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Handbook of Research in International Marketing

Edited by Subhash C. Jain

Presenting the challenges and opportunities ahead, the contributors to this volume critically examine the current status and future direction of research in international marketing. The result of a sustained and lively dialogue among contributors from a variety of cultures, this volume gathers their perspectives and many insights on the revitalization of the field.
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Chapter 9: Experimental Economic Approaches to International Marketing Research

Nancy R. Buchan


Nancy R. Buchan INTRODUCTION One possible way of figuring out economic laws . . . is by controlled experiments. . . . Economists [unfortunately] . . . cannot perform the controlled experiments of chemists or biologists because they cannot easily control other important factors. Like astronomers or meteorologists, they generally must be content largely to observe. (From the economics text of Samuelson and Nordhaus, 1985, p. 8, edited out in later editions) Unlike traditional economists, who were hesitant to accept experimentation as a valid methodology, marketers have long understood its value.1 As is evidenced by the recent proliferation of experimental economic work, economists now also recognize that ‘it is indeed possible to generate economic data under controlled conditions, and that by doing so economists are better able to understand existing theories and develop new ones’ (Hey 1991, p. 2). The goal of this chapter is to discuss the unique value experimental economics offers researchers in marketing, and the potential this methodology provides in understanding and developing international marketing theories. Many marketing phenomena are addressed by economic theory: an antique buyer’s decision to take a dealer’s offer rather than leave it, a premium wine-maker holding its high prices constant in a competitive market, an e-commerce auction company learning which features to add to its web site through trial and error, competing firms deciding on timing of market entry, or channel partners deciding to invest in innovation to increase joint profit and how that profit will be distributed. Not surprisingly, many of these issues have been studied...

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