An escalation of commitment perspective on allocation-of-effort decisions in professional selling

Salesforce compensation theory assumes that given proper design of the incentive structure, salespeople will rationally allocate effort to maximize returns to their firm and themselves. However, faced with large sunk investments over long selling cycles, salespeople continue to commit resources to opportunities with little or no chance of being won, to the exclusion of viable leads. This article theoretically explores and empirically tests this over-investment effect under four potentially moderating conditions using a large multinational corporation’s industrial salesforce. The findings from this field study indicate that escalation of commitment is more likely to occur in non-strategic accounts and accounts not involving channel partners. In addition, salespeople with lower ability demonstrate greater escalation of commitment. The study indicates that without targeted managerial intervention, salespeople will over-invest precious selling resources in unprofitable, unwinnable opportunities.     

The fluent online shopping experience

Consumers increasingly use various Internet-enabled devices for online shopping; thus, a critical topic for both research and practice is the visual characteristics of the information presented in this medium. This study builds on fluency theory within an environmental psychology framework. Specifically, this research examines how consumers' perceived fluency of the verbal online information affects their perceived cognitive effort and positive affect within a choice context. The experimental results show that (1) perceptual fluency affects both cognitive effort and positive affect experienced during online shopping and (2) cognitive effort and positive affect influence judgments about the perceived decision quality of the choice made. This research is notable in its simultaneous (as opposed to consecutive) examination of the relationship among the three dimensions of processing fluency (perceptual fluency, positive affect, and cognitive effort) and their impact on consumers' choice satisfaction with an online shopping task.     

Hypothesis testing for diffusion processes with continuous observations: Direct computation of large deviation results for error probabilities

We propose statistical tests for deciding between two alternatives for diffusion processes observed continuously over a finite time interval. Our tests emphasize the large deviation aspects, or equivalently, the asymptotic behavior of probabilities of type I and type II errors and the rate at which these probabilities go to zero as the observation time increases. We obtain these rates using direct methods of calculation. We provide specific computational examples for diffusion processes commonly used in finance and show that the error probabilities for these cases go to zero exponentially fast. Applications in finance and economics are discussed.     

Efficiency‐Seeking Emerging Market Firms: Resources and Location Choices

We study the efficiency‐seeking location choices of Indian software firms. In particular, we investigate the influence of heterogeneity in their resources on their location choices. The resource‐based view posits that firms face difficulties in transferring their resources in dissimilar host‐country environments. Prior research has investigated this phenomenon primarily for market‐seeking motives of multinational firms. With the help of hierarchical linear modeling, we analyze 650 location choices of Indian software firms and find that efficiency‐seeking firms face difficulties in locating in host countries with dissimilar and challenging labor environments. We find that the firms with core competence manifested through capability maturity model integration (CMMI) accreditation are able to overcome issues related to resource fungibility in dissimilar host‐country environments. © 2014 Wiley Periodicals, Inc.     

Comparing market areas using kernel density estimation

From a managers’ point of view it is useful to know whether or not a market area has changed over time, and whether two market areas are different. In this paper we propose, using the kernel density estimation method, to estimate the density of a market area and show how the estimated market area densities may be compared for differences using Bayesian cross-validated likelihood methods. The proposed methodology is highlighted using two applications. One application involves comparison of lunch and dinner markets of a restaurant and the other application involves identifying the optimal area for a direct mail program.     

OPTIMAL BIDDING FOR TENDER OFFERS

By modeling tender offers as auctions in which bidders arrive sequentially, I show that the first bidder includes a high premium in its opening bid in an attempt to freeze out potential competitors. When expected competition goes up, the premium offered increases as does target shareholder welfare, while bidders suffer. Also, total synergy gains generated increase with competition. Including a premium in the opening bid remains optimal for the first bidder when target management is permitted to resist. Target management's ability to resist, though, benefits target shareholders even when resistance is not actually observed. When agency costs are introduced, the effect of managerial resistance on target shareholder welfare becomes ambiguous.     

Conserving biodiversity of community forests and rangelands of a hot arid region of India

Community forests/rangelands, called Orans and Gauchars in the western arid part of India, constitute a significant proportion of the total geographical area of the region. Given the economic importance of these areas from time immemorial, the local people took special care to protect and sustainably utilize these common property resources. However, these forests and rangelands have suffered severe degradation in the recent past. Rehabilitation of Orans and Gauchars needs proper planning and execution of a technically feasible package, tailored to suit their unique edaphic, climatic, vegetation, social and legal status. Keeping in view the vast potential of these areas to sustain large scale livestock farming for overall economic upliftment of the local population, there is an urgent need to rehabilitate these degraded areas in an efficient and cost-effective manner. Salient problems faced by these natural assets of western Rajasthan and strategies for their rehabilitation have been discussed in the paper.     

Remittance receipts and allocation: a study of three African countries

Remittances may influence household expenditures, poverty rates, development and investments in the receiving country. Using World Bank survey data from Ethiopia, Uganda and Kenya, the influence of remitters’ and recipients’ characteristics on remittance amounts and allocation is examined. Effects of the remitter–receiver characteristics on remittance amounts are generally similar between countries. Such similarities imply a potential similar effect of policies in these countries. Age, household income, frequency of communication, family relations with remitter and country the recipient resided in influence remittance allocation. Recipients in Ethiopia and Uganda are more likely to allocate remittance towards savings than those in Kenya.