How important are economies of scale and scope in advertising agency operations? This paper reports an econometric study undertaken to address this question. Cost models are formulated which represent how the principal component of agency costs, employment level, varies according to the mix of...

We investigate the theoretical possibility and empirical regularity of two troublesome anomalies that frequently arise when cross-price elasticities are estimated for a set of brands expected to be substitutes. These anomalies are the occurrence of: (a) negatively signed cross-elasticities; and...

This paper addresses a longstanding puzzle involving the unbundling of services that has occurred over more than two decades in the U.S. advertising agency industry: How can the shift from the bundling to the unbundling of services be explained and what accounts for the slow pace of change?...

We assess substitutable and complementary relationships among eight national advertising media classes, as well as the magnitude of their own-price elasticities. We use a translog demand model, whose parameters we estimate by three-stage least squares, based on 1960-94 annual U.S. data.We find...

We assess size and scope-related economies in the global advertising and marketing services business. A translog cost function is employed wherein a firm's costs vary according to its scale and two dimensions of the scope of its operations. Parameters of the model are estimated via three stage...

What accounts for the diversity and limited concentration that has long characterized the organization of the advertising agency industry? This question is addressed by treating an advertising agency as a multiproduct firm. The firm's product line or service mix is defined in terms of the set of...

The two components of the advertising industry – the creative sector that develops and produces messages, and the communications sector that transmits messages via various media – have each been greatly affected by advances in creative design and communications technologies. As the media...

The pricing of medical products and services in the U.S. is notoriously complex. In health care, supply prices (those received by the manufacturer) are distinct from demand prices (those paid by the patient) due to health insurance. The insurer, in designing the benefit, decides what prices...

In this survey chapter on pricing and reimbursement in U.S. pharmaceutical markets, we first provide background information on important federal legislation, institutional details regarding distribution channel logistics, definitions of alternative price measures, related historical...

This paper reports on results obtained from the estimation of a rail cost function using a pooled-time series, cross section of Class I railroads for the period 1974-1986. An analysis is performed of short-run and long-run returns to scale, the extent of capital disequilibrium, and adjustments...