Low price signal default: an empirical investigation of its consequences

Low-price guarantees (LPG) signal the market position of a seller’s offer price and promise to compensate consumers in case that information is erroneous. In this research, we demonstrate that when retailers default on the information provided by an LPG, consumer perceptions of the retailer suffer, but the extent of the damage depends on the conditions associated with the default. On the basis of attribution theory, we posit that consumers may attribute default to the retailer’s opportunism but emphasize this attribution differently in various default conditions. Furthermore, we show that the restoration of consumer perceptions after a refund depends on consumers’ focus in terms of the signal itself. If they consider the protective, compensatory function of a low price signal, their post-refund outcomes are more favorable; when they focus on the informational function, these outcomes are less favorable. We discuss the theoretical and practical implications of these findings.

Effects of low price guarantees on consumer post-purchase search intention: The moderating roles of value consciousness and penalty level

While past research has focused on pre-purchase effects of low price guarantee (LPG), the present paper examines probable post-purchase consequences of such signals. Results of an experiment indicate that in an effort to enhance value from a purchase, consumers are more likely to engage in post-purchase search for lower prices when a purchase is made under an LPG. The experiment also indicates that presence of an LPG encourages post-purchase search intention only for consumers who are highly motivated to enhance value. Furthermore, it is seen that an LPG that offers higher refund leads to higher post-purchase search intention and this effect is also stronger for consumers with high concerns for enhancing value. The paper discusses several important implications of these findings for signaling theory and LPG-related retailing strategy.     

Semantic cues in reference price advertisements: The moderating role of cue concreteness

Retailers use a variety of semantic cues to advertise discounts at their stores. In this paper we introduce the concept of cue concreteness and examine its impact on effectiveness of semantic cues. Four studies were conducted which concur with the findings of earlier research in this area and expand our knowledge about the effectiveness of semantic cues. Results indicate that between-store cues are perceived to be more effective than within-store cues at moderate price discount levels only when the cues are concrete in nature. In addition, a between-store cue resulted in more favorable evaluations than a within-store cue when the ad was viewed at home, but only when the cue was concrete. Implications for marketers and public policy makers are discussed.     

A game-theoretic model of coalition formation among primates

This paper models the coalition formation process among primates as a sequential game. The population consists of individuals having distinct social ranks which is determined by the individual’s resource holding potential. Each member of the population is interested in gaining access to a food resource, either individually or via a coalition. At any given stage of the game, a player can either propose a specific coalition or he can be proposed to in order to join one. Hence, the strategy of a player consists of a sequence of decisions regarding who to propose to for the formation of a coalition and which proposals to accept or reject. We derive the preferences of the players over the various coalition structures under the assumption that the probability of a coalition to obtain the resource is given by a logistic distribution as a function of relative strengths of the players. We show that, given the primates’ strategic behavior, a variety of different coalition structures can emerge in equilibrium.      

Audit committee characteristics and investment in internal auditing

Regulators and others recently highlighted the increasingly important role of internal auditing in supporting and interacting with the audit committee to ensure the integrity and quality of financial reporting. Likewise, one of the roles of the audit committee is to oversee the quality of monitoring mechanisms implemented by the firm, which includes the internal audit function. However, our understanding of the relationship between the audit committee and internal auditing is limited. We fill this void by providing the first empirical evidence of the association between audit committee characteristics and the investment in internal auditing. Our analyses, from a sample of 181 SEC registrants, suggest that the investment in internal auditing (internal audit budget) is negatively related to the presence of auditing experts on the committee and the average tenure of audit committee members, but positively related to the number of audit committee meetings (a proxy for audit committee diligence). These observations suggest potential complementary and substitution effects between the audit committee and internal auditing, and thus raise important implications for future research.     

A novel hybrid multi-criteria method for supplier selection among SMEs on the basis of innovation ability

Today, small and large business houses operate collaboratively for the efficiency in the functioning of supply chains. Larger organisations mostly depend on small companies to supply majority of its components and thus they need to be careful while selecting their suppliers. Small organisations performing innovatively and supplying technologically upgraded as well as quality products at a cheaper rate can be a boon for the larger enterprise. This study develops a model for evaluating and selecting small firms as suppliers on the basis of their innovativeness. Best–Worst multi-criteria method is used to rank criteria of innovativeness and also to calculate their weights on the basis of expert opinion. Fuzzy TOPSIS methodology is used to rank the suppliers with respect to these criteria and finally select the best supplier among the available alternatives. A real-world application is illustrated by taking a case of auto component manufacturer and its seven suppliers, 5 main criteria and 23 sub-criteria are taken up for the study.

Abbreviations: AHP: analytical hierarchal process; ANP: analytical network process; DEMATEL: decision-making trail and evaluation laboratory; EMS: environment management system; ELECTRE: ELimination Et Choix Traduisant la REalité (elimination and choice expressing reality); FPIS: fuzzy positive ideal solution; FNIS: fuzzy negative ideal solution; ISM: interpretative structural modelling; PROMTHEE: preference ranking organisation method for enrichment evaluation; SME: small and medium enterprises; TOPSIS: technique for order preference by similarity to ideal solution; QFD: quality function deployment; VIKOR: VlseKriterijuska Optimizacija I Komoromisno Resenje; SP1; SP2; SP3; SP4; SP5; SP6; SP7: Various suppliers used as alternatives     

Social media as a destination marketing tool: its use by national tourism organisations

India's protected areas (PAs), especially those designated tiger reserves, are popular tourist destinations, experiencing considerable and growing visitor numbers, but the principles of ecotourism are not well implemented. This paper analyses tourism practice in a sample of popular tiger reserves in India according to four principles of responsible ecotourism: minimisation of environmental impacts, generation of funds for conservation, benefits to local communities, and education of visitors. Evidence demonstrates that few criteria of ecotourism are met in most PAs: tourism imposes significant detrimental impacts, little of the generated revenue is captured, local communities get mostly menial jobs, and visitor education is virtually non-existent with tourism geared mainly towards thrill-seeking. The Indian Forest Service, which manages the PAs, is on the whole unprepared and ill-equipped to plan and implement proper ecotourism practices and faces constant pressure from other actors to increase tourism revenue. Periyar National Park stands out as an exception where innovative approaches involving local communities have brought about a significant positive change. Policy recommendations are offered based on limited, low-impact activities with high participation of local communities which is essential to build local support for conservation that has been historically lacking.     

Accruals Management to Achieve Earnings Benchmarks: A Comparison of Pre-managed Profit and Loss Firms

Abstract:  This study examines whether firms with profits before accruals management are more likely than firms with losses before accruals management to meet or exceed earnings benchmarks when pre-managed earnings are below those benchmarks. We extend Brown (2001) by documenting that the differential propensity to achieve earnings benchmarks by profitable and nonprofitable firms results from differential accruals management behavior. We find that firms with profits before accruals management are more likely than firms with losses before accruals management to have pre-managed earnings below both analysts' forecasts and prior period earnings and reported earnings above these benchmarks.     

Determinants of Trade Misinvoicing

Trade misinvoicing should be seen as an element of de facto capital account openness. Traditional explanations for trade misinvoicing??high custom duties and weak domestic economies??are less persuasive in a world of high growth emerging markets that have low trade barriers. We construct a 53-country data set over a 26?year span, covering both industrialized and developing countries, to study the phenomena of export and import misinvoicing. Capital account openness, differentials in interest rates, political stability, corruption, indebtedness and the exchange rate regime are identified as factors related to misinvoicing.     

Partitioned pricing: Can we always divide and prosper?

The widespread use of partitioned pricing by marketers may be the result of perceptions that it enhances the perceived value of the offer. This research identifies boundary conditions for the effectiveness of partitioned pricing by examining the role of the reasonableness of a surcharge and the need for cognition in consumers’ processing of pricing information. Three studies, each consisting of two experiments, examine the effectiveness of partitioned versus combined pricing and show that for high need for cognition persons, partitioned pricing has a more favorable effect than combined pricing when the surcharges are reasonable; these effects reverse when the surcharges are unreasonable. The studies indicate no differences between partitioned and combined pricing across surcharge conditions for low need for cognition consumers. A fourth study incorporating both reasonable and unreasonable surcharges in one experiment substantiates the conclusions of the first three studies. Finally, detailed process measures provide evidence that high versus low need for cognition persons evaluate partitioned pricing information differently in distinct surcharge conditions.