Incorporating Behavioral Anomalies in Strategic Models

Behavioral decision researchers have documented a number of anomalies that seem to run counter to established theories of consumer behavior from microeconomics that are often at the core of analytical models in marketing. A natural question therefore is how equilibrium behavior and strategies would change if models were to incorporate these anomalies in a consistent way. In this paper we identify several important and generalizable anomalies that modelers may want to incorporate in their models. We briefly discuss each phenomenon, identify a key unresolved issue and outline a research agenda to be pursued.     

The evolution of backpacker destinations: the case of Zipolite,Mexico

Despite the growing literature on backpacker tourism, little is known about the evolutionary patterns of the places that cater to such travellers. This paper analyses, first, the way in which established and current models of tourist development conceptualise backpackers and their destinations. In addition, it offers some specific suggestions that will allow them to explain the evolution of backpacker destinations in a more detailed manner. Then, results of field research conducted at Mexico's largest backpacker resort are presented, to illustrate its particular socio‐spatial evolution. The paper concludes that, when fuelled by an increasing number of arrivals and a growing demand for comforts, what were once drifter‐dominated peripheral places may evolve gradually into well‐established ‘resorts’ that satisfy contemporary backpackers' demands for infrastructure, natural settings and ambience. Developer‐tourists with an affinity to backpacker culture are likely to become key actors as they come to gain control over land use and local economic development. Copyright © 2007 John Wiley & Sons, Ltd.     

On the irrelevance of insider trading for managerial compensation

We examine changes in the compensation of CEOs of German firms after the prohibition of insider trading (IT) in 1994 to test whether IT is a relevant compensation device. While we find that the performance elasticity of explicit CEO pay slightly increases subsequent to the IT law adoption for non-financial firms indicating an incentive-substitution effect, the overall change in levels seems modest. We explore the hypothesis that compensation for forgone IT profits in general is small because typically, firms lack at least one of the two necessary conditions for profitable IT: the existence of a liquid stock market imposing low costs of transactions and the presence of a small number of co-insiders, preventing the information rent to be competed away. Based on a difference-in-difference estimation, we indeed find that explicit pay increases more strongly for intensely traded firms and decreases for non-financial firms and insurance companies with a higher number of co-insiders. The combined effect is relatively small except for firms with the most liquid shares.     

Adolescents as victims of familial violence: a hospital based surveillance

Adolescent abuse is an important and understudied issue in society. The objective of this study was to examine the epidemiology of physical injuries due to maltreatment among adolescents aged 10-19 years. Subjects came from seven hospitals/trauma centres in Washington DC that were involved in the Washington DC Initiative to Reduce Infant Mortality and Prevention of Childhood Injuries Study. From 1996-1998, information was gathered about all injuries to adolescents aged 10-19 years that resulted in a visit to a participating emergency department. This paper focuses on the subset 178 adolescents aged 10-19 years who presented with physical injuries due to maltreatment. It was found that 55% of victims of abuse were female. Abuse victims were more likely to be female than those with unintentional injury. The most common injuries were contusions to the extremities (29%). Mothers were the most common perpetrators (48%). A total of 64% of victims were assaulted with an object/weapon and the most common object used was a belt. There are some similarities and some important differences between patterns of maltreatment in adolescents vs. younger children. Increased awareness of maltreatment among older children is a critical step in increasing and improving screening and prevention practices among health-care professionals.     

Dynamics in foreign markets — A study of strategic control in CEE

Effective coordination is crucial to managing a global network of subsidiaries. Although much has been said on the instruments multinational companies use to control their foreign operations, only very little is known on how they develop over time. An empirical longitudinal analysis of 40 multinationals shows that as subsidiaries mature, control strategies need to be adapted. Consequently, headquarters’ executives need to take into account a dynamic perspective on interactive effects of single control instruments when selecting control strategies during the internationalization process.     

Measuring Ethnic Community Involvement: Development and Initial Testing of an Index*

This paper builds on the work of Chaganti and Greene, who distinguish between ethnic minority entrepreneurs/small business owners who are very involved with their ethnic community and those who are not. We extend their work by developing an Index of Ethnic Community Involvement based not only on personal but also business characteristics. We utilize a large sample size (698 interviews with entrepreneurs), drawn from five ethnic groups, and develop a valid and reliable (0.69) Index of Ethnic Involvement (IEI) with a strong emphasis on social capital theory. Our initial analysis shows the IEI predicts some personal and business characteristics. Future development will include building regression models to predict business outcomes. The IEI, when fully developed, promises to be useful for targeting assistance, education and training programs, and policy initiatives for entrepreneurs and small business owners according to the level of ethnic community involvement.