When less is more? The contingent effect of product supply limitation in the release of new electronic products

In the market of consumer electronics, firms often limit their product supply to create a scarcity effect to entice consumers to buy their product. However, the outcome of such a strategy is not always desirable. In this study, we propose the product configuration level as a contingent variable that works with the supply level to affect the outcome of a supply limitation strategy. With a vignette-based experiment, we find that for a product with a superior configuration, consumers' purchase intention is boosted only if the supply is very limited. For a product with an inferior configuration, however, the supply limitation strategy does not work at any supply level. Therefore, the supply limitation strategy works only for a superior product configuration and at a fine-tuned supply level.     

Tax evasion and financial repression

Using a simple overlapping generations framework, calibrated to four Southern European countries, we analyze the relationship between tax evasion, determined endogenously, and financial repression. We show that higher degree of tax evasion within a country, resulting from a higher level of corruption and a lower penalty rate, yields higher degrees of financial repression as a social optimum. However, a higher degree of tax evasion, due to a lower tax rate, reduces the severity of the financial restriction.     

The separateness-connectedness self-schema: Scale development and application to message construction

Two studies were conducted to assess separateness-connectedness (SC) as a new message variable and as a new individual difference variable in advertising. Study I began the process of developing a Separateness-Connectedness scale based on a sample of 140 college students (97 Westerners and 43 non-Westerners, 81 males and 59 females) attending a midwestern university. The 9-item, 2-factor scale revealed good reliability and construct validity. The structure of the overall model was then successfully tested on a new sample by confirmatory factor analysis. In Study II an experiment assessed whether the separateness/connectedness self-schema would moderate the effect of using either a connected or a separated advertising appeal on consumers' attitude toward the ad. As predicted, a significant interaction effect was found. The results revealed that individuals with a separate self-schema preferred a separated advertising theme, and individuals with a connected self-schema preferred a connected advertising theme. Implications for advertising managers, the studies' limitations, and future research directions are also discussed. © 1997 John Wiley & Sons, Inc.     

A Progressive Search for a Group Ranking with Robust Conclusions on Prudent Orders

We consider the problem where rankings, provided for instance by a group of evaluators, have to be combined into a common group ranking. In such a context, Arrow and Raynaud suggested that the compromise ranking should be a prudent order. In general, a prudent order is not unique. That is why, we propose to manage this possible multiplicity of compromise solutions by computing robust conclusions. This allows for a progressive refinement of the decision model and supports the group to eventually select one group ranking. The approach is illustrated on a problem where a group of junior researchers has to agree on a ranking of research domains.     

CONVEX RISK MEASURES FOR GOOD DEAL BOUNDS

We study convex risk measures describing the upper and lower bounds of a good deal bound, which is a subinterval of a no‐arbitrage pricing bound. We call such a convex risk measure a good deal valuation and give a set of equivalent conditions for its existence in terms of market. A good deal valuation is characterized by several equivalent properties and in particular, we see that a convex risk measure is a good deal valuation only if it is given as a risk indifference price. An application to shortfall risk measure is given. In addition, we show that the no‐free‐lunch (NFL) condition is equivalent to the existence of a relevant convex risk measure, which is a good deal valuation. The relevance turns out to be a condition for a good deal valuation to be reasonable. Further, we investigate conditions under which any good deal valuation is relevant.     

Firms’ export decisions—fixed trade costs and the size of the export market

This article presents a model of international trade under monopolistic competition. In the increasing returns sector firms face fixed, in addition to variable, trade costs, and both exporters and non-exporters may coexist. Exporters benefit from access to large foreign markets, thus a small country has a higher share of exporting firms than a large one. In contrast to standard models, the increasing returns sector will be more open in a small country than in a large one, and a small country may be a net exporter of such commodities, despite the disadvantage of a smaller home market.     

Technological advantage,alliances with customers,local knowledge and competitor identification

Research typically studies competitor identification in stable markets and seldom considers possible antecedents in a dynamic context. To address this situation, this study combines a relational view, a capability-based approach, and a managerial cognition view to predict competitor identification. The hypotheses concern how a firm's customer ties, technological advantage, their interaction, and top manager's local knowledge influence competitor identification. Using a sample of 1348 firms across manufacturing and servicing sectors in China, we find that strong customer ties have a positive impact on competitor identification, firm-specific technological advantage has a negative impact, and the interaction of the two positively relates to competitor identification as does having greater local knowledge. These results suggest that a relational view, a capability-based view and a managerial cognition view complement one another in determining competitor identification in a dynamic environment.     

Using the Pack‐and‐a‐Half Rule to Eliminate Backroom Inventories in Retail Operations

In the retail industry, backroom inventories are typically associated with higher labor costs and greater operational complexity. Thus, retailers look for ways to eliminate backroom inventories. A heuristic used for this purpose is the pack‐and‐a‐half rule which suggests that the shelf space allocated for a product should be at least 50% larger than the case pack quantity in which the product is delivered. Despite its popularity among retailers, the pack‐and‐a‐half rule has been ignored in the academic literature. We introduce the pack‐and‐a‐half rule, assess its impact on a retailer's profits, identify cost, demand, and product characteristics driving this impact, and propose a modification. Based on an analysis of data obtained from a retailer on 1,986 SKUs in 20 categories, we find that the pack‐and‐a‐half rule decreases a retailer's profits, on average, by 10% when applied uniformly across all SKUs. Further, this decrease is significantly affected by product depth, product width, demand elasticity, case pack quantity, and inventory carrying cost. Finally, we develop a set of modifications based on these variables where the pack‐and‐a‐half rule is applied selectively and in a stepwise fashion. These modifications limit the decrease in a retailer's profits to a range between 6% and 7%.     

How to protect your premium product from low-price competitors: Price,quality, or portfolio adjustment?

In a game-theoretic framework, I analyze how a brand manufacturer can thwart new entrants into its market. Three strategic options are considered, a price adjustment of the premium product, a quality adjustment of the premium product and a portfolio adjustment of adding a fighter brand. In a basic setup, I show that the incumbent's best response to entry is to choose a portfolio adjustment. If, however, the incumbent is uncertain about whether the rival firm will enter the market, a price adjustment of the premium product might be the better alternative if launching the fighter brand is associated with costs. Moreover, if technological progress improves the efficiency of product development, a combined quality and portfolio adjustment might be the best alternative for the incumbent.     

Price and quality decisions in a vertically-differentiated supply chain with an “Online-to-Store” channel

Because of the prevalence of “Online-to-Store (OS)” channel, customers can purchase differentiated products online and pick up in-store. We develop a Stackelberg game-theoretic model to study the impact of an OS channel on quality levels, demands, prices, and profits of a manufacturer and a retailer in a supply chain. We assume that the retailer acts as a Stackelberg leader, and the manufacturer acts as a Stackelberg follower. The manufacturer produces and sells two products with vertically-differentiated quality levels to the retailer who in turn sells the products to customers through a Store channel, an Online channel, or an OS channel. The retailer incurs a handing cost if the OS channel is available, and consumers bear a shipping cost and a transaction cost when the products are purchased from the Online and Store channels, respectively. We find that the manufacturer should reduce both products’ quality levels and wholesale prices, whereas the retailer can increase the selling prices for a relatively small shipping cost and a not too small handling cost. When the products are available both online and in-store, however, the quality levels, wholesale prices and selling prices might increase for a small shipping cost and a not too small handling cost. Compared to the case in which both products are available online only with the OS channel, adding the Store channel is always beneficial for both parties. The intuition behind these results hinges on the trade-off between the handling cost and the increased market demand for the retailer. Moreover, the quality levels, the wholesale prices of both products, and the selling price of the low-quality product would decrease, while the selling price of the high-quality product increases for a sufficiently low transaction cost and a not too small shipping cost.     

Systematic ESG exposure and stock returns: Evidence from the United States during the 1991–2019 period

Using a sample of US stocks over the period 1991–2019, we test whether stocks with high exposure to a social index exhibit high returns. Using a univariate analysis, our in-sample results show that stocks with high sensitivities to the MSCI KLD 400 Social Index underperform stocks with low sensitivities by an annual risk-adjusted performance of 7.02%. The negative premium is also larger in the post-crisis period of 2007–2019 and is equal to 10.25%. The out-of-sample results offer, however, only weak evidence of such a finding, with a risk-adjusted performance difference of merely −0.84% over the full sample period and no significant differences between the pre-crisis and post-crisis periods. In the multivariate regression, we find evidence of a negative relationship between exposure to the social index and stock performance. Moreover, we find that stocks with high exposure to the social index display a low corporate social responsibility score, a high Tobin’s Q, high long-term debt, a large size, high total risk, a high market beta, a high SMB coefficient, a low HML coefficient, and a small MOM coefficient.     

Market orientation, competitive advantage, and performance: A demand-based perspective

This study assesses how customer value affects a firm's market orientation and consequently, competitive advantage and organizational performance in a service industry — the global hotel industry. The findings show that if a firm perceives its customers as valuing service, the firm is more likely to adopt both a customer and a competitor orientation; if the firm thinks its customers are price sensitive, the firm tends to develop a competitor orientation. Moreover, the greater a firm's customer orientation, the more the firm is able to develop a competitive advantage based on innovation and market differentiation. In contrast, a competitor orientation has a negative effect on a firm's market differentiation advantage. Finally, innovation and market differentiation advantages lead to greater market performance (e.g., perceived quality, customer satisfaction) and in turn, higher financial performance (e.g., profit, market share).     

Revisiting the Concept of a Societal Orientation: Conceptualization and Delineation

Marketers have traditionally evaluated products and practices on the basis of whether something could be sold. It is also important to evaluate products and practices from a societal perspective, “Should a product be sold?” The first idea reflects a managerial orientation and what must be done to sell a product; the second idea reflects a societal orientation and the impact of selling a product. In relation to the second idea, the societal marketing concept was introduced in 1972. There has been little advancement in our understanding of a societal orientation since that time. The current study presents a conceptualization of a societal orientation based on a review of literature and qualitative interviews. The construct was conceptualized as “attention to the long-term well-being of individuals and society at large by enhancing positive impacts from and reducing negative effects associated with production and consumption of a product.” Five domains comprising a societal orientation are proposed: physical consequences, psychological well-being, social relationships, economic contribution, and environmental consciousness.     

THE CONSUMER AND FOREIGN EXCHANGE RATES

Whether you are a business person, a tourist, or a consumer, you are affected by foreign exchange rates. Quite often a person feels that foreign exchange rates are too complex to understand. The following is a simplified explanation of foreign exchange rates, touching on factors, which influence the rates. A brief history, the spot and forward market, and monetary policy is also covered. It is hoped this approach will give a better understanding of a subject that is often presented in a very complex way.     

Fiscal Policy,Chartal Money,Mark‐up Dynamics and Unemployment Insurance in a Model of Growth and Distribution

Given one parameter restriction, an output‐stabilization rule for the provision of public services turns a Kaldor–Kalecki–Steindl growth model with unstable, catastrophe‐prone dynamics into one with a stable limit cycle. In contrast, using a budget‐balancing rule produces a saddle point, along with closed orbits near the boundaries of the state space. Adding Kaleckian mark‐up dynamics destabilizes the equilibrium, with a spiraling path followed by a spin‐out found in simulation. A final exercise establishes the possibility of adding a variable workforce and a public unemployment insurance system. Throughout, an identity governs the dynamics of the stocks of public financial liabilities.     

Fertility,intergenerational transfers and economic development

This paper develops a model of endogenous growth where agents are altruistic and value both the utilities of their parent and of their children. Individuals endogenously choose the number of their children, and arbitrate between financing education, leaving them some bequest and offering some gift to their parents. We establish the existence of three types of long run regime. Starting from a low level of human capital, an economy converges towards a stationary state associated with a constant output per worker, a high level of fertility and ascendant transfers. If the initial level of human capital is not too low, another stationary state jointly exists with a lower level of fertility and no transfer. Finally, starting from a high level of human capital, the economy experiences a steady growth of output per worker associated with a low fertility level and descendant transfers. We then assume that an economy is initially in the stationary underdevelopment regime with ascendant transfers, and we study the power of different policies to push the economy toward the growth regime. We successively consider a fertility control policy, an education subsidies policy, and the introduction of a pension system for the elderly.     

Happily Ever After: How Ending Valence Influences Narrative Persuasion in Cautionary Stories

Narratives are a persuasive platform that evokes processing distinct from other message formats. Story-ending valence is a component common to all stories and can influence how individuals respond to and are persuaded by the story. The current work examines how ending valence of a cautionary story, a popular type of narrative that delivers a warning to the audience, influences story-consistent beliefs through a process of global reflection or understanding of the overall story message. Across three studies, we find a positive story ending enhances reflection on the message meaning and, subsequently, enhances story-consistent beliefs.     

Community differences in business births and business growths

The published literature relating to the location of a business tends to support two different kinds of theories: (1) that business locations are selected to minimize costs; or (2) that decision-makers select locations because of personal preferences. This study attempts to find explanations as to why certain communities have grown faster than others, and to provide a model for the location decision of a start-up business.We find a negative correlation of two entrepreneurship measures to environmental factors that are usually considered to be desirable, i.e., health care and the environment, climate and terrain, recreation, and low crime. We find a weak correlation between community attitudes and the entrepreneurship measures. We also find a positive correlation of entrepreneurship with a high number of college graduates; a negative correlation when a high proportion of the population is over age 65.Population mobility and low unemployment are also positively correlated with the measures, but those factors seem at least as likely to be results as to be causes of business births and business growth.We believe that start-ups are vital for any community that wishes to grow, therefore the location decision of start-up businesses seems important. We propose a model of the location decision of a start-up, a model that emphasizes the individuality of the decision maker and the specific success requirements of the business. The driving force behind a start-up can be a decision-maker's desire for personal gain, a problem that begs a solution, or a solution that is looking for a problem. In some cases, the reason for starting a business will dictate its location. In other cases, success requirements of the business will dominate. We believe that researchers can gain a true understanding of the location decision only by considering both the preference of the decision-maker and the requirements of the specific business.     

Autotelic need for touch,haptics, and persuasion: The role of involvement

Previous research has shown that a touch or haptic element attached to a persuasive appeal can increase persuasion, particularly for individuals who have a clear preference for touch to enjoy its sensory feedback (high autotelics). This research extends previous work by including involvement in the context of an appeal by a nonprofit. We find, in an experiment where we manipulate involvement, that when a haptic element is present, high autotelics are more persuaded regardless of their involvement with the message. However, for low autotelics, a haptic element increases persuasion under conditions of low versus high involvement with the message. A second experiment measures involvement and finds that again, under low involvement conditions, both high and low autotelics are persuaded by a touch element. Finally, a field study with a local symphony orchestra is conducted in which involvement with the message is low but involvement with the company is high. In this case, a touch element is only persuasive for high autotelics. © 2011 Wiley Periodicals, Inc.