An Economic Evaluation of Contract Marketing

This paper analyses the efficiency consequences of the introduction of contract marketing. It interprets contracts as a means for extending the use of information and increasing the efficiency of its transmission. It is shown that the present system, based on spot markets, falls short of the ideal in which the marginal value product of informational resources equals their marginal cost, marginal cost being the least technically possible. Contracting reduces this disparity and in so doing improves short and long run resource allocation, accelerates innovation, diminishes overhead costs and enhances the efficiency of obtaining information.


Subject(s):
Issue Date:
1968-12
Publication Type:
Journal Article
PURL Identifier:
http://purl.umn.edu/9208
Published in:
Review of Marketing and Agricultural Economics, Volume 36, Number 04
Page range:
155-164
Total Pages:
10




 Record created 2017-04-01, last modified 2017-12-05

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