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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

Suggested Citation

  • Avi Goldfarb, 2006. "The medium-term effects of unavailability," Quantitative Marketing and Economics (QME), Springer, vol. 4(2), pages 143-171, June.
  • Handle: RePEc:kap:qmktec:v:4:y:2006:i:2:p:143-171
    DOI: 10.1007/s11129-006-8128-8
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    File URL: http://hdl.handle.net/10.1007/s11129-006-8128-8
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    References listed on IDEAS

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    1. Gandal, Neil, 2001. "The dynamics of competition in the internet search engine market," International Journal of Industrial Organization, Elsevier, vol. 19(7), pages 1103-1117, July.
    2. Train,Kenneth E., 2009. "Discrete Choice Methods with Simulation," Cambridge Books, Cambridge University Press, number 9780521766555, October.
    3. Fitzsimons, Gavan J, 2000. " Consumer Response to Stockouts," Journal of Consumer Research, Oxford University Press, vol. 27(2), pages 249-266, September.
    4. 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 310-327, July.
    5. 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.
    6. Avi Goldfarb, 2006. "State Dependence at Internet Portals," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 15(2), pages 317-352, June.
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    Cited by:

    1. repec:eee:joinma:v:23:y:2009:i:1:p:35-48 is not listed on IDEAS
    2. Alexandar Grubor & Nikola Milićević & Nenad Djokic, 2016. "The Effect of Inventory Level on Product Availability and Sale," Prague Economic Papers, University of Economics, Prague, vol. 2016(2), pages 221-233.
    3. Cleeren, K. & Dekimpe, M.G. & Helsen, K., 2008. "Weathering product-harm crises," Other publications TiSEM 283b51f8-dd35-4a10-930a-8, Tilburg University, School of Economics and Management.
    4. Nikola Milicevic & Aleksandar Grubor, 2015. "The effect of backroom size on retail product availability – operational and technological solutions," The AMFITEATRU ECONOMIC journal, Academy of Economic Studies - Bucharest, Romania, vol. 17(39), pages 661-661, May.
    5. 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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