Exploring word‐of‐mouth influences on travel decisions: friends and relatives vs. other travellers

Travel research consistently shows the importance of word‐of‐mouth (WOM) information sources in the travel decision‐making process. Friends and relatives have been identified as organic image‐formation agents, and it has been emphasized that this WOM information is one of the most relied‐upon sources of information for destination selection. While there has been recognition of the importance of WOM information sources on consumer behaviour in tourism, little has been performed to understand more specifically how and what behaviour is influenced. This study examined the differing influences of friends and relatives vs. other travellers on the travel choices and behaviours of 412 visitors to the North Queensland Region in Australia. More specifically, the present study compared the following four groups of respondents: those who indicated that they obtained travel information from friends/relatives and other travellers (n = 70); those who obtained information from friends/relatives only (n = 121); those who obtained information from other travellers only (n = 105); and those who obtained information from neither (i.e. no WOM) (n = 116). The results indicated that there were significant differences across the four groups with respect to demographic characteristics, other information sources used, accommodation and transportation used, and travel activities in the destination. However, the groups did not differ in their image of the destination.     

Effects of game‐product congruity on in‐app interstitial advertising and the moderation of media‐context factors

Advertising has become one of the major sources of game apps revenues and interstitial ads, in particular, are the most used monetization method among the types of in‐game mobile ad formats. Interstitial ads overlaid on top of a mobile game app have more obvious advertising intent and a higher degree of forced exposure and perceived intrusiveness. This study examined how the degree of congruity (high vs. moderate vs. low) between the promoted products in interstitial ads and the mobile game app environment affects consumers’ responses. The moderating effects of media‐context factors (i.e., excited– or calm–happiness game types and game immersion) were further assessed. The results of two experiments revealed that game‐product congruity lead to better consumers’ responses toward ads and advertised products. The positive effects of game‐product congruity were more salient when consumers played calm–happiness games and were less immersed in the game. Theoretical implications on integrating perspectives across disciplines such as schema theory, happiness, and immersion within the media‐context framework, as well as practical suggestions are discussed.     

Trent J. MacDonald,The Political Economy of Non-Territorial Exit: Cryptosecession. Northampton: Edward Elgar, 2019. x + 233 pages. USD 125.00 (hardback)

The Review of Austrian Economics -     

Efficient moral hazard

This paper presents an infinite-horizon, discounted dynamic programming model of the endogenous opportunity costs of an agent’s effort that is allocated among an endogenous number of principals. An agent allocates effort between evaluating new principals and attending to current principals. Since each principal’s return is not maximized by the agent’s optimal allocation, moral hazard occurs in equilibrium. However, since the agent maximizes the total expected value of all undertaken projects, the agent’s allocation of effort is efficient. If the agent chooses a single principal, then moral hazard does not occur and the allocation is efficient. These results are contrary to the inefficient moral hazard results in bilateral principal-agent (P-A) and common agency (C-A) models.     

Business travelers’ ticketing,refund, and exchange behavior

This study investigates when and why business travelers make changes to their airline itineraries. Results are based on tickets purchased over a 9-month period by employees of a university in Atlanta, US. The ability to track repeat passengers purchases across time allows analysis of how passenger cancellation behavior differs by frequency of travel as well as by carrier. Results indicate that frequent travelers and those purchasing from Delta versus AirTran are more likely to request ticketing changes. Other factors influencing cancellation behavior include the time from ticket purchase, time before flight departure, and whether the itinerary is for the outbound or inbound portion of a trip.     

On the Grouping of Tasks into Firms: Make‐or‐Buy with Interdependent Parts*

We study the division of labor within production systems and look for the optimal grouping of tasks into firms. Using a unique dataset on the global automobile industry, we present evidence consistent with the prediction that pairs of tasks requiring more frequent mutual adaptation are more likely to be performed by the same firm. By taking account of interdependencies between tasks, our econometric approach generalizes standard make‐or‐buy analysis and yields improvements in predictive accuracy.     

Impacts of Insurance on the Demand and Utilization of Drug Abuse Treatment: Implications for Insurance Mandates

This article addresses costs and utilization for mental health/substance abuse treatment, with particular emphasis on the emerging importance of self-insured coverage in the 1990s. We estimate drug abuse treatment demand and utilization with an insurance claims database from self-insured employers. The study population was selected from a large database consisting of health insurance claims for all treatment events starting 1 January 1989 and ending 31 December 1991. Approximately three-quarters of the increase in in-patient usage attributable to fractional co-insurance is due to increased usage per person (the other one-quarter refers to increased numbers of users). About half of the increase in outpatient usage is due to increased usage per person. In summary, our estimates provide useful measurements of the potential impacts of improved drug abuse treatment coverage. Although the potential induced in-patient expenditures and dead-weight losses are substantial compared to co-insurance rates of 0.5, losses can be trimmed by adjusting co-insurance, even at rates of approximately 0.1.