No abstract

This paper studies the strategic interaction between firms producing strictly complementary products. With strict complements, a consumer derives positive utility only when both products are used together. We show that value-capture and value-creation problems arise when such products are developed and sold by separate firms ("non-integrated" producers). Although the firms tend to price higher for given quality levels, their provision of quality is so low that in equilibrium prices are set well below what an integrated monopolist would choose. When one firm can mandate a royalty fee from the complementor producer (as often occurs in arrangements between hardware and software makers), we find that the valuecapture problem is mitigated to some extent and consumer surplus rises. However, because royalty fees greatly reduce the incentives of the firm paying them to invest in quality, the arrangement exacerbates the value-creation problem and leads to even lower total quality. Surprisingly, this result can reverse with competition. Specifically, when the firm charging the royalty fee faces a vertically differentiated competitor, the value-creation problem is greatly reduced-opening the door for the possibility of a Pareto improving outcome in which all firms and consumers are better off. Notably, this outcome cannot be achieved by giving firms the option of introducing a line of product variants; competition serves as a necessary "commitment" ingredient.

Purpose Privacy considerations have become a topic with increasing interest from academics, industry leaders and regulators. In response to consumers’ privacy concerns, Google announced in 2020 that Chrome would stop supporting third-party cookies in the near future. At the same time, advertising technology companies are developing alternative solutions for online targeting and consumer privacy controls. This paper aims to explore privacy considerations related to online tracking and targeting methods used for programmatic advertising (i.e. third-party cookies, Privacy Sandbox, Unified ID 2.0) for a variety of stakeholders: consumers, AdTech platforms, advertisers and publishers. Design/methodology/approach This study analyzes the topic of internet user privacy concerns, through a multi-pronged approach: industry conversations to collect information, a comprehensive review of trade publications and extensive empirical analysis. This study uses two methods to collect data on consumer preferences for privacy controls: a survey of a representative sample of US consumers and field data from conversations on web-forums created by tech professionals. Findings The results suggest that there are four main segments in the US internet user population. The first segment, consisting of 26% of internet users, is driven by a strong preference for relevant ads and includes consumers who accept the premises of both Privacy Sandbox and Unified ID (UID) 2.0. The second segment (26%) includes consumers who are ambivalent about both sets of premises. The third segment (34%) is driven by a need for relevant ads and a strong desire to prevent advertisers from aggressively collecting data, with consumers who accept the premises of Privacy Sandbox but reject the premises of UID 2.0. The fourth segment (15% of consumers) rejected both sets of premises about privacy control. Text analysis results suggest that the conversation around UID 2.0 is still nascent. Google Sandbox associations seem nominally positive, with sarcasm being an important factor in the sentiment analysis results. Originality/value The value of this paper lies in its multi-method examination of online privacy concerns in light of the recent regulatory legislation (i.e. General Data Protection Regulation and California Consumer Privacy Act) and changes for third-party cookies in browsers such as Firefox, Safari and Chrome. Two alternatives proposed to replace third-party cookies (Privacy Sandbox and Unified ID 2.0) are in the proposal and prototype stage. The elimination of third-party cookies will affect stakeholders, including different types of players in the AdTech industry and internet users. This paper analyzes how two alternative proposals for privacy control align with the interests of several stakeholders.

Purpose Berthon and Pitt (2018) recently highlighted the symbiotic relationship between fake news and brands. This paper aims to draw on semiotics to refine the fake/real news dichotomy to a fourfold typology. Design/methodology/approach First, the authors turn to semiotics and review Greimas’ (1966) semiotic square. Second, they use this framework to refine the fake/real news dichotomy into a four-fold typology. Third, they illustrate each type with a news report on the topic of climate change. Fourth, they apply this framework to reveal four types of brand: real, fake, empty and ironic. Findings Given that brand communications are heterogeneous, the authors suggest that the typology can be reconceptualized as dimensions and brands communications decoded accordingly. They conclude by exploring further opportunities offered by the semiotic square for interpretive investigation. Originality/value The value of the paper lies in the novel use of the semiotic square to shed light on both news and brand communications.

In the past couple of decades, following the advancements in communication technologies, alternative marketing communications such as consumer generated content, influencer marketing and native advertising, have emerged as a viable and gainful tactic. These alternative marketing communications blur the boundaries between the roles of consumer and marketer. The possibility of duplicity and deception in marketing relationships is fueled by the ambiguity of these roles and the lack of clarity in persuasion knowledge when alternative marketing communications are utilized. In this paper, we illustrate the various types of duplicity in marketing relationships that use alternative marketing communications. We adopt a conceptual framework previously developed in this budding literature stream by Pehlivan et al. (2015), and use it to suggest that the notion of 'unidirectional deception' (i.e. marketer deceives consumer) needs to be updated to 'omni-directional deception' , in order to better explain duplicity in current marketing relationships. We use examples encountered in contemporary marketing practices to derive managerial implications and best practices as well as ethical implications or questionable practices for these types of communications. More importantly, this paper suggests that future research should examine duplicity in marketing by minding the new omni-directional dynamic of marketing relationships.