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The medium-term effects of unavailability

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  • Avi Goldfarb

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Abstract

This paper develops a new method of identifying why current product unavailability has an effect on future brand choices. If the impact is solely due to changing preferences, then all competitors of the unavailable item gain proportionally to their share; if, however, there is lock-in, then the competitor that is chosen instead of the unavailable product should gain disproportionately more. Denial of service attacks at Yahoo, CNN, and Amazon show that unavailability has a medium-term impact. Lock-in drives 51% of the effect on Yahoo, but it dissipates much more quickly than the effect of changing preferences. Copyright Springer Science + Business Media, LLC 2006

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File URL: http://hdl.handle.net/10.1007/s11129-006-8128-8
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Bibliographic Info

Article provided by Springer in its journal Quantitative Marketing and Economics.

Volume (Year): 4 (2006)
Issue (Month): 2 (June)
Pages: 143-171

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Handle: RePEc:kap:qmktec:v:4:y:2006:i:2:p:143-171

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Web page: http://www.springerlink.com/link.asp?id=111240

Related research

Keywords: Product availability; Stockouts; Internet; Denial of Service; Switching costs;

References

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  1. Avi Goldfarb, 2006. "State Dependence at Internet Portals," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 15(2), pages 317-352, 06.
  2. Neil Gandal, 2001. "The Dynamics of Competition in the Internet Search Engine Market," Microeconomics 0012003, EconWPA.
  3. Train,Kenneth E., 2009. "Discrete Choice Methods with Simulation," Cambridge Books, Cambridge University Press, number 9780521747387.
  4. Abel P. Jeuland, 1979. "The Interaction Effect of Preference and Availability on Brand Switching and Market Share," Management Science, INFORMS, vol. 25(10), pages 953-965, October.
  5. Fitzsimons, Gavan J, 2000. " Consumer Response to Stockouts," Journal of Consumer Research, University of Chicago Press, vol. 27(2), pages 249-66, September.
  6. Keane, Michael P, 1997. "Modeling Heterogeneity and State Dependence in Consumer Choice Behavior," Journal of Business & Economic Statistics, American Statistical Association, vol. 15(3), pages 310-27, July.
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Cited by:
  1. K. Sudhir & Nathan Yang, 2014. "Exploiting the Choice-Consumption Mismatch: A New Approach to Disentangle State Dependence and Heterogeneity," Cowles Foundation Discussion Papers 1941, Cowles Foundation for Research in Economics, Yale University.

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