Changes In Consumer Attitudes Toward Marketing,Consumerism and Government Regulation: 1971–1975

Trends in consumer attitudes toward business philosophy, product quality, advertising, consumer responsibilities, government regulation and price controls are examined. The findings of three national surveys indicate that the level of consumer discontent did not change substantially between 1971 and 1975. Despite expanding efforts to advance the interests of consumers, the basic criticisms and frustrations expressed by respondents in 1971 were echoed again in 1973 and 1975. However there were some notable trends in the kinds and magnitudes of consumer concerns over this period. The need to treat consumer dissatisfaction as a relative concept is emphasized, and it is suggested that comparisons of present levels of consumer unrest to a zero base would probably lead to exaggerated interpretations of current conditions.     

Improving Productivity and Quality Through Collaboration

This study examines the impact of joint labor-management activities on perceived changes in productivity and quality, while controlling for the exercise of relative power options. Ordered probit estimates yield general support for the central proposition that the greater the intensity of joint activities, the greater the productivity and quality improvements. Mixed results are obtained regarding the impact of capital substitution, subcontracting, and concession bargaining on performance in collaborative settings.     

Empirical comparison of subjective probability elicitation methods*

Abstract. The direct magnitude and bisection subjective probability elicitation methods are compared based on the environmental (relative frequency) accuracy of the resulting probabilities and the acceptability of the elicitation methods. Each subject utilized, and provided acceptability indications for, both methods. Interactive elicitation software, including histogram-like graphical displays of the probabilities for both elicitation methods, were provided to aid the subjects and provide for a more refined comparison of the methods. Second-year graduate business students, knowledgeable about both the task context and subjective probabilities, completed the experiment. Direct elicitation of probabilities provided significantly more accurate subjective probabilities than did the bisection method and the former method also was significantly more acceptable to the subjects.     

Stock Price Movements in Response to Stock Issues under Asymmetric Information

This paper characterizes the function relating the number of new shares issued by a firm to the resulting change in the firm's stock price, when insiders are asymmetrically informed. We show that, in equilibrium, the stock price will be a decreasing function of the issue size; moreover, the rate of decrease can be so rapid to cause “equity rationing.” We also show that there will be underinvestment relative to the symmetric information case.     

Applications of Optimal Stopping in Resource Economics*

Some applications of optimal stopping rules in the analysis of resource economic problems are surveyed. The conceptual foundation for the approach stems from the dual roles of uncertainty and irreversibility in these problems. A stochastic adaptation of Wicksell's ‘tree-cutting’ paradigm is exposited and shown to provide a rigorous methodology that is as intuitive as more familiar contingent-asset approaches. Four resource economic applications are considered: environmental problems, urban development, bioeconomic harvesting and resource project timing and valuation.     

Sample-Dependent Results Using Accounting and Market Data: Some Evidence

Studies relating accounting and price data often use the COMPUSTAT or related PDE data base as the source for the accounting data. This practice may introduce a look-ahead bias and an ex-post-selection bias into the study. We examine this problem by comparing results from the standard COMPUSTAT data base with those from a data base which suffers from neither bias. We find that rates of return from portfolios chosen on the basis of accounting data from the two data bases differ significantly. Further, we find that these differences imply different conclusions when we test a specific hypothesis relating accounting and price data. Finally, we propose a number of remedies which may reduce the bias when the standard COMPUSTAT data base is used.     

The sensitivity of financial distress prediction models to departures from normality*

Abstract. This research empirically investigated the effect of nonnormality on financial stress prediction. The analysis included the application of probit, logit and multiple discriminant analysis to prediction models found in previous literature, and also involved separate samples for both bankrupt and problem-status companies. Finally, the statistical techniques were evaluated under extreme conditions of nonnormality. Two basic procedures were used to modify the ratio distributions to achieve normality. These included a square-root transformation procedure and an outlier deletion procedure. Results were compared using both a univariate and a multivariate technique to identify and remove outliers. The results indicate the general sensitivity of the multiple discriminant analysis technique to departures from normality and the sensitivity of the logit and probit techniques to extreme nonnormality. The data indicate that researchers interested in assessing classification accuracy might benefit by testing for distributional sensitivity using procedures outlined in this research. Resumé. Les auteurs ont procédé à une analyse empirique de l'incidence des écarts par rapport à la normalité sur la prévision des contraintes financières. L'analyse comporte l'application du probit, du logit et de l'analyse à discriminants multiples aux modèles prévisionnnels que l'on trouve dans des publications, et l'on a eu recours à des échantillons distincts tant pour les sociétés en situation de faillite que pour les sociétés en difficulté. Enfin, les techniques statistiques ont été évaluees dans des conditions extrêmes d'écart par rapport à la normalité. Deux méthodes fondamentales ont été utilisées pour modifier les distributions de ratios de façon à parvenir à la normalité. Ces méthodes comprennent un procédé de transformation de la racine carrée et un procédé d'élimination des éléments isolés. Les résultats obtenus ont été comparés à l'aide d'une technique univariée ainsi que d'une technique multivariée pour repérer et supprimer les éléments isolés. Les résultats indiquent la sensibilité générale de la technique d'analyse à discriminants multiples aux déviations par rapport à la normalité et la sensibilité des techniques logit et probit aux écarts extrêmes par rapport à la normalité. Ces données révèlent que les chercheurs qui s'intéressent à l'évaluation de l'axactitude de la classification pourraient tirer profit d'une vérification de la sensibilité de la distribution au moyen des méthodes décrites par les auteurs.     

Publish or Perish: What the Competition is Really Doing

This study provides comprehensive publications performance data over a 25-year period for finance doctorates. These data indicate that publishing one article per year in any finance journal (or finance, accounting, economics, or business journal) over any prolonged period of time is a truly remarkable feat, met by only 5% of the graduates. Tenure screens combining various quantity and quality requirements are examined to assess their ability to predict future publication productivity. Faculty and administrators seeking defensible benchmarks for evaluating faculty research productivity in finance will find that these data and results are particularly useful.