Dynamic and Competitive Effects of Direct Mailings
AbstractWe propose a dynamic direct mailing response model with competitive effects, where purchase and promotion history are incorporated. We then map the dynamic competitive interactions amongst the firms sending the mailings. We investigate the short- and long-run impact of a direct mailing on the revenues of the firm sending the mailing and on the revenues of its competitors. The model accounts for unobserved heterogeneity across households. We estimate the model in the charitable giving setting, as sending direct mailings represents a large part of charitable fundraising activity. Households often receive direct mailings of different charities within a short period of time and competition is highly relevant. We construct a unique database by merging the databases of three large charity organizations in the Netherlands. This results in household level data on the direct mailings received and the donations made by each household to each charity. Our results show that charitable direct mailings are short-run complements, that is, the direct mailings tend to increase the total pie that is divided among the charities. At the same time, the charitable direct mailings are long-run substitutes. In the long run they fight for a piece of the pie that households have available for charitable giving.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by Erasmus Research Institute of Management (ERIM), ERIM is the joint research institute of the Rotterdam School of Management, Erasmus University and the Erasmus School of Economics (ESE) at Erasmus University Rotterdam. in its series Research Paper with number ERS-2006-050-MKT.
Date of creation: 07 Sep 2006
Date of revision:
Contact details of provider:
Web page: http://www.erim.eur.nl/
Competition; Dynamics; Direct Mailings;
This paper has been announced in the following NEP Reports:
You can help add them by filling out this form.
CitEc Project, subscribe to its RSS feed for this item.
- Ugur, Z.B., 2013. "From headscarves to donation: Three essays on the economics of gender, health and happiness," Open Access publications from Tilburg University urn:nbn:nl:ui:12-5927864, Tilburg University.
- Aldashev, Gani & Verdier, Thierry, 2010. "Goodwill bazaar: NGO competition and giving to development," Journal of Development Economics, Elsevier, vol. 91(1), pages 48-63, January.
- Glady, N. & Lemmens, A. & Croux, C., 2010. "Modeling Within- and Across-Customer Association in Lifetime Value with Copulas," Discussion Paper 2010-103, Tilburg University, Center for Economic Research.
- Meer, Jonathan & Rosen, Harvey S., 2011.
"The ABCs of charitable solicitation,"
Journal of Public Economics,
Elsevier, vol. 95(5), pages 363-371.
- Diepen, M. van & Donkers, A.C.D. & Franses, Ph.H.B.F., 2008. "Does Irritation Induced by Charitable Direct Mailings Reduce Donations?," Research Paper ERS-2008-036-MKT, Erasmus Research Institute of Management (ERIM), ERIM is the joint research institute of the Rotterdam School of Management, Erasmus University and the Erasmus School of Economics (ESE) at Erasmus Uni.
- Durango-Cohen, Elizabeth J., 2013. "Modeling contribution behavior in fundraising: Segmentation analysis for a public broadcasting station," European Journal of Operational Research, Elsevier, vol. 227(3), pages 538-551.
- Seger, R. & Franses, Ph.H.B.F., 2007. "Panel design effects on response rates and response quality," Econometric Institute Report EI 2007-29, Erasmus University Rotterdam, Econometric Institute.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (ERIM Series Handler at the ERIM Office).
If references are entirely missing, you can add them using this form.