To challenge the world view or to flow with it? Teaching sustainable development in business schools

This paper explores the fundamental question of what ‘responsibility’ means to different sets of world views adopted implicitly by business students. The exploration adopts the stakeholder theory and three subsets of the Friedman mentality to explain how individuals may value sustainability initiatives. Subsequently, it explores whether it is better to flow with the dominant economic‐driven world view as prescribed by the business school or to challenge it in order to cultivate business students with sustainability‐driven values. The conclusion highlights implications for business and management education, as well as the role of entrepreneurship to promote sustainability values.     

Drivers of customer likelihood to join grocery retail loyalty programs. An analysis of reward programs and loyalty cards

This paper aims to identify which personal features of customers may determine their likelihood to join a grocery retail loyalty program. We consider five aspects: price sensitivity, search for variety, shopping enjoyment, attitude toward loyalty schemes, and one personality trait: privacy concerns. Some of these variables have already been explored in the literature. Where our research breaks new ground is in establishing the difference between profiles of customers attracted by two of the most common types of loyalty programs currently used by grocery retail firms: a reward program and a loyalty card. The two kinds of program evidence differences in how they are managed, and we posit that the drivers of likelihood to take part in each are different. The study was carried out using logistic regression with a sample of 600 clients of a Spanish supermarket chain. Findings show that one particular type of customer is more likely to take part in these schemes: those displaying little shopping enjoyment, who are greatly concerned with privacy, and who show a favorable attitude toward loyalty programs in general. Furthermore, as expected, differences were observed between drivers of participation likelihood in reward programs and loyalty cards.     

Unfolding Social Hierarchies

Consider a large population of finitely-lived agents organized into n different hierarchical levels. Every period, all those placed at each level are randomly matched to play a given symmetric game. Based on the resulting outcome, a ρ-fraction of agents who (within their own level) attain the highest payoffs are promoted upwards. On the other hand, newcomers replacing those who die every period enter at the lowest level and choose irreversibly the strategy to be played for the rest of their life. This choice is made, with some noise, by imitating one of the strategies adopted at the highest level.  In this setup, the unique long-run behavior of the system is fully characterized for the whole class of 2×2 coordination games and two alternative variations of the model. The results crucially depend on the key “institutional” parameters ρ and n. In particular, it is shown that inefficient behavior prevails in the long run (even when risk-dominated) if promotion is only mildly selective—high ρ—and the social system is quite hierarchical—large n. In a stylized manner, these parameter conditions may be viewed as reflecting a sort of institutional deficiency that impairs economic performance. Journal of Economic Literature Classification Numbers: C70, C72, C73, D72.     

Too Popular to Ignore: The Influence of Online Reviews on Purchase Intentions of Search and Experience Products

Consumers assess the credibility of online product reviews to guide their purchase decisions. However, little is known about how consumers determine the credibility of online product reviews. This article examines the effect of the level of detail in a product review and the level of reviewer agreement with it on the credibility of a review and consumers' purchase intentions for search and experience products. Overall, the results indicate that more credible reviews lead to higher purchase intentions. Interestingly, the findings also demonstrate that consumers determine the credibility of a review differently for search and experience products. For search products, consumers deem online reviews to be more credible when the reviews contain detailed information about the product. However, for experience products, consumers determine the credibility of a review by assessing the level of reviewer agreement with a review. The lack of diagnosticity of detailed information in online reviews of experience products is attributed to the idiosyncratic nature of experiences. Implications for research and practice are discussed.     

Externalities, expectations, and growth

Summary. The paper studies a model of accumulation and growth where a continuum of heterogeneous firms play dynamically optimal strategies along a (rational expectations) equilibrium. The key feature of the model is that firms' technological decisions are assumed subject to both friction and external effects. This gives rise to a wide multiplicity of equilibrium behavior, any path of sustained growth requiring that the economy tackle a never-ending chain of fresh coordination problems. This setup is modelled as a (non-atomic) dynamic game, suitable conditions being provided that partially characterize when sustained growth is a possible (never the unique) equilibrium outcome. Received: May 25, 1995; revised version: March 25, 1998     

Existence of steady – state equium in an overlapping-generations model with production

Summary This paper establishes an existence theorem of a non-trivial (positive capital stock) steady-state equilibrium in Diamond's (1965) overlapping-generations model with production by employing the steady-state consumption curve introduced in Ihori (1978). The assumptions on preferences and production technologies that ensure the existence of a nontrivial steadystate equilibrium are separated from each other, unlike in Galor and Ryder (1989). We also provide two simple examples which illustrate the importance of two conditions in the theorem.Detailed comments by Tomoichi Shinotsuka and the referees of the journal were quite helpful. We also thank Marcus Berliant, Mark Bus, John H. Boyd III, Ban Chuan Cheah, Rajat Deb, Jim Dolmas, Oded Galor, Greg Huffman, Toshihiro Ihori, Radhika Lahiri, Lionel McKenzie, Arundhati Sen, and the seminar participants at the Midwest Mathematical Economics Conference in Ann Abor and at University of Rochester. The second author gratefully acknowledges the financial supports from the European Community Human Capital Mobility Program.     

Additional Empirical Evidence on Real Convergence: A Fractionally Integrated Approach

We examine the real convergence hypothesis for 14 OECD countries looking at the fractional order of integration of the differences of real GDP per capita in these countries with respect to the United States. Using parametric procedures, the results vary depending on how we specify the I(0) disturbances. If they are white noise, convergence is achieved for Canada and Australia, and with autocorrelated disturbances, this hypothesis is satisfied for France and the Netherlands. However, allowing for a break at World War II, evidence of convergence is obtained for all countries. JEL no. C32, O41     

An estimation of the pattern of diffusion of mobile phones: The case of Colombia

This paper examines the diffusion pattern of mobile telephony in Colombia. The empirical modelling approach adopted in the paper starts off by choosing between the two functional forms that are most frequently used in the literature, namely the Gompertz and the Logistic models. After applying a formal statistical test to choose the preferred functional form, the evidence suggests that the pattern of diffusion can be best characterised as following a Logistic model. The findings also suggest that despite the fact that in recent years the rate of growth of mobile phone subscribers has started to slow down, there still appears to be room for further expansion as the saturation level is expected to be reached in 2013. The estimated saturation level is consistent with some individuals possessing more than one mobile device.     

Real options with unknown-date events

The real options literature has provided new insights on how to manage irreversible capital investments whose payoffs are uncertain. Two of the most important predictions from such theory are: (i) greater risk delays a firm’s investment timing, and (ii) greater risk increases the option value of waiting. This paper challenges such conclusions in a setting in which the relevant random variable is the arrival time of an unfavorable event. In particular, we model situations in which a firm must choose the time at which to invest in a project whose profit grows at a known rate until a random date is reached and decays thereafter, which may be representative of stochastic product or industry life cycles. This is a novel framework in which a firm can update its beliefs about the profitability of an investment opportunity by simply waiting to invest. Thus, a wait-and-see approach allows the firm to capitalize on favorable market evolutions and avoid adverse ones to some extent. Our framework is simple and does not require using stochastic calculus, which allows for an economic interpretation of optimal investment policies for the cases of one-time and sequential investments.     

Noncentral bimatrix variate generalised beta distributions

In this paper, we determine the density functions of nonsymmetrised doubly noncentral matrix variate beta type I and II distributions. The nonsymmetrised density functions of doubly noncentral and noncentral bimatrix variate generalised beta type I and II distributions are also obtained.