The role of obsolescence and inventory costs in providing commitment

This paper modifies the Cournot and Stackelberg models to allow the firms to sell less than they have produced and to store the unsold portion of their output as inventory. Even if one of the firms can choose its output before the other, if it is costless to carry unsold goods forward then the Cournot outcome emerges. We show, however, that costs of carrying the inventory forward endow the firms with a limited degree of commitment to sell what they have produced. This partially restores the first-mover advantage. If the firms choose their outputs simultaneously, the Cournot outcome emerges and has locally consistent conjectures.     

The role of ambiguity tolerance in consumer perception of remanufactured products

This study examines ambiguity tolerance, perceived quality, and willingness to pay for remanufactured products. We found evidence to support a direct relationship between a consumer's tolerance for ambiguity and their willingness to pay for remanufactured products. There was also support for an indirect relationship between ambiguity tolerance and willingness to pay that is mediated through perceived quality. Extant literature often lacks an empirical justification regarding costing and quality assumptions for remanufactured products. This research provides such justification while also offering an explanation as to why consumers view remanufactured products as being of lower quality and are less willing to pay for them. Those employed in the remanufacturing industry are advised to reduce the level of ambiguity associated with their remanufacturing processes in order to command higher prices for their products in the marketplace.     

Complementarity, coordination and compatibility: The role of fixed costs in the economics of systems

We analyze industry equilibrium and incentive to compatibility when goods produced by different producers generate utility only when consumed as component parts of a system. We assume the presence of two systems, each composed of some basic component and a set of differentiated complementary products. The combination of complementarity between the two components of the system and of fixed costs in the production of the complementary product results in a form of network effect. We focus on the role played by the size of the fixed costs in the production of the complementary products in determining the size of this system effect and, by this means, the structure and types of equilibria that may be observed: monopolistic or duopolistic, symmetric or asymmetric. We also highlight the consequence of the same fixed costs for the private and social incentives to render the systems compatible.     

Eco-labels and product longevity: The case of whitefish in UK grocery retailing

In recent years, eco-labeling has become an increasingly used tool to signal sustainable sourcing of (sea-) food. While the literature has focused on price premiums associated with the labels, it is noted in this paper that eco-labels can also contribute to profitability by reducing cost, e.g. through longer product lifespans. Hence, eco-labels can be beneficial in a supply chain even without a price premium. This study applies duration analysis to explore whether two eco-labels (the MSC label of the Marine Stewardship Council and a line-caught label) influence product longevity of whitefish products in eight different grocery retailers in the UK. The results show that MSC labeled products have a 64.7% lower risk of being withdrawn from the shelves compared to non-MSC products, while products with the line-caught label have a 32.8% lower risk of being withdrawn than products without this label. The results also indicate that the influence of the eco-labels on product longevity vary considerably between the retailers.     

Customer engagement through omnichannel retailing: The effects of channel integration quality

While many retailers have turned to omnichannel retailing to remain competitive, engaging customers across channels has become one of the biggest challenges they face. Drawing on social exchange theory, we proposed and tested a research model of customer engagement in the context of omnichannel retailing. Structural equation modeling was employed to test the research model with customers of two emerging omnichannel retailers, Apple (n = 269) and Kroger (n = 221). The results showed that channel integration quality dimensions (including breadth of channel-service choice, transparency of channel-service configuration, content consistency, and process consistency) positively influenced customer engagement which in turn led to positive word-of-mouth and repurchase intention. The research model was examined using both high-involvement products (e.g., Apple) and low-involvement products (e.g., Kroger) despite the varying effects of channel integration quality on customer engagement. This study adds to the growing body of knowledge on customer engagement vis-à-vis omnichannel retailing and provides retailers with actionable insights into engaging customers across channels.     

Multi-sided platforms in B2B contexts: The role of affiliation costs and interdependencies in adoption decisions

Multi-sided platforms, enabling interactions between different user sides, hold an important place in the contemporary economy. Current literature, focusing on established and successful platforms, has neglected to study B2B multi-sided platform adoption mechanisms. In this article, we analyze these mechanisms by investigating the case of dematerialization platforms for B2B transactions between the multiple actors involved in public works contracts. Various qualitative materials, including 28 semi-structured interviews, were gathered over a thirty-month period. Adopting a business user perspective, this study contributes to the literature on multi-sided platforms in various ways. We show that platform adoption, in project-based B2B contexts, is mainly constrained by a high level of affiliation costs and the existence of tight-interdependencies between users' activities at project level. Thus, a consecutive adoption path would result in negative cross-group network externalities and undermine the platform's attractiveness. Conversely, a concurrent adoption path would activate positive network externalities and encourage platform adoption decisions.     

The effect of mergers on variety in grocery retailing

We study a merger between two Dutch supermarket chains to assess its effect on the depth as well as composition of assortment. We adopt a difference-in-differences strategy that exploits local variation in pre-merger competitive conditions and thus in the merger outcomes. To define our control group, we account for selection on observables through a matching procedure. We observe that, after the merger, the assortment of the merging parties converges in markets where they are not directly competing one with the other. Instead, the merging parties reposition their assortment to avoid cannibalization in the areas where they directly competed before the merger. While the target’s stores reduce the depth of their assortment when in direct competition with the acquirer’s, the latter increase their assortment. This suggests that variety is a strategic variable in retail chains’ response to changes in local competition.     

Multiproduct Outputs and Scale Economies in Electric Power Production: Some New Estimates

The present study offers an argument, through a technical exposition, which suggests that there are cost differences inherent in serving different types of buyers in the electric utilities industry. To this end, we employ a translog joint cost function (for electricity production) with three outputs, which allows for the examination of the cost differences between wholesale and retail trade for vertically integrated, investor-owned companies in the industry. The regression estimates suggest different costs at the means, however the estimated marginal cost curve for wholesale power is not as robust as those for low-voltage and industrial power.     

Integrating the consumer interest in food safety: the role of science and other factors2

Consumers are questioning the ability of the modern food system to provide safe food. This review of the use of monosodium glutamate (MSG), food irradiation, pesticide residues, and genetic engineering highlights the differences in views between public interest organisations, governments and industry associations and some of the reasons behind them. Whereas governments and industry generally support the adoption of new technologies, consumer organisations question the underlying need, which results in less willingness to accept the risks, even when they are small. Given that Uruguay Round of General Agreement on Tariffs and Trade (GATT) has made the recommendations of the Codex Alimentarius Commission the benchmark for food standards and that countries are allowed to adopt stricter standards only if they are scientifically justified, this review concludes that there is a need to better integrate the consumer interest at the international level.     

The impact of shopbot use on prices and price dispersion: Evidence from online book retailing

Internet price search tools, notably shopbots, have reduced consumers' search costs for price and product characteristics. While a variety of analytic models predict that increased consumer search will lower price levels among competing retailers, there is no consensus in the literature as to how price dispersion will change with increased consumer search. Moreover, there are no papers that have empirically tested these predictions using direct observation of variation in shopbot use over time.This paper examines the impact of changes in shopbot use over time on pricing behavior in the Internet book market. We do this by combining price and clickstream data collected from August 1999 to July 2001 — a period of rapid expansion in shopbot use. We find that a 1% increase in shopbot use is correlated with a $0.41 decrease in price levels and a 1.1% decrease in price dispersion.     

Mean-downside-risk and mean-variance newsvendor models: Implications for sustainable fashion retailing

Newsvendor models have been well-established for studying supply chain management problems with fashionable products. In this paper, we explore the mean-downside-risk (MDR) and mean-variance (MV) newsvendor models under both the exogenous and endogenous retail price decision cases. We first construct analytical models with the MDR and MV objectives. We then show that the analytical solution schemes for both the MDR and MV problems are the same. With the measures for sustainability such as the expected quantity of goods leftover, the expected sales to expected goods leftover ratio, the rate of return on investment, and the probability of achieving a pre-determined profit target, we proceed to compare the levels of sustainability by the fashion retailers which employ the mean-risk and the risk neutral models. Insights are generated.     

The role of CEO relative standing in acquisition behavior and CEO pay

In this study, we develop and test a theory of CEO relative pay standing. Specifically, we propose that CEOs with negative relative pay standing status (underpaid relative to comparison CEOs) will engage in acquisition activity, as a self‐interested means of attempting to realign their pay with that of their peers. We further propose that, when CEOs with negative relative pay standing acquire, they will tend to finance those acquisitions more heavily with stock than cash, to mitigate the risk associated with those deals. Finally, we argue that acquisition activity will partially mediate the influence of CEO negative relative pay standing on subsequent CEO compensation increases; however, that pay growth will come primarily in the form of long‐term incentive pay. Our results support our predictions. Copyright © 2014 John Wiley & Sons, Ltd.     

Management of hybrid organisations: a case study in retailing

Hybrid organisations present important theoretical and managerial opportunities. We examine a large Finnish multichain retail organisation in order to identify and understand the challenges of hybrids in a retailing context. We are especially interested in how these complex firms try to maintain a balance between the centralised corporate control and the local autonomy and initiative of their retailers. The governance forms and processes identified in the case organisation are discussed with the help of a proposed conceptual framework. We believe that the identified governance problems and practices in the three different retail chains and especially our recommendations will facilitate the understanding of retail hybrid organisations and the management of hybrids in general.     

How the interplay between consumer motivations and values influences organic food identity and behavior

This study develops a baseline model specifying expected relationships between consumer motivations (health, environmental, and social consciousness), organic food identity, and organic food behavior. Based on an online survey of 1176 Danish food consumers, we investigate whether these relationships are influenced by different levels of personal values (self-transcendence, openness to change, self-enhancement, and conservation). We find that health consciousness has a higher positive influence on organic food identity with higher levels of all four investigated personal values. When openness to change is low, health consciousness has a positive effect on intentional organic food behavior through organic food identity, whereas social consciousness has a negative effect on intentional organic food behavior through organic food identity. Our results provide guidance to those seeking to segment organic food markets based on consumers’ motivations and values.     

Surfing incognito: Welfare effects of anonymous shopping

This paper studies consumers’ incentives to hide their purchase histories when the seller’s prices depend on previous behavior. Through distinct channels, hiding both hinders and facilitates trade. Indeed, the social optimum involves hiding to some extent, yet not fully. Two opposing effects determine whether a consumer hides too much or too little: the first-period social gains are only partially internalized, and there is a private (socially irrelevant) second-period gain due to price differences. If the discount factor is large, the second effect dominates and there is socially excessive hiding. This result is reversed if the discount factor is small.     

Customer dissatisfaction and defection: The hidden costs of downsizing

Downsizing has been the subject of a good deal of research. Very little research, however, has examined the impact of downsizing on customers. Using a case study approach with a Fortune 100 company, we measured the attitudes, in a telephone survey, of 534 B2B service customers before a significant downsizing event and 994 customers afterwards. Our findings show that a significant downsizing event has an immediate and negative impact on customer satisfaction levels and on projected retention rates. This will lead to a direct, negative financial impact on the service provider due to a loss of expected future customer revenue. The lost revenue substantially offsets the short term labor cost savings from the downsizing.     

A multilevel analysis of the role of interactional justice in promoting knowledge-sharing behavior: The mediated role of organizational commitment

Knowledge sharing behavior has received increased attention in the context of business due to its important role in enhancing organizational competitive advantage. This study aimed to identify possible predictors of knowledge sharing behavior and its underlying mechanisms from a multilevel perspective. The results showed that interactional justice positively related to knowledge sharing behavior both at the individual and the team levels. And organizational commitment took a mediated role between them. This study is the first to highlight the role of organizational commitment and interactional justice in knowledge sharing behavior, enriching current understanding of organizational knowledge management and providing further suggestions as how managers can improve knowledge sharing behavior in their organizations.     

Telecommunications infrastructure competition: The costs of delay

This paper examines the experience of the USA, the UK and other OECD countries that introduced infrastructure competition, principally for long-distance telephone service, during the 1980s. The results show that competition has generally brought lower prices, greater variety of service, faster innovation, higher usage and productivity gains, and increased output both in telecommunications and in other sectors of the economy. The evidence is now convincing that the economic benefits from competition outweigh the highly visible costs and disruptions to established organizations and relations. Other countries can learn from the pioneers' experience to reduce the uncertainties and costs resulting from the transition to competition.     

Telecommunications pricing and consumer expectations : The case of alternate operator services

Traditional discussions of telecommunications pricing utilize microeconomic models that are often timeless. In reality, static models of price-based decision making in telecommunications do not capture an important reality: that the price feedback is substantially delayed. Since consumers have no immediate feedback on which to base rational decisions, they must utilize their expectations of price. This article analyses the implications of this, using the alternate operator services as a discussion case. This analysis shows that few alternatives beyond price regulation exist to resolve the rampant complaints in this industry.