Would you rather pay $10 and have free shipping or pay $5 and pay $6 for shipping? Answer: you prefer the latter. Well, at least if you are like most bidders on eBay.
Morgan and co-author Tanjim Hossain, an assistant professor at Hong
Kong University of Science and Technology, held 80 auctions of new
music CDs and Xbox video games to test how consumers respond to
different price schemes. In the eBay study, they varied the opening bid
price and shipping charges on identical CDs, ranging from Britney
Spears to Nirvana, and video games, including Halo and NBA 2K2.…A
perfectly informed and fully rational consumer will merely add together
the two parts of a price to obtain the total out-of-pocket price for an
item and then decide whether to buy and how much to bid based on this
total price.But that’s not what happened
in their eBay auctions. Instead, they found that lowering the opening
bid price while raising shipping charges attracts earlier and more
bidders and ultimately leads to higher revenues compared with doing the
reverse. Those findings suggest consumers pay less attention or even
completely overlook shipping costs when making bids…The quote is from a writeup, the full paper is
…Plus Shipping and Handling: Revenue (Non) Equivalence in Field Experiments on eBay (subs required).Also check out the interesting data on online pricing at Nash-equilibrium.com.
More on General Motors
Robert Farago takes a look at GM’s supplier situation in his latest “Deathwatch” editorial:
A couple of days ago, I was talking to an auto industry analyst about the world’s largest automaker. We were discussing the cracks in GM’s hull, trying to figure out which of The General’s compartments were already breached, which are filling with water and which remain viable. A wistful tone in the analyst’s voice indicated head-shaking dismay. “I’m no longer hearing anything positive about GM,” he revealed. “The conversations range from how bad it is, to how bad it’s going to get.” I didn’t want to sound like a paranoid fantasist to a new source, so I tried not to out-pessimist the doomsayers. But it wasn’t easy.
GM operates a large SUV assembly plant in nearby Janesville, WI
Popup Stores
Much has been written about pop-up stores and they are usually placed in the context of being something of a fad or fashion in retail. However, even if it is hidden, there is a powerful idea behind most of these initiatives and that’s to provide “brand refreshment” and “brand excitement”.
The temporary and unique nature of these stores gives people a reason to visit and take note. Influx believes the idea inherent in the pop-up is one of temporary surprise (great in an A.D.D. world) and that can be very impactful as a communication tool, especially as it’s a three-dimensional experience.
An Interview with Errol Morris
Megan Cunningham interviews UW Grad and noted film and advertising impresario Errol Morris [pdf]:
Within the entertainment industry, Errol Morris holds a chameleon position. To the commercial production world, he’s established as a highly successful director, both innovative and intelligent. (He’s one of the only, if not the only, director of TV commercials who has written an opinion-page article published in The New York Times.) Within talent and advertising agencies, he is known for his exceptional off-kilter vision, and honored in ways usually reserved for noncommercial artists. (In November 1999, his work received a full retrospective at the Museum of Modern Art. In 2002, the organizers of the Academy Awards asked him to direct the short film that introduced the annual Oscars ceremony; it featured a series of real-life characters—some well-known, some everyday citizens—describing their passion for
movies.) In a 2004 Adweek article honoring Morris’s contributions as someone who “rises above the fray to create work that resonates and inspires,”Local Primary & The Tunnel
Wow, what a disturbingly sad turnout. This is what democracy looks like?
Meanwhile, I watched “The Tunnel” last night, which is must see for anyone living in a free society. Well done, with a few Hollywood additions apparently.
BMW’s Turbo Steam Fuel Saving Concept
MW engineers are working on a steam-powered auxiliary drive system that reduces fuel consumption by up to 15 per cent and boosts performance at the same time, the car maker said.
The ‘Turbosteamer’ concept applied to a 1.8 litre, four-cylinder petrol engine recycles the waste heat in the exhaust gases and cooling system.
In tests, the Turbosteamer produced 13 additional hp in performance with 80 per cent of the energy in the exhaust gases recycled, according to the manufacturer.
Milwaukee Ranked #7 in Overextended Sports Markets
The study by American City Business Journals, parent of the The Business Journal Serving Greater Milwaukee, looked at 179 U.S. markets and analyzed the amount of personal income each region generates, among other factors, to measure the region’s adequacy for its current professional teams and any possible new ones in baseball, football, basketball, hockey and soccer.
Milwaukee’s total personal income of $75.7 billion, according to the report, is insufficient to support the addition of any more professional teams.
Political Observations From Michael Powell
via David Isenberg:
The Washington DC political process is more broken now than at any other time I’ve seen in my life. It has collapsed in on itself. I went home and asked my father [Colin Powell] if I was missing something, and he agreed with me that the process has collapsed into pure partisanship. The power of the incumbency has grown. People are not concerned with what’s right or what’s in the nations interest, they are purely interested in killing their opponents.
Powerbook Tattoos
Too Funny…. Laser Powerbook Tattoos. via Virginia Postrel
Wisconsin VC Investment
Wisconsin’s Venture Capital investments increased from $38M in 2003 to 68M in 2005, roughly 1/4 that of Minnesota and Illinois.