Trust and the don't‐want‐to‐complain bias in peer‐to‐peer platform markets

This paper addresses peer‐to‐peer (P2P) digital platform markets, often associated with the “sharing economy” or the “collaborative economy”. Such digital platforms, facilitating new purchasing channels for consumers by matching P2P supply and demand, can be considered new market places challenging the conventional markets. How are P2P platform markets evaluated by the consumers? Based on a comprehensive survey‐data material, five different P2P service markets are considered by peer buyers and the results compared to consumers’ evaluations from similar conventional service markets according to trust, comparability and consumers’ satisfaction with the transactions. Comparability seems to be one advantage for the platform markets, while trust could become a problem. Conditions for trust in P2P platform markets is particularly interesting to study because contrary to conventional markets P2P transactions cannot rely on governmental laws, regulations and security net. This trust problem has been solved by a trust‐generating rate and review system. Our data material, however, distinguishes a mechanism that we have coined as the don't‐want‐to‐complain bias. More precisely, people do not like to complain, hence buyers of P2P services often hesitate to give negative ratings when they are discontent with a service or a supplier. Therefore, positive ratings become overestimated. If consumers recognize this bias, ratings and reviews will lose credibility and no longer be considered trustworthy. Eventually, this may threaten the well‐functioning of P2P markets.     

Message‐to‐person versus person‐to‐message: An alternative way to conceptualize personalized advertising

This study provides an alternative way to conceptualize personalized advertising and discusses when and why nonpersonalized information can be more effective than personalized information in changing people's attitudes and behavioral intentions. Different from the traditional personalization approach in the literature that personalizes a message for an individual, this alternative way of thinking is to personalize an individual for a message. It is argued that an individual can be personalized for a message via priming tactics and it leads to reverse personalization effects where a nonpersonalized message generates stronger persuasion effects than a personalized message. The effects of priming on personalization are moderated by perceived prime credibility and mediated by perceived message relevance.     

A Reconsideration of Rent‐to‐Own

Rent‐to‐own agreements (RTO) are traditionally seen as disguised installment contracts imposed on uninformed consumers at usurious interest rates. After the flaws and omissions in these interest rate calculations are addressed, the implied annual percentage rates (APRs) remain extraordinarily high. It is shown that alternatives to RTO, such as layaway and long‐term rental, yield comparable APRs. The appeal of rent‐to‐own is then attributed to its structure that includes an initial pure rental phase of high value to persons in volatile financial and/or personal situations followed by an installment phase. Should these situations be resolved, the consumer exercises an imbedded option to acquire a perhaps otherwise unobtainable installment agreement at a competitive interest rate.     

Futures hedging under mark‐to‐market risk

This article introduces mark‐to‐market risk into the conventional futures hedging framework. It is shown that a hedger concerned with maximum daily loss will considerably reduce his futures position when the risk is taken into account. In case of a moderate hedge horizon, the hedger will hedge approximately 80% of his spot position. The effect of mark‐to‐market risk decreases very slowly as the hedge horizon increases. If the hedger is concerned with average daily loss, the effect is minimal for a moderate hedge horizon. © 2003 Wiley Periodicals, Inc. Jrl Fut Mark 23:389–398, 2003     

Attachment orientations in business‐to‐business relationships

Attachment theory has produced an impressive body of evidence for explaining individual differences in personal relationship behavior. The current study examines whether attachment theory can be fruitfully extended to business‐to‐business relationships. Hypotheses about the impact of personal attachment orientations on key relationship constructs are developed and empirically tested in two business‐to‐business relationships. Customers who are securely attached in their personal relationships with their romantic partners experience higher levels of satisfaction, trust, and repurchase intent in their business‐to‐business relationships. In addition, an attachment scale that is specifically tailored for a business‐to‐business context is developed. Two dimensions of business attachment are empirically derived: secure business attachment measures the ability and willingness to rely on the business partner, and close business attachment measures the desire to develop personal bonds with a business partner or its employees. The two business attachment dimensions can be used to segment customers with respect to their intrinsic retainability and their preference for personal bonding with their business partners. © 2009 Wiley Periodicals, Inc.     

Rent‐to‐Own Pricing: Theory and Empirical Evidence

The rent‐to‐own (RTO) industry given its emphasis on subprime or, at least, financially constrained consumers is often seen as exploitative with excessive financing costs. This paper develops a rational‐expectations competitive equilibrium model to explore the pricing mechanism of an RTO agreement. The model accounts for the contract's embedded options and several bundled services. Using detailed transactional data, we infer how customers exercise these options to calibrate our model for several product categories, contractual lengths and payment periodicity. The resulting predictions provide a justification for the high financing costs observed in the marketplace.     

Commodity trading advisors' leverage and reported margin‐to‐equity ratios

We investigate the effect of leverage on Commodity Trading Advisors' (CTAs) performance measurement. We find that leverage has important effects on the cross section of CTA returns, volatility, and survival experience. On average, a 100‐basis points increase in leverage is associated with a 27‐basis points increase in returns. After performance is adjusted for leverage, volatility, and survival experience, CTAs' style variables have no significant effect on performance. The amount of leverage used by a CTA is found to reduce the likelihood of survival. However, the total effect of leverage on survival is much smaller than its partial effect. Contrary to common beliefs, we find that CTA diversification leads to higher levels of leverage and volatility. This apparent contradiction is related to how the diversification process affects the use of leverage. The findings in this study have implications for measuring and comparing managers' performance track records. © 2003 Wiley Periodicals, Inc. Jrl Fut Mark 23:1003–1017, 2003     

Borrowing Capacity and Financial Decisions of Low‐to‐Moderate Income First‐Time Homebuyers

This study documents the extent to which first‐time homebuyers seeking a mortgage accurately estimate their borrowing capacity and how this is associated with their decisions regarding mortgage debt and the take‐up of a free offer of financial coaching. We find that consumers who underestimate their nonmortgage debt (31.5% of the sample) also take out larger mortgages relative to income. Consumers who underestimate or overestimate their total debt as well as their monthly debt payments are more likely to accept the offer of financial coaching. Moreover, overconfidence in financial matters reduces the take‐up of financial coaching. These biases in perceived financial status appear to be systematically related to behavior among a group of relatively inexperienced consumers. These findings suggest that efforts to extend homeownership may need to include debiasing mechanisms to help less informed consumers accurately assess their current debt levels and ability to make ongoing mortgage payments.     

Consumer responses to gift receipt in business‐to‐consumer contexts

This article delineates business‐to‐consumer from consumer‐toconsumer and business‐to‐business gift giving, and discusses the influence of gift, recipient, and giver characteristics on gift evaluation and reciprocation likelihood in business‐to‐consumer contexts. A study examines the impact of relationship strength, gift value, nature of request, and recipient gender on gift evaluation, reciprocation likelihood, and future store choice. A stronger relationship with the business and an implicit request for reciprocation affect consumer responses to business‐to‐consumer gifts positively. Gift value and recipient gender did not have a significant effect on outcome variables. © 2005 Wiley Periodicals, Inc.     

Organic consumers’ preferences and willingness‐to‐pay for locally produced animal products

In Germany, a large share of organic animal products is being produced with imported protein feedstuffs. Products labelled as ‘local’ are also often produced with imported feed. At the point of purchase, animal products are not usually labelled with any information on the feed that was used to produce it. Therefore, it remains unclear what consumers think about the use of imported feed, in particular in the case of products labelled as ‘local’. The aim of the present research study was to analyse whether the use of local feed represents an option for successful product differentiation in the organic animal products market. Discrete Choice Experiments and computer assisted personal interviews were conducted with 597 organic consumers in Germany to investigate their preferences and willingness‐to‐pay for local organic animal products produced with local feed. The choice experiments revealed a strong preference for local feed. The outcome of our investigation also shows that the provision of information on feed imports into Germany can be an important tool for promoting organic animal products produced with local feed. The results suggest the use of local feed could be an option for successful product differentiation in the organic animal products market, especially if effort is put into raising consumer awareness of current organic feed importation practices.     

Impact of directed‐to‐consumers marketing strategies on firm market value

The objective of this paper is to analyse the impact of different directed‐to‐consumers marketing strategies on firm market value. To that end, we follow a microeconometric approach that consists of formulating a model whose dependent variable is an indicator of market value, that is to say, Tobin's Q, whilst the independent variables take the form of a number of different marketing strategies. This model is estimated by using an unbiased survey carried out in the year 2000 to executives working in 405 North‐American firms. The empirical results indicate that the most effective marketing strategies are, in this order, the ability to rapidly develop new products and services, the importance of both providing customized products and goods of high quality and finally, customer loyalty.     

The Evolution of the Credit‐to‐GDP Ratio: An Empirical Analysis

We assess the persistence of the credit‐to‐GDP ratio over more than 130 years of data for 11 advanced economies, employing an approach based on fractional integration and allowing for nonlinearities. We show how the time series properties of the data changed around World War II (WWII). Moreover, our findings are consistent with the idea that the supply of mortgage loans has been particularly strong since WWII, in the sense that the degree of integration of the leverage ratio obtained with only these loans is larger than that of the ratio obtained with the total loans for almost all the studied countries. Nevertheless, it is generally the case that both types of ratios show a higher degree of integration after WWII than before it, though often insignificantly, and that their time trends are significant only after WWII.     

Heuristics in Mutual Fund Consumers' Willingness‐to‐Invest: An Experimental Approach

This paper improves the understanding of heuristics in the choice of mutual funds. We analyze the effect of price‐quality relationship and anchors as heuristics on the evaluation of the willingness‐to‐invest. We perform two studies with graduate students who possess a medium–high level of financial literacy in Chile. In the first study, we find that willingness‐to‐invest increases (decreases) when subjects observe (do not observe) in the market a positive relationship between expense ratios (price) and service quality. In the second study, in the presence of an anchor, the reference price obtained by individuals from the market information loses relevance and the anchor effect predominates. Our results confirm that participants, as consumers of financial services, apply heuristics as groundwork for their investment decisions. These heuristics as a decision making process are useful but do not always lead to the choice of the lowest cost alternative with the highest possible service quality.     

Wealth‐to‐Income Ratio and Stock Market Movements: Evidence from a Nonparametric Causality Test

We use a nonparametric causality‐in‐quantile test to analyze the predictive ability of the wealth‐to‐income ratio (wy) for excess stock returns and their volatility. Our results reveal that the wy is nonlinearly related with excess stock returns, and hence, results from linear Granger causality tests cannot be deemed robust. When we apply the nonparametric causality‐in‐quantile test, we find that the wy can predict excess stock returns over the majority of the conditional distribution, with the exception being the extreme ends, that is, when the market is in deep bear or bull phases. However, the wy has no predictability for the volatility of excess stock returns.     

Distribution Channel Relational Cohesion Exchange Model: A Small‐to‐Medium Enterprise Manufacturer's Perspective

This study investigated the influence of dealers' expert, referent, and legitimate sources of power on small‐to‐medium enterprise manufacturers' relationship commitment in distribution channel systems. A theoretical model drawing on the relational cohesion theory and the extant marketing literature is developed and tested empirically using a sample data set of 452 from Zimbabwe. In this model, expert, referent, and legitimate powers are the predictors, whereas trust, cooperation, and relationship satisfaction are the mediators, and relationship commitment is the outcome variable. Analysis reveals that these three powers positively influence the mediators and outcome variable in a significant way, except for legitimate power to cooperation relationship. Managerial implications and future studies are suggested.     

Vertical differentiation in oligopoly and license fees when outside innovator can enter the market: Two‐step auction

When an outside innovating firm has a technology to produce a higher quality good than the good produced at present, it can sell licenses of its technology to incumbent firms, or enter the market and at the same time sell licenses, or enter the market without license. We examine the definitions of license fee in such a situation in an oligopoly with three firms under vertical product differentiation, one outside innovating firm and two incumbent firms, considering threat by entry of the innovating firm using a two‐step auction. We show that in the case of uniform distribution of consumers' taste parameter and zero cost when the quality improvement (the difference between the quality of the high‐quality good and the quality of the low‐quality good) is small (or large), the two‐step auction is (or is not) credible, and license to two firms without entry strategy (or entry without license strategy) is optimal depending on credibility of the two‐step auction.     

Consumer evaluations of brand extension: The roles of case‐based reminding on brand‐to‐brand similarity

Utilizing the case‐based reminding theory in analogical reasoning, this research proposes that the evaluation of a brand extension can be improved by reminding consumers of a similar brand in the extension category. This effect is derived from a brand‐to‐brand similarity, in addition to the product‐to‐product and brand‐to‐product similarity identified in prior literature. Experiment 1 explores the idea that the effect of similar case reminders is most pronounced in moderately similar extensions than in highly similar or highly dissimilar extensions due to schema congruity. Experiments 2 and 3 distinguish the levels of similarity (i.e., product‐to‐product, brand‐to‐product, and brand‐to‐brand similarity) as a source of consumers' evaluations on a brand extension and further eliminate an alternative explanation of instantaneous learning in the advertisement setup of Experiment 1. © 2010 Wiley Periodicals, Inc.     

Business‐to‐Business Branding: A Review and Assessment of the Impact of Non‐Attribute‐Based Brand Beliefs on Buyer's Attitudinal Loyalty

Business‐to‐business branding has received increasing attention from researchers in the last few years. Nonetheless, there is no agreement on the relative contribution of a brand versus an offering's functional attributes to the industrial buyer's preferences. Drawing on models from the business‐to‐consumer context, this paper demonstrates that non‐attribute‒based brand beliefs are predictors of hedonic outcomes as measured by industrial buyers' attitudinal loyalty, while attribute‐based brand beliefs are not. Moreover, the moderating role of the buyer's level of knowledge for the value‐generating process is identified, suggesting that the impact of non‐attribute‒based brand beliefs on attitudinal loyalty is greater for buyers with a low level of knowledge. Copyright © 2012 ASAC. Published by John Wiley & Sons, Ltd.