Construction Procurement Auctions: Do Entrant Bidders Employ More Aggressive Strategies than Incumbent Bidders?

Asymmetric auction theory predicts that weak bidders will bid more aggressively when facing strong bidders, while strong bidders will bid less aggressively when facing weak bidders. This paper finds empirical evidence to support this hypothesis regarding the behavior of weak bidders in construction auctions. Examining a comprehensive data set of more than 7,500 Utah construction procurement auctions, we find that entrants bid more aggressively than do incumbents for most subcontractor types. Reflecting their inexperience and uncertainty regarding the true cost of projects, entrants’ bids are found to be more widely dispersed around the central tendency of bids.     

Are There Gains to Joining a Union? Evidence from Mexico

Union density in Mexico has been in decline since the 1980s. This article provides evidence on the worker compensation gains (losses) made by males upon joining (leaving) a union. These are estimated using a nationally representative labour market survey covering 2005q1–2016q1. The transitions between non‐union and union status are investigated using a difference‐in‐difference estimator. The findings suggest that joining a union is associated with modest wage gains, contrary to what the literature has shown for most industrialized nations. However, in contrast to this, some union leavers are found to experience a decrease in wages. This article also contributes to the wider literature by providing the first estimates of the longitudinal gain (loss) associated with joining (leaving) a union with respect to non‐wage benefits. The findings show joining (leaving) a union increases (decreases) the probability of being in receipt of legally guaranteed benefits such as bonuses and paid holidays. This suggests that although union density may be in decline, unions still have an important role to play in voicing worker's preferences with respect to compensation and ensuring that employers comply with the law.     

Attitudes and behaviours of key account managers: Are they really any different to senior sales professionals?

This study investigates the range of attitudes and behaviours exhibited by Key Account Managers (KAMs) in their roles as customer relationship managers. Specifically, we test whether KAMs exhibit different behaviours and attitudes towards relationship management compared to other sales professionals based on a range of assumptions currently theorized but untested in the Key Account Management (KAM) literature. Utilizing the existing theoretical models of a KAM role we identify six major areas of relational behaviour assumed in the literature to separate the KAM from the sales professional. Drawing on a cross sectional quantitative study of 10 organizations and 409 key account managers, sales managers, and senior sales executives we explore goal orientation, planning, customer embeddedness, strategic prioritization, adaptability and internal management behaviours of our groups and find that, in certain managerial tasks, KAMs do indeed exhibit many of the different behaviours and attitudes predicted in the literature. However, in many customer-facing, goal orientated and revenue generating activities, contrary to expectations, they display similar attitudes and behaviours to those in senior sales roles. This challenges the way that the KAM role has previously been conceptualized. Our findings raise a potential issue for senior managers, since KAMs' unexpectedly short term orientation may lead to insufficient consideration of the strategic consequences of their decisions for these key customer relationships.     

Bidder asymmetries in procurement auctions: Efficiency vs. information – Evidence from railway passenger services

We estimate a structural model of procurement auctions with private and common value components and asymmetric bidders using detailed contract-level data on the German market for railway passenger services. Exploiting exogenous variation in the procurement design, we disentangle the asymmetries in private costs from asymmetries in information about the common value. While each asymmetry can rationalize a firm’s dominance, understanding its source is crucial for evaluating the auction design as welfare and revenue implications depend on the source of dominance. Our results indicate that the incumbent is slightly more cost-efficient and has substantially more precise information about the common value component. If the bidders’ strategic response to the common value asymmetry were eliminated, the average probability of selecting the efficient firm would increase by 43%-points.     

Searching for Relationship Value in Business Markets: Are We Missing Something?

Economic value has always been the main consideration in decisions regarding alternative courses of action in management. The relationship perspective that became popular in service and business marketing research and practice involves the application of the value concept to business relationships. Recent research in marketing on the value of relationships has been concerned with identifying the various dimensions of relationships content that can, in principle, give origin to costs or benefits for the parties involved. The way in which parties in a business relationship perceive and interpret value and how their perceptions affect their behaviors have not been at the center of this research. We will argue in this paper that perceptions impact parties' behaviors and the way business relationships develop, and report findings of a longitudinal study of how buyers and suppliers perceive and interpret value of business relationships. We then revisit the concept of value and formulate three propositions regarding the meaning of value in the context of supplier-customer relationships.     

Physician Assistants: Is There a Return to Training?

The major finding of this study is that the private rate of return to training physician assistants, employing the most conservative projections, is approximately 20 per cent, a rate comparable to that found for physicians. This result would seem to suggest that PA training is a good investment for the individual and that future demand for training will be high. The validity of this result, however, depends on the accuracy of the earnings projections that were utilized. Although they appear reasonable, only future observations can confirm their accuracy.
The multiple regression model used to test the significance of various independent variables indicated that for the ten-year period analyzed race, sex, and years of education prior to training did not explain differences in net present values of PA training, whereas age, years of health-related experience before training, training in a specialty, and the type of medical practice employing the PA were found to be important.
Although this study's findings should be considered tentative, the major policy implication evident from this research is that increases in government support to physician assistant trainees does not appear warranted at this point.     

Training and Labour Market Flexibility: Is There a Trade-off?

This paper explores the nexus between work-related training and labour market 'flexibility' (which we proxy by contract type, part-time employment and lack of union coverage), using the first five waves of the British Household Panel Survey (BHPS) conducted over the period 1991–5. Our results show that workers on short-term employment contracts, who are working part-time or are not covered by a union collective agreement, are significantly less likely to be involved in any work-related training to improve or increase their skills. These findings suggest that there is a trade-off between expanding the more marginal forms of employment and expanding the proportion of the work-force getting work-related training.     

The Financial Costs of Caring in the British Labour Market: Is There a Wage Penalty for Workers in Caring Occupations?

Recent evidence from the USA suggests that people engaged in occupations involving providing care for others, such as childcare and teaching, suffer a wage penalty. After taking into account job and individual characteristics such as level of education and work experience, people in these occupations in the American study earned about 6 per cent less than their peers in other types of occupation. However, we do not yet know if people working in similar occupations in other countries also suffer the same degree of disadvantage. The issue is important because, despite the perception that people in caring jobs place a relatively low weight on the level of remuneration when making career decisions, a number of studies have shown clear evidence of an association between pay and the propensity to give up working in a caring occupation. There are implications too for social inequality as many caring jobs are done by women and associated wage penalties could contribute to the persistent gender gap in pay. This study compares and contrasts the predictions of neoclassical economics, cultural feminist theory and social closure theory. Data are taken from 17 waves of the British Household Panel Survey and include a total of 23,773 individuals, giving 110,677 person‐year observations. These data are analysed using multi‐level linear regression. The results show clear evidence of a statistically significant wage penalty associated with working in some caring occupations. Those occupations requiring lower levels of educational qualification, such as nursing assistants and auxiliaries, are particularly hard‐hit by the wage penalty. On the other hand, some occupations, such as medicine and teaching, have fared better than comparable non‐caring occupations over the same period. We discuss the implications of these results for the gender gap in pay, poverty, social inequality and the future supply of caring workers.     

Generic non-technical procedures in design problem solving: Is there any benefit to the clarification of task requirements?

The quasi-experimental field study with 174 advanced engineering students analysed the possibilities to assist the requirement analysis when solving design problems. Technical check lists are in common practice for assisting the requirement analysis. We wondered if a generic question answering system (GQAS) aiming at the ‘semantic relationships’ would offer an additional benefit to the exhaustive identification of the requirements of a design task when a technical check list were offered at the same time. Therefore, the students were asked to develop a list of requirements for the design of a machine collecting windfall. Whereas one group was offered the technical check list together with the generic question answering system, the other group was only offered the technical check list in assisting their task. The entire number of identified applicable requirements is significantly higher for the group with the additional GQAS. The additional benefit of answering generic interrogative questions holds for the majority of the individual categories of technical requirements. The benefit is explained with the proven stimulation of meta-cognitive processes by means of systems of interrogative questions. Practically, the consideration of generic procedures of problem solving in engineering design education may be recommended.     

Gender Differences in Involuntary Job Loss: Why Are Men More Likely to Lose Their Jobs?

Empirical studies have consistently reported that rates of involuntary job loss are significantly lower among female employees than among males. Only rarely, however, have the reasons for this differential been the subject of detailed investigation. In this article, household panel survey data from Australia are used that also find higher rates of job loss among men than among women. This differential, however, largely disappears once controls for industry and occupation are included. These findings suggest that the observed gender differential primarily reflects systematic differences in the types of jobs into which men and women select.     

Customer attitudes of stayers and defectors in B2B services: Are they really different?

Identifying attitudinal differences between stayers and defectors is important in establishing a deeper understanding of customer satisfaction and loyalty research. Both managers and academics often use global customer attitudes, such as customer satisfaction and behavioral intentions, as determinants of customer loyalty. The implicit assumption is that customer satisfaction and/or behavioral intentions are valid, and accurate, predictors of actual loyalty behaviors. This study compares customer attitudes of stayers and defectors in B2B services using respondents (primary decision makers) from a Fortune 100 company. The results show that the commonly used customer metrics of service quality, satisfaction, and behavioral intentions have some differences between stayers and defectors. However, these metrics are shown to be relatively weak differentiators of actual customer defection. The stayers and defectors are much more similar, than different, on most metrics. The most notable difference is price perceptions, where defectors appear to be more price sensitive than stayers. These findings have significant implications for the design and use of customer-focused research by managers.     

Are organizational buyers rational? Using price heuristics in functional risk judgment

Although recent studies on B2B marketing suggest that organizational buyers may not be as rational as the prevailing perspective would assume, empirical evidence is still scarce. We argue that managers infer a product's functional risk from its price level, which is a behavioral response to price stimuli similar to what happens in the B2C context. We conducted an experiment manipulating the price, importance of the decision, and type of product (intense in search and credence attributes). Our findings narrow a research gap previously identified by various authors regarding the lack of empirical studies on behavioral aspects of B2B pricing, specifically related to the price-quality effect (a common heuristic used by shoppers in the B2C market, in which buyers perceive price to be a signal of the inherent qualities of a product). We identify potential boundary conditions that explain the relationship between price and perception of a product's functional risk.     

Are Minimum Wage Effects Greater in Low‐Wage Areas?

Empirical work on the minimum wage typically estimates effects averaged across high‐ and low‐wage areas. Low‐wage labor markets could potentially be less able to absorb minimum wage increases, in turn leading to more negative employment effects. In this article, we examine minimum wage effects in low‐wage counties, where relative minimum wage ratios reach as high as 0.82, well beyond the state‐based ratios in extant studies. Using data from the American Community Survey, the Quarterly Workforce Indicators, and the Quarterly Census on Employment and Wages, we implement event study and difference‐in‐differences methods, estimating average causal effects for all events in our sample and separately for areas with lower and higher impacts. We find positive wage effects, especially in high‐impact counties, but do not detect adverse effects on employment, weekly hours, or annual weeks worked. We do not find negative employment effects among women, Blacks, and/or Hispanics. In high‐impact counties, we find substantial declines in household and child poverty. These results inform policy debates about providing exemptions to a $15 federal minimum wage in low‐wage areas.     

Are products striking back? The rise of smart products in business markets

The business world is experiencing a shift away from ‘physicality’ due to the ubiquitous growth of the service sector and a progressive shift from selling product to offering service. Yet, at the same time, with regard to technology-based phenomena such as the Internet of Things (IoT), it is physical products equipped with sensors that are at the centre of the transformation. Our research seeks to understand how business products become smart products. It focuses on how product physicality (visibility of smartness; additional functions) and product ecosystems (product connectedness; degree of autonomy) are changing, and the resulting issues for marketing managers. We propose a typology of smart products along two dimensions: ‘Product Attributes’ and ‘Ecosystemic attributes’. We distinguish four categories of smart products: More Efficient Products (MEPs), Augmented Products (APs), Products as a Node (PN), and Products as a Hub (PH). In each category, a product acquires a certain degree of ‘digital enhancement’, ‘embeddedness’ and ‘transformativeness’, as we describe. We also discuss several implications of our work both at the theoretical and managerial levels.     

Open innovation: Are inbound and outbound knowledge flows really complementary?

One novel implication of the open innovation paradigm is that inflows and outflows of knowledge are complementary. We argue that engaging simultaneously in buying and selling knowledge should allow firms to increase innovation outcomes. At the same time, we identify some of the relevant costs (cognitive, transaction, and organizational costs) that “open” firms can reduce by combining knowledge inflows and outflows. Empirically, however, we find no evidence for such complementarity in a sample of Belgian manufacturing firms. Firms buying and selling knowledge do increase their sales of new products, but at the same time their R&D costs increase more than proportionally. Our findings, therefore, indicate the need for research into a better understanding of the drivers of actual costs of organizing for open innovation. Copyright © 2015 John Wiley & Sons, Ltd.     

Does the fourth entrant make any difference?: Entry and competition in the early U.S. broadband market

We study the importance of sunk costs in determining entry conditions and inferences about firm conduct in an adapted Bresnahan and Reiss (1991, 1994) framework. In our framework, entrants incur sunk costs to enter, while incumbents disregard these costs in deciding on continuation or exit. We apply this framework to study entry and competition in the local U.S. broadband markets from 1999 to 2003. Ignoring sunk costs generates unreasonable variation in firms' competitive conduct over time. This variation disappears when entry costs are allowed. Once the market has one to three incumbent firms, the fourth entrant has little effect on competitive conduct.     

Are Investors the Bad Guys? Tenure and Neighborhood Stability in Chelsea,Massachusetts

In this article, we examine the role of investors and occupant‐owners in an urban context during the recent housing crisis. We focus on Chelsea, Massachusetts, because it is a dense city, dominated by multifamily housing structures with high rates of foreclosure for which we have particularly good data. We distinguish between occupant‐owners and investors using local data, and we find that many investors are misclassified as occupant‐owners in the Home Mortgage Disclosure Act data. Then, employing a competing risks framework to study ownerships during the period 1998 through mid‐2010, we find that local investors, who tend to invest more in relation to purchase prices and sell more quickly, experienced approximately 1.8 times the mortgage foreclosure risk of occupant‐owners, conditional on financing. Nonlocal investors have no statistically significant difference in foreclosure risk from occupant‐owners. Nonetheless, those owners with subprime purchase mortgages (most of whom are occupant‐owners) faced the highest foreclosure risk when house prices fell.     

R&D Partnerships and Innovation Performance: Can There Be too Much of a Good Thing?

R&D collaboration facilitates the pooling of complementary skills, learning from the partner as well as the sharing of risks and costs. Research therefore stresses the positive relationship between collaborative R&D and innovation performance. Fewer studies address the potential drawbacks of collaborative R&D. Collaborative R&D comes at the cost of coordination and monitoring, requires knowledge disclosure, and involves the risk of opportunistic behavior by the partners. Thus, while for lower collaboration intensities the net gains can be high, costs may start to outweigh benefits if firms perform a higher share of their innovation projects collaboratively. For a sample of 2735 firms located in Germany and active in a broad range of manufacturing and service sectors, this study finds that increasing the share of collaborative R&D projects in total R&D projects is associated with a higher probability of product innovation and with a higher market success of new products. While this confirms previous findings on the gains for innovation performance, the results also show that collaboration has decreasing and even negative returns on product innovation if its intensity increases above a certain threshold. Thus, the relationship between collaboration intensity and innovation follows an inverted‐U shape and, on average, costs start to outweigh benefits if a firm pursues more than about two‐thirds of its R&D projects in collaboration. This result is robust to conditioning market success to the introduction of new products and to accounting for the selection into collaborating. This threshold is, however, contingent on firm characteristics. Smaller and younger as well as resource‐constrained firms benefit from relatively higher collaboration intensities. For firms with higher collaboration complexities in terms of different partners and different stages of the R&D process at which collaboration takes place, returns start to decrease already at lower collaboration intensities.