A dynamic perspective: local interactions driving the spread of social networks

ABSTRACT

This study takes a micro standpoint to quantitatively verify the extent to which local interactions affect the expansion of dynamic social networks. By reviewing and synthesizing the theoretical literature in this article, we seek to establish a pragmatic analytical framework to capture the underlying functioning of local interactions. It then aims to produce findings on seven distinct marketing campaigns in which the real-world virtual communities offer intact time-series connections. In our considered cases, the firm-to-consumer interactivity plays a pivotal role in social media marketing while the customer-driven influence advances individual information transmission. The significant positive relationships demonstrate features of interactivity within subgroups including reciprocal edges and directed 3-cliques associated with the evolution of the virtual community by electronic word-of-mouth (WOM) of both firm-to-consumer and consumer-to-consumer interactions. More importantly, the attenuation of local interactions to a large extent leads to the cut-off point of the growth of the dynamic social network.     

Risk-managed industry momentum and momentum crashes

This paper investigates Barroso and Santa-Clara’s [J. Financ. Econ., 2008, 116, 111–120] risk-managed momentum strategy in an industry momentum setting. We investigate several traditional momentum strategies including that recently proposed by Novy-Marx [J. Financ. Econ., 2012, 103, 429–453]. We moreover examine the impact of different variance forecast horizons on average pay-offs and also Daniel and Moskowitz’s [J. Financ. Econ., 2016, 122, 221–247] optionality effects. Our results show in general that neither plain industry momentum strategies nor the risk-managed industry momentum strategies are subject to optionality effects, implying that these strategies have no time-varying beta. Moreover, the benefits of risk management are robust across volatility estimators, momentum strategies and subsamples. Finally, the ‘echo effect’ in industries is not robust in subsamples as the strategy works only during the most recent subsample.     

Die Erwartungen der Wirtschaft für 2018

The German economy experiences a boom period. The leading economic research institutes upgrade their economic balance for 2017 to a growth rate exceeding two per cent and their forecasts for 2018 are equally positive. This optimism is widespread despite the UK’s exit from the EU, the protectionist tendencies and the difficult coalition-building in Germany. Technological innovations look ahead: manufacturing industry and trade sector have to react to digital transformation — i.e. electro-mobility, autonomous driving, the use of artificial intelligence and the spread of online trading.     

A de-biased direct question approach to measuring consumers' willingness to pay

Knowledge of consumers' willingness to pay (WTP) is a prerequisite to profitable price-setting. To gauge consumers' WTP, practitioners often rely on a direct single question approach in which consumers are asked to explicitly state their WTP for a product. Despite its popularity among practitioners, this approach has been found to suffer from hypothetical bias. In this paper, we propose a rigorous method that improves the accuracy of the direct single question approach. Specifically, we systematically assess the hypothetical biases associated with the direct single question approach and explore ways to de-bias it. Our results show that by using the de-biasing procedures we propose, we can generate a de-biased direct single question approach that is accurate enough to be useful for managerial decision-making. We validate this approach with two studies in this paper.     

People,Actors, and the Humanizing of Institutional Theory

In much contemporary institutional scholarship, the term ‘actor’ is used as a shorthand for any entity imbued with agency. Talking about actors in institutions thus serves the necessity of allocating agency before returning to the analysis of institutional structures and processes. We find this approach to actorhood limiting, conceptually and normatively. Grounded in the perspective of pragmatist phenomenology, we assert the need for distinguishing between persons and actors, and the value of integrating the person into institutional analysis. We conceive of persons as humans with a reflective capacity and sense of self, who engage with multiple institutions through the performance of institutional roles. People may acquire actorhood by temporarily aligning their self with what is expected from a particular actor-role in an institutional order. Conversely, institutions enter people’s lifeworld as they are personified in people’s social performances. We outline this perspective and examine conceptual and normative implications that arise from the integration of human experience in institutional analysis.     

ON INDUSTRY MOMENTUM STRATEGIES

In this article, we investigate industry momentum strategies. We find that industry portfolios that outperformed in the previous month generate on average significantly higher returns in the holding period than those that underperformed. Plain and risk-managed strategies using this short-run industry momentum are not subject to optionality effects. Also, the tail risks of these strategies are uncorrelated with traditional industry momentum strategies. The spread associated with the risk-managed strategy both meets necessary conditions as a risk factor and is significantly priced in the cross-section of U.S. industry portfolios.     

Governance, organizational capabilities, and restructuring in transition economies

This paper focuses on the links between governance, firm capabilities and restructuring following the large-scale privatization process in Central and Eastern European transition economies using an integrative approach. Restructuring in these countries has been motivated by political and institutional changes and less so by market forces. Accordingly, political processes have produced political solutions such as “give-away” privatizations to insiders. These privatizations, in contrast to divestitures to outside owners, have realized less substantive restructuring because non-market incentives, such as too much managerial equity ownership, have created managerial entrenchment. In addition, we propose a connection between governance and organizational learning suggesting that learning is inhibited by excessive managerial ownership and lack of board knowledge regarding its oversight function. Furthermore, this entrenchment and poor board functioning may be perpetuated in financial-industrial groups, which have emerged as substitutes for market intermediaries in emerging economies. Thus, we propose that outside ownership involvement and the development of organizational capabilities may facilitate restructuring in the Central and Eastern European context. Our theoretical arguments are supported by case study evidence from transition economies.     

Measuring experienced emotions during service recovery encounters: construction and assessment of the ESRE scale

The role of emotions is increasingly gaining attention as a central element in understanding customer evaluations of service failure and recovery experiences. Despite the importance of emotions for service organizations, however, empirical investigations of customers’ emotional response to service recovery encounters remain scarce. A reason for this has been the absence of a valid and reliable measurement instrument for analyzing and comparing the emotions associated with different recovery experiences. Addressing this issue, the current paper presents the development and validation of a new scale specifically designed to measure experienced emotions during service recovery encounters (ESRE). The results show that the ESRE scale is a valid and reliable instrument, which should be helpful for empirically studying the role of emotional responses to service failure and recovery encounters.

Oil prices decline as concerns about supplies lessen

Expectations of shorter oil supplies in the case of a war in the Middle East pushed crude oil prices upwards for many months, but in March prices started to fall significantly even before the war against Iraq had started. Does the price peak lie behind us, and can oil consumers even hope — after the war — for a prolonged period of low oil prices?