It's not there,I love it! How relevance to objective needs of an unavailable item impacts emotions,store image,and behavior

We use a simulated online fashion store to investigate how stock-outs with different levels of relevance to objective needs and product preference impact emotions, store image, and number of items bought. We find that stock-outs of most preferred products, that are relevant to consumers’ needs, lead to negative emotions, a lower store image and a discouragement to buy. We also find that stock-outs of most preferred products, that are not relevant to objective needs, lead to positive emotions and a higher store image. Surprisingly, stock-outs of less preferred products, that are relevant to objective needs, encourage consumers to buy more.     

Effort justification for fun activities?: The effect of location-based mobile coupons using games

Based on the effort justification explanation, this study tested whether consumers perceive the value of mobile coupons differently depending on how they received them. A 3 (activities to receive a coupon: none vs. online survey vs. game) x 2 (product type: hedonic vs. utilitarian) between-subject design experiment (N = 200) was conducted. Findings suggested that game condition, compared to others, resulted in a higher perceived coupon value. A significant conditional indirect effect was found such that games enhance positive affect especially when the product type was utilitarian, and enhanced positive affect results in further boosting the perceived coupon value.     

Agency risk control through reprisal

We study agency risk control by venture capital (VC) firms to highlight the importance of VC reprisal ability. The central thesis of this paper is that a VC firm's due diligence effort as an ex ante screening for agency risk is contingent upon its ex post reprisal ability. Applying to the context of emerging markets, we develop a testable hypothesis and empirically test it using data from Singapore market. It is found that foreign VC firms that are relatively weak in reprisal ability spend more effort in due diligence screening compared to local VC firms.     

Opportunities for active stock-out management in online stores: The impact of the stock-out policy on online stock-out reactions

This paper investigates the impact of an online retailer's stock-out policy on consumers’ category purchase and choice decisions. We investigate three different policies: (1) stock-outs are immediately visible and there are no replacement suggestions, (2) stock-outs are only visible after purchase attempts and (3) stock-outs are immediately visible but a replacement item is suggested. Results from an online grocery shopping experiment reveal that the adopted stock-out policy has a significant impact on both decisions. Making stock-outs not immediately visible creates confusion and intensifies the consumer's loss experience, thereby reducing the tendency to buy in the category. Suggesting a replacement item, in contrast, facilitates the substitution decision and slightly reduces the purchase cancellation rate. It also substantially increases the suggested item's choice probability. Yet, this effect disappears when higher-priced - suspicious - items are suggested. Overall, these results indicate that online grocery retailers have an interest in pursuing open and convenience-oriented stock-out policies.     

Corporate Environmental Responsibility and the Cost of Capital: International Evidence

We examine how corporate environmental responsibility (CER) affects the cost of equity capital for manufacturing firms in 30 countries. Using several approaches to estimate firms’ ex ante equity financing costs, we find in regressions that control for firm-level characteristics as well as industry, year, and country effects that the cost of equity capital is lower when firms have higher CER. This finding is robust to addressing endogeneity through instrumental variables, to using alternative specifications and proxies for the cost of equity capital, and to accounting for noise in analyst forecasts. We conclude that investment in CER reduces firms’ equity financing costs worldwide.     

Endogenous firm heterogeneity and the dynamics of trade liberalization

In this paper, we build a dynamic model with endogenous firm-level productivity that involves ex ante identical firms behaving differently in equilibrium. Heterogeneity arises in equilibrium as firms choose different dates to adopt a new technology. We investigate the effects of international trade on technological diffusion and show that trade has a generally positive impact on the equilibrium rate of adoption (and hence on firm-level productivity). In addition, the model can replicate the stylized fact that exporters are larger and more productive than non-exporters. Finally, we show how our model can be used to interpret the emerging empirical evidence on the firm-level productivity effects of CUSFTA.     

A Model of Factors Affecting the Growth of Retailing on the Internet

We propose a model that links factors affecting the growth of retailing on the Internet (the Net). Specifically, we examine the roles of the following factors: product-related (risk, efforts, and information intensity); medium-related (interactivity, variety of channels, logical capability, and underlying communication model); consumer-related (preference for home-based shopping, technical orientation, and access to the Net); firm-related (information intensity and expertise in direct marketing), and environment-related (critical mass of consumers and retailers online). We examine how at each stage of the consumption process, Net-based retailing affects value delivery to consumers. Managerial implications of the model are discussed.     

In search of e-service value: technology-exploitation vs. certainty-seeking online behaviours

The primary aim of this article is to ascertain whether the e-service value formation process changes as a function of consumers' technology readiness (TR). Through a field survey about ‘e-tail’ service value, this study finds that monetary cost is equally important for both high- and low-TR consumers. The positive effects of service-enhancing value components on overall e-service value perception are stronger in the high-TR group than in the low-TR group, whereas the positive effects of risk-reducing value components are greater in the low-TR group than in the high-TR group. High-TR consumers tend to maximise shopping value for themselves through planned online searching and purchasing. Overall, high-TR consumers are able to improve their shopping value through both ex ante and post hoc vehicles. In addition, high-TR consumers exhibit technology-exploitation online behaviours, whereas low-TR consumers exhibit certainty-seeking online behaviours. The article discusses study implications and suggestions for future research from the perspectives of diffusion of innovations, online transaction costs, and relationship marketing.     

Going Native: Effects of Disclosure Position and Language on the Recognition and Evaluation of Online Native Advertising

Despite recent industry attention, questions remain about how native advertising is perceived and processed by consumers. Two experiments examined effects of language and positioning in native advertising disclosures on recognition of the content as advertising, effects of recognition on brand and publisher evaluations, and whether disclosure position affects visual attention. Findings show that middle or bottom positioning and wording using “advertising” or “sponsored” increased advertising recognition compared to other conditions, and ad recognition generally led to more negative evaluations. Visual attention mediated the relationship between disclosure position and advertising recognition. Theoretical, practical, and regulatory implications for disclosures in native advertising are discussed.     

Food for Thought: How Will the Nutrition Labeling of Quick Service Restaurant Menu Items Influence Consumers’ Product Evaluations, Purchase Intentions, and Choices?

Within the context of quick service restaurant meals, three studies (a consumer diary study, web-based experiment, and longitudinal experiment) examine how accurately consumers estimate calorie, fat, and sodium content and explore how objective nutrition information may influence product evaluations, perceptions, and purchase intentions. The results indicate that many consumers have little understanding of the calorie, fat, and sodium levels of many typical quick service meals, and this is especially true for less healthful meals. Consistent with rationale drawn from the expectancy-disconfirmation paradigm, results demonstrate that menu-based nutrition information provision negatively influences consumers’ responses when that information is less favorable than expected. Findings suggest that the relationship between actual and expected nutrition levels drives responses, rather than the disclosure of information per se. Since these relationships can vary both within and between restaurants, results suggest that the effects of mandated nutrition information disclosure may not be uniform across the industry.     

Does Travel Time to Stores Matter? The Role of Merchandise Availability

Retailers generally attract consumers to further locations by offering discounted merchandise. We suggest an alternative strategy is to increase the availability (or certainty) of finding the merchandise at their store (i.e., reduce stock-outs). We conduct three experiments to highlight that consumers view travel time more adversely when there is uncertainty about merchandise availability. We also demonstrate that the negative effects associated with uncertainty around merchandise availability and travel time can be mitigated through the use of in-stock guarantees.     

Forgive me,Father, for I did not give full justification for my sins: How religious consumers justify the acquisition of material wealth

Abstract

This research shows how high religiosity consumers justify the purchase of highly materialistic goods. By drawing on the Justification-Suppression Model (JSM), it is shown that high religiosity consumers favour advertisements that suppress the materialistic aspects of goods and offer adequate justification for the purchase. However, these same consumers dislike advertisements that explicitly focus on the materialistic nature of goods. The results from the research offer insight into how high religiosity consumers are able to acquire material wealth despite a strong aversion to such practices within their doctrine. Implications from this research include a greater understanding of how to advertise to high religiosity consumers, but also how the JSM can be used as a means of minimising cognitive dissonance during purchase decisions.     

Retailers and Consumers: The Pass‐through of Import Price Changes

In this paper, we estimate pass‐through rates of import price changes to retail prices across retailers and consumers for apparel purchases in Germany for the period of 2000–07. We find that high‐price retailers do not pass through changes in the import price. Pass‐through rates for low‐price retailers are 53 per cent within three months. Consequently, pass‐through rates for low‐income households are 58 per cent, significantly larger than those for high‐income households. We then present one possible explanation for these observations in a theoretical model with endogenous vertical product differentiation due to bundling an ex ante homogeneous import goods with services. Following an import price change, retailers who sell a cheaper unbundled product change prices to a greater extent than retailers who sell a higher‐priced bundle of product and service.     

Unpacking the interplay between organisational factors and the economic environment in the creation of consumer vulnerability

ABSTRACT

Access to credit is a key enabler of modern life. Yet many consumers face factors beyond their control which sometimes render them unable to borrow from mainstream lenders. This paper documents how firm-related factors determine lending thresholds and shape who is, or is not, a creditworthy customer. The impact of the 2008 economic recession on lending decisions is explored, an aspect that has been insufficiently discussed even though recessions are cyclical events. Drawing on semiotics and using multiple case studies, the study captures not only the groups that were excluded but also the reasons for exclusion. Empirical support is offered for the notion of vulnerability as a fluid state and the role of the timing of decisions as a source of vulnerability is described.     

On the monetization of mobile apps

Though the mobile app market is substantial and growing fast, most app providers struggle to monetize apps profitably. Monetizing apps is done in two ways: a) selling advertising space within a free version of the app, and b) selling a paid version, termed freemium or in-app purchase strategy. In this paper, we present a framework for monetization of mobile apps, using two central empirical regularities concerning the relationship between users and their mobile apps: a) Sampling: While consumers have some prior knowledge of their fit with the app, they remain uncertain regarding their exact utility until they are using it; and b) Satiation: The utility of using the app may decrease with time. While work on the monetization of digital goods has largely overlooked the role of satiation and the consequent retention issues, we show that in combination with uncertainty, it elucidates the role of the segments of consumers that download the free vs. paid version of the app, and how to balance these two segments so as to monetize mobile apps. We encounter two distinct scenarios: In the first, advertising drives most of the revenues; while in the second, revenues are driven by the paid version of the app. We explain how uncertainty and satiation affect the prevalence of the respective scenarios and impact the share of revenues from the paid vs free version of the app. We also demonstrate that an app provider can profit from offering a free version with ads even if advertisers are not paying for these ads. In other words, the app provider benefits from offering a “damaged good” version of the app that includes ads, even if this version is free to consumers, and the advertisers are not paying for the ads.     

“This Post Is Sponsored”: Effects of Sponsorship Disclosure on Persuasion Knowledge and Electronic Word of Mouth in the Context of Facebook

Social media, such as Facebook, offer brands the opportunity to reach their target audience in a less obtrusive way than traditional media, through sponsored posts. Regulations require marketers to explicitly inform consumers about the commercial nature of these posts. This study addresses the effects of sponsorship disclosures by means of a 2 (no disclosure vs. the sponsorship disclosure ‘Sponsored’) × 2 (source: celebrity endorser vs. brand) experiment. Results suggest that a sponsorship disclosure only influences the use of persuasion knowledge when the post is disseminated by a celebrity. Moreover, a disclosure starts a process in which the recognition of advertising (i.e., the activation of conceptual persuasion knowledge) causes consumers to develop distrusting beliefs about the post (i.e., higher attitudinal persuasion knowledge), and in turn, decreases their intention to engage in electronic word of mouth.     

Evaluating wireless carrier consolidation using semiparametric demand estimation

The US mobile phone service industry has dramatically consolidated over the last two decades. One justification for consolidation is that merged firms can provide consumers with larger coverage areas at lower costs. We estimate the willingness to pay for national coverage to evaluate this justification for past consolidation. As market level quantity data are not publicly available, we devise an econometric procedure that allows us to estimate the willingness to pay using market share ranks collected from the popular online retailer Amazon. Our semiparametric maximum score estimator controls for consumers’ heterogeneous preferences for carriers, handsets and minutes of calling time. We find that national coverage is strongly valued by consumers, providing an efficiency justification for across-market mergers. The methods we propose can estimate demand for other products using data from online retailers where product ranks, but not quantities, are observed.

Trade‐related Job Loss,Wage Insurance and Externalities: An Ex Ante Efficiency Rationale for Wage Insurance

The extension of adjustment assistance to those who have suffered trade‐related job displacement is widely supported on both sides of the economics of globalisation debate. The form that such assistance should take, namely wage insurance, is also the subject of wide agreement. Nevertheless, the formal economic rationales offered for such a policy are varied, including political economy arguments, equity arguments and market failure/ex post efficiency arguments. This note proposes an ex ante efficiency‐based rationale for the provision of adjustment assistance in the specific form of wage insurance. Job displacement imposes pecuniary externalities on displaced workers, which, in a complete markets setting, induce only shifts along the ex ante Pareto‐efficient frontier. However, when markets are incomplete, pecuniary externalities become welfare‐relevant. Without the possibility of diversifying or hedging the risk of pecuniary external diseconomies of job displacement using contingent claims, welfare is reduced ex ante. Wage insurance – whether publicly underwritten, privately underwritten (as in Shiller's (2003 ) ‘livelihood insurance’), or supplied on a mixed public/private basis – completes the market for contingent claims, allowing workers to diversify or hedge the risk of trade‐related pecuniary external diseconomies. By facilitating risk sharing, wage insurance removes an impediment to ex ante Pareto efficiency. Moreover, wage insurance affects not only post‐displacement behaviour by increasing the incentive to reacquire employment quickly, but it also affects pre‐displacement consumption and investment behaviour, in particular, lowering the threshold at which workers will be willing to undertake irreversible investment in industry‐specific skills.     

Motivators and enablers of SCOURing: A study of online piracy in the US and UK

Sharing Copyrighted or Unauthorized Replications (SCOURing) is a common activity among some 80 million online file-swappers. Unfortunately, SCOURing is also an illegal activity. A better understanding of SCOURing could help to mitigate its practice. To that end, results from an empirical study of US and UK consumers suggest SCOURing is explained by motivations (justification, believed pervasiveness by peers, believed risklessness, and experiential reasons) and ability (tech-savviness). If true, then companies' efforts to reduce SCOURing by legal action or trying to educate consumers about the victims of SCOURing may be ineffective.     

The Effects of Native Ads on Consumer Brand Engagement: The Moderating Role of Website Credibility

Abstract

This research examined the effect of native ads on consumer brand engagement – specifically, how source disclosure of ad sponsors affected consumers’ perceived ad deceptiveness as well as their attitude toward the company and the brand. It also explored the moderating role of website credibility. One hundred and ten college students in South Korea participated in the experimental study, which found that high source disclosure of ad sponsors positively affected perceived deceptiveness. The effect of source disclosure on perceived deceptiveness was moderated by website credibility. Perceived deceptiveness negatively affected consumers’ attitude toward the company and the brand. The mediating role of perceived deceptiveness between source disclosure and consumer brand engagement was confirmed only when website credibility was high. The paper discusses the theoretical and practical implications of the findings as well as suggestions for future research in this area.