How Do Switching Costs Affect Market Concentration and Prices in Network Industries?

I investigate the effects of switching costs on the market outcome in network industries using a dynamic duopoly model of price competition in the presence of an outside option. I find that the role of switching costs depends on network effects and the outside option. Without a viable outside option, high switching costs can neutralize the tendency towards high market concentration associated with network effects, but with a viable outside option, switching costs increase market concentration. Furthermore, switching costs lower prices if network effects are modest and there exists a viable outside option, but generally raise prices otherwise.     

Methodological Issues in the Design of Online Surveys for Measuring Unethical Work Behavior: Recommendations on the Basis of a Split-Ballot Experiment

In recent years, there has been an increasing interest in unethical work behavior. Several types of survey instruments to collect information about unethical work behavior are available. Nevertheless, to date little attention has been paid to design issues of those surveys. There are, however, several important problems that may influence reliability and validity of questionnaire data on the topic, such as social desirability bias. This paper addresses two important issues in the design of online surveys on unethical work behavior: the response scale for questions regarding the frequency of certain types of unethical work behavior and the location of the background questions in an online survey. We present the results of an analysis of a double split-ballot experiment in a large sample (n = 3,386) on governmental integrity. We found that, when comparing response scales that have labels for all categories with response scales that only have anchors at the end, the latter provided answers with higher validity. The study did not provide support for the conventional practice of asking background questions at the end.     

“Handle with care”: The mediating role of schedule i‐deals in the relationship between supervisors' own caregiving responsibilities and employee outcomes

Drawing on theories of perspective‐taking and i‐deals, this study explores the impact of supervisors' own caregiving responsibilities for elders and parental status on subordinates' schedule i‐deals. Moreover, we investigate the extent to which schedule i‐deals mediate the relationship between supervisors' caregiving responsibilities and two employee outcomes: satisfaction with work–family balance and turnover intentions. Using a sample of 520 dyads involving 137 supervisors and 520 employees, the results of multilevel analysis show that supervisors' caregiving responsibilities for elders is positively related to schedule i‐deals, but their parental status is not. The findings also show that schedule i‐deals mediate the effect of supervisors' caregiving responsibilities for elders on subordinates' satisfaction with work–family balance and turnover intentions. This research contributes to the i‐deals' literature by focusing on the role of managers' own caregiving responsibilities in facilitating the provision of schedule i‐deals to their subordinates and by exploring the consequences of schedule i‐deals to gain an understanding of the mutually beneficial nature of such deals. From a practical point of view, supervisors and HR departments might utilise schedule i‐deals to drive desirable employee outcomes, in particular their caregiving responsibilities, and to engender a family‐supportive organisational culture.     

Are conservative approaches to new product selling a blessing in disguise?

A new product’s success in the marketplace largely depends on salesforce actions. Many B2B salespeople display conservatism when confronted with new products in their portfolio, such that they maximize their efforts to sell existing products before engaging in efforts to sell the new product. So far, it is unclear whether this conservative selling behavior (CSB) is harmful to new product selling performance, and how this behavior can be managed. Building on perceived risk processing theory, and employing multi-level structural equation modeling on a multi-source dataset, the authors empirically substantiate that salespeople’s CSB makes their effort to sell new products more effective. Remarkably, such effort is then valued less by sales managers. The authors also find that CSB is a result of a risk assessment and evaluation process, in which internal marketing efforts (i.e., providing salespeople with information on the new product) determine the weight of perceived performance risk (i.e., new product radicalness), social risk (i.e., managerial new product orientation), and financial risk (i.e., long-term rewards). Managers looking to control the levels of CSB in their salesforce should carefully align their information support activities with the perceived risk dimensions of the new product selling situation.     

Response to "The One-Way Mirror"

The variable, place attachment, has recently been used by investigators to assist in understanding visitor responses to fee programs on public lands. This paper examines the relationship between place attachment (i.e., place identity and place dependence), attitudes toward paying fees, and visitor preferences for spending fee revenue within the context of social judgment theory. It was hypothesized that both place dependence and place identity would moderate the relationship between recreationists' attitudes toward the site's fee program and visitor support for spending revenue generated by the fee program in the areas of facilities and service development, environmental protection, and environmental education. Data were collected at Mono Basin Scenic Area over the summer of 1998. Results indicated that only place identity was a statistically significant moderator, such that it magnified the relationship between recreationists' attitudes toward the fee program and spending support. As place identity increased and recreationists' attitudes toward the fee program became more positive, support for spending fee revenue also increased. Practical and theoretical implications are discussed.     

Role of Information on Consumers’ Willingness‐to‐pay for Genetically‐modified Rice with Health Benefits: An Application to China

Despite their potential health benefits, the controversial nature surrounding the use of GM technology in biofortified crops remains a subject of discussion. This paper investigates the role of information on willingness‐to‐pay for folate‐biofortified rice in a Chinese folate‐deficient region. We conducted second price auctions with 252 women of childbearing age, split up into two target groups based on street (n = 132, non‐student sample) or school auctions (n = 120, student sample). Notwithstanding a general positive effect of folate‐related information (i.e. content, benefits and regional situation), evidence reveals that the non‐student sample is less concerned about GM technology. The results also provide insight into serial position effects in conflicting GM information. Whereas participants in the non‐student sample are more prone to a primacy bias when receiving both positive and negative information, an alarmist reaction is observed in the student sample. This study highlights the need for segmented, targeted communication strategies on biofortification.     

Stochastic Cooperative Games: Superadditivity, Convexity, and Certainty Equivalents

This paper extends the notions of superadditivity and convexity to stochastic cooperative games. It is shown that convex games are superadditive and have nonempty cores, and that these results also hold in the context of NTU games. Furthermore, a subclass of stochastic cooperative games to which one can associate a deterministic cooperative game is considered. It is shown that such a stochastic cooperative game satisfies properties like nonemptiness of the core, superadditivity, and convexity if and only if the corresponding deterministic game satisfies these properties.Journal of Economic LiteratureClassification Number: C71.     

Exploring a theoretical framework to structure the public policy implications of open innovation

Open innovation is increasingly popular among practitioners and scholars, but its implications for public policy making have not yet been analysed in detail. This paper explores a theoretical framework to structure the debate about public policy making that facilitates open innovation. We first define open innovation in terms of firms’ open innovation practices and external conditions that encourage enterprises to practice open innovation. We show that policies for open innovation are legitimate as traditional arguments like market and system failures continue to apply. Next, we identify several guidelines for policymaking. Rather than just offering R&D and interaction-oriented policies, we conclude that open innovation warrants attention in a broader range of policy areas, including entrepreneurship, education, science, labour markets and competition. Developing truly horizontal policies is a major challenge to facilitate open innovation in developed economies.     

On the empirical distribution of the Balassa index

On the Empirical Distribution of the Balassa Index. — The concept of revealed comparative advantage as measured by the Balassa index is widely used in practice to determine a country’s weak and strong sectors. Interpreting the Balassa index is difficult, however, in view of the limited knowledge to date on the distribution of this index. We analyze theempirical distribution of the Balassa index and its stability and properties over time, using Japan-European Union trade data. It appears that the distribution is relatively stable over time and that the widely used rule that “a Balassa index above one” identifies a strong sector, selects about one-third of all industries. On the other hand, the distribution appears to differ markedly across countries.