The Firm's Management of Social Interactions

Consumer choice is influenced in a direct and meaningful way by the actions taken by others. These “actions” range from face-to-face recommendations from a friend to the passive observation of what a stranger is wearing. We refer to the set of such contexts as “social interactions” (SI). We believe that at least some of the SI effects are partially within the firm's control and that this represents an exciting research opportunity. We present an agenda that identifies a list of unanswered questions of potential interest to both researchers and managers. In order to appreciate the firm's choices with respect to its management of SI, it is important to first evaluate where we are in terms of understanding the phenomena themselves. We highlight five questions in this regard: (1) What are the antecedents of word of mouth (WOM)? (2) How does the transmission of positive WOM differ from that of negative WOM? (3) How does online WOM differ from offline WOM? (4) What is the impact of WOM? (5) How can we measure WOM? Finally, we identify and discuss four principal, non-mutually exclusive, roles that the firm might play: (1) observer, (2) moderator, (3) mediator, and (4) participant.     

The Effect of Interpersonal Trust,Need for Cognition,and Social Loneliness on Shopping,Information Seeking and Surfing on the Web

This study contends that certain personality traits of e-consumers have an affect on their shopping, surfing and information seeking behaviors on the Web. Specifically, it is proposed that e-consumers who are low on interpersonal trust are less likely to shop on the Web due to their heightened concerns with Web security. Similarly, an argument is made that e-consumers who enjoy cognitively demanding processing tasks are more likely to use the Web for information search. Finally, it is posited that social loners will be selectively drawn to Web surfing. Findings from an empirical study are presented which support these assertions. Implications of this study for marketers and future researchers are discussed.     

A learning market-maker in the Glosten–Milgrom model

This paper develops a model of a learning market-maker by extending the Glosten–Milgrom model of dealer markets. The market-maker tracks the changing true value of a stock in settings with informed traders (with noisy signals) and liquidity traders, and sets bid and ask prices based on its estimate of the true value. We empirically evaluate the performance of the market-maker in markets with different parameter values to demonstrate the effectiveness of the algorithm, and then use the algorithm to derive properties of price processes in simulated markets. When the true value is governed by a jump process, there is a two regime behaviour marked by significant heterogeneity of information and large spreads immediately following a price jump, which is quickly resolved by the market-maker, leading to a rapid return to homogeneity of information and small spreads. We also discuss the similarities and differences between our model and real stock market data in terms of distributional and time series properties of returns.     

Logo design in marketing communications: Brand logo complexity moderates exposure effects on brand recognition and brand attitude

Although good logos are essential for creating brand awareness and brand equity, the effects of logo design features have not been tested empirically. Extending previous findings regarding the effects of design complexity and exposure in advertising to the field of brand logos, two experiments tested the effects of logo complexity and exposure on brand recognition and brand attitude. It was hypothesized that logo complexity moderates the effects of exposure on logo recognition and brand attitudes, such that exposure increases recognition and positively impacts brand attitudes in particular for complex logos. Experiment 1 (N = 68) tested the effects of six unfamiliar logos on recognition (in milliseconds) in a 2 (logo design complexity: simple vs complex) × 2 (logo exposure: one vs four) mixed design. Experiment 2 (N = 164) tested the effects of eight familiar logos on logo recognition and brand attitudes in a 2 (complexity: simple vs complex) × 2 (logo exposure: well-established vs recently established) within-subjects design. Findings showed that increases in exposure led to an increase in brand recognition and to more positive attitudes in particular for complex brand logos, suggesting short-term benefits for simple brand logos, and long-term benefits for complex logos.     

HOW CERTAIN ARE DUTCH HOUSEHOLDS ABOUT FUTURE INCOME? AN EMPIRICAL ANALYSIS

The precautionary saving literature shows that income uncertainty increases savings and wealth. To estimate the magnitude of this effect, we need a measure of income uncertainty. This paper empirically analyzes subjective income uncertainty in The Netherlands. Data come from a large Dutch household survey. We measure income uncertainty by asking questions on expected household income in the next twelve months. First, we describe the data and investigate the relationship between the measure of income uncertainty and a number of household characteristics. Controlling for information on expected income changes, we find strong relationships between labor-market characteristics and the subjective income uncertainty as reported by the heads of the households. Second, we compare income uncertainty in The Netherlands with income uncertainty in the U.S. and Italy. It becomes evident that perceived income uncertainty is smaller in The Netherlands than it is in the U.S.     

A framework to measure relative performance of Indian technical institutions using integrated fuzzy AHP and COPRAS methodology

There are many opportunities and challenges in area of Indian technical education due to liberalization and globalization of economy. One of these challenges is how to assess performance of technical institutions based on multiple criteria. This paper is focused on performance evaluation and ranking of seven Indian Institute of Technology (IITs) in respect to stakeholders’ preference using an integrated model consisting of fuzzy AHP and COPRAS. Findings based on 2007–2008 data show that performance of two IITs need considerable improvement. To the best of our knowledge it is one of few studies that evaluates performance of technical institutions in India.     

On a property of orthogonal arrays and optimal blocking of fractional factorial plans

It is shown that fractional factorial plans represented by orthogonal arrays of strength three are universally optimal under a model that includes the mean, all main effects and all two-factor interactions between a specified factor and each of the other factors. Thus, such plans exhibit a kind of model robustness in being universally optimal under two different models. Procedures for obtaining universally optimal block designs for fractional factorial plans represented by orthogonal arrays are also discussed. Acknowledgements. The authors wish to thank the referees for making several useful comments on a previous version.     

Optimal variance- and efficiency-balanced designs for one- and two-way elimination of heterogeneity

Summary In this paper, a series ofE-optimal non-binary variance balanced (block or row-column) designs and a series ofE-optimal non-binary efficiency balanced (block or row-column) designs are provided in certain broad classes of competing designs. Furthermore, their high efficiencies by the usualA- andD-optimality criteria are shown.     

Price convergence across regions in India

The paper attempts to examine whether there is price convergence across various regions in India. Using panel unit root tests that are robust to cross-sectional dependence, it is found that relative price levels among various regions in India are mean-reverting. Further, we decompose each series into a set of common factors and idiosyncratic components. The decomposition enables us to test stationarity and estimate half-lives of the common factors and the idiosyncratic components separately. Both these components are found to be stationary. Idiosyncratic price shocks, however, are found to be more persistent as compared to the common factor. Results also indicate that transportation cost proxied by distance can explain a part of the variation in prices between two locations in India. The authors would like to thank Dibyendu Bhaumik for arranging the data for this study. Views expresed in the paper are personal and do not reflect the views of the organizations.