast, when the distributors are already very differentiated with a substantial amount of their unique content, the content creator will increase its content production, leading to higher profits for both the content creator and the content distributors.
Lin Tian is Assistant Professor of Marketing at School of International Business Administration, Shanghai University of Finance and Economics. He received his doctoral degree in Management Science from School of Management, Fudan University. His research has been published in Management Science, Marketing Science and Production and Operations Management. His current research interests include the sharing economy, platform based business model, and the operations and marketing interface.