Inoculating consumers against deception: The influence of framing and executional style

This study examines conditions affecting consumer susceptibility to advertising deception and educational efforts designed to inoculate consumers against it. Results show that consumers are best able to detect deception when their frame of reference (cognitive or affective) is incongruent with the advertisement's executional style (attribute or emotional). Attempts to inoculate consumers against deception by providing factual brand comparisons have their strongest effect among consumers with an affective frame of reference and for emotionally charged ads.

---

Die Immunisierung von Konsumenten gegen werbliche Irreführung: Der Einflu der persönlichen Informationsausrichtung und des werblichen Argumentationsstils

Zusammenfassung Die Studie befa\t sich mit den Bedingungen werblicher Irreführung von Konsumenten und mit den Bemühungen der Verbrauchererziehung, Konsumenten durch vergleichende Warentestergebnisse gegen solche Irreführung zu immunisieren. Ihre Ergebnisse zeigen, da\ Konsumenten werbliche Irreführung am ehesten dann durchschauen, wenn ihre persönliche Informationsausrichtung (kognitiv oder affektiv) nicht mit dem werblichen Argumentationsstil (informativ oder emotional) übereinstimmt. Versuche, Konsumenten mit Hilfe vergleichender Warentest-Informationen gegen werbliche TÄuschung zu immunisieren, sind am wirkungsvollsten bei Konsumenten mit affektiver Informationsausrichtung und bei emotionshaltiger Werbung.

---

---

The authors wish to thank Joel Cohen and the Editors and reviewersof Journal of Consumer Policy for their valued suggestions, and Jill Joyce for assistance in data collection and analysis.     

The mixed economy for public service consumers. The case of consumer agencies for public transportation

The phrase mixed economy of welfare refers to the observation that the provision of public services in western countries frequently involves the participation of other sectors in addition to government. For example, a service may be privately financed and produced but regulated by government, financed by government subsidies or vouchers but produced privately, or produced by a commercial or voluntary organization under contract to government. But such different ways in which government can arrange public service supply by no means exhaust the varieties of arrangements in a mixed economic system. Other examples include alternative institutional arrangements for articulating consumer wants for public services, evaluating consumer satisfaction, and holding the producers of services accountable for their performance.This paper examines the role of official public advisory bodies and private, voluntary associations whose purposes are to improve services to users of U.S. public transportation. At variance with some of the theory of political economy, it is found that the public and private consumer organizations generally enjoy a symbiotic rather than substitute or competitive relationship with one another, and that both kinds of organizations arise and complement each other in addressing the problems of consumers of a government service produced under monopoly conditions.

---

Die Beteiligung mehrerer Wirtschaftssektoren bei der Versorgung mit öffentlichen Diensten — der Fall der amerikanischen Verbraucher-Agenturen für öffentlichen Nahverkehr

Zusammenfassung Der Ausdruck mixed economy of welfare bezieht sich auf die Beobachtung, daß die Versorgung mit öffentlichen Gütern in westlichen Ländern häufig nicht allein durch den Staat erfolgt. So kann zum Beispiel ein öffentliches Gut privat finanziert und hergestellt werden, aber unter öffentlicher Aufsicht stehen, oder es kann von der öffentlichen Hand bezahlt aber privat produziert werden, oder es kann durch eine kommerzielle oder gemeinnützige Organisation in Absprache mit staatlichen Stellen produziert werden. Ebenso gibt es Fälle, wo öffentlicher und privater Hersteller eines vergleichbaren Gutes verschiedene Marktseggmente versorgen. Beispielsweise stehen in den USA den Bürgern, die mit öffentlichen Schulen unzufrieden sind, private Schulen zur Verfügung.Diese Beispiele zeigen, auf welchen unterschiedlichen Wegen die Versorgung mit öffentlichen Gütern rangiert werden kann. Solche angebotsorientierten Beispiele zeigen aber nur einen Teil der möglichen Sektorverbindungen in einer Mischwirtschaft. Andere Beispiele treffen eher die Nachfrageseite bei öffentlichen Gütern, insbesondere die institutionellen Möglichkeiten für die Artikulation von Verbraucherwünschen hinsichtlich öffentlicher Güter für die Erfassung der Zufriedenheit und dafür, daß die Anbieter öffentlicher Güter für ihr Leistungsniveau einstehen müssen. Solche Beispiele zeigen, daß Einrichtungen wie Kommissionen für öffentliche Dienste, Departements für Konsumentenfragen, Ombudsmänner und eine Vielzahl privater und freiwilliger Organisationen in unterschiedlichster Weise tätig werden, um die Interessen von Bürgern zu schützen, die öffentliche Leistungen in Anspruch nehmen.Der vorliegende Beitrag betrachtet solche Einrichtungen für öffentlichen Nah- und Fernverkehr in den USA. Ebenso wie in England gibt es hier sowohl offizielle öffentliche Beratungsgremien wie auch private freiwillige Einrichtungen, deren Zielsetzung ganz ähnlich sind, nämlich die Leistungen der öffentlichen Verkehrsunternehmungen zu verbessern. Der Beitrag berichtet über die Ergebnisse einer empirischen Studie beider Arten von Gremien und versucht die Rolle beider Arten in einer Mischwirtschaft zu beschreiben. Insbesondere versucht der Beitrag, zu erklären, warum beide Arten von Gremien entstehen, welches Verhältnis sie zu einander und zu den Transportunternehmen haben. Im Gegensatz zu manchen theoretischen Annahmen erwies sich, daß öffentliche und private Verbraucherorganisationen weniger in einem substitutiven oder wettbewerblichen Verhältnis zueinander stehen, sondern eher eine Symbiose miteinander bilden, und daß sich beide Arten von Organisationen häufig bei der Behandlung von Problemen ergänzen.The author is indebted to his former student and research assistant Chester Phillips for carrying out the survey for this paper. He would also like to thank his colleague Richard Silkman for insightful comments and suggestions on the first draft and Beverly Dolinsky of the Permanent Citizens Advisory Committee to the MTA in New York City for the time and information she provided. Finally, the author wants to thank Ken Judge for providing the stimulus to write this paper through the invitation to participate in the 1983 Social Administration Association Conference in Canterbury, England, where this paper was first presented, and Harry Weiner for arranging support to allow attendance at that conference.

---

---

Dennis R. Young is a Professor at W. Averell Harriman College for Policy Analysis and Public Management, State University of New York at Stony Brook, Stony Brook, New York 11794, USA.     

The Two Faces of Analyst Coverage

We find that positive excess (strong) analyst coverage is associated with overvaluation and low future returns. This finding is consistent with the view that excessive analyst coverage, driven by investment banking incentives and analyst self-interests, raises investor optimism causing share prices to trade above fundamental value. However, weak analyst coverage causes stocks to trade below fundamental values. This finding indicates that investors tend to believe that these firms are more likely to be plagued by information asymmetries and agency problems. The results remain robust after controlling for the possible endogenous nature of analyst coverage and analysts' self-selection bias.     

Project Management Characteristics and New Product Survival

We develop a conceptual model of new product development (NPD) based on seminal and review articles in order to answer the question, “What project management characteristics will foster the development of new products that are more likely to survive in the marketplace?” Our model adopts Ruekert and Walker's theoretical framework of situational dimensions, structural/process dimensions, and outcome dimensions as an underlying structure. We conceptualize their situational dimensions more narrowly as project management dimensions, allowing us to examine more specifically how project management practices affect the NPD process. In our model, project management dimensions include project manager style, project manager skills, and senior management support. Structural/process dimensions include cross‐functional integration and planning proficiency. Outcome dimensions include process proficiency and new product survival. Our empirical analysis finds support for 20 hypotheses, a reversal of one hypothesis, and nonsignificant results for one hypothesis. These results show that projects are best led by managers with strong technical, marketing, and management skills, using a participative style and enjoying early and continuous support from senior management. These project management dimensions promote cross‐functional integration and planning, which are important to process proficiency and new product survival. Our study suggests two broad conclusions. First, it confirms the links in the extant literature between situational (project management) dimensions, structural/process dimensions, and outcome dimensions in NPD. Second, firms can improve cross‐functional integration and planning through various project management practices. Generally, we find that firms interested in improving both proficiency in their development process and the survival rate of new products should take steps to promote cross‐functional integration and to improve their planning processes. While the linkage between cross‐functional integration and NPD outcomes is well established in the literature, the impact of the planning process on NPD outcomes is a research area ripe with opportunity. Our study highlights three aspects of planning that contribute to NPD outcomes. Plans should be detailed, team members should participate actively in the planning process, and teams should be given flexibility and autonomy to respond to unanticipated issues as they appear.     

Securityholder Taxes, Corporate Capital Structures and the Priority Structure of Debt

This paper shows that the firm has an incentive to issue multiple classes of debt that are differentiated by seniority to enhance securityholder tax-timing option values. The analysis establishes that there is at least one mix of senior and junior debt that maximizes the tax option gain from having multiple priority classes of debt. An analytic example provides specifications for the optimal amount of leverage and the optimal mix of senior and junior debt. Relative to the case of only one class of debt, a multiple debt priority structure increases the optimal amount of corporate leverage.     

Real estate return correlations: Real-world limitations on relationships inferred from NCREIF data

Correlation estimates for returns between individual properties are subject to large inherent uncertainties due to limits on the amount of data that is likely to be available for the foreseeable future. After allowance for correlation sampling error, it is impossible to distinguish on an ex ante basis between the risk-reduction capabilities of mean-variance portfolio selection models and naive diversification without regard to property type or geographical location. The naive portfolio diversification strategies of typical institutional real estate portfolio managers are rational responses to limitations on the informational content of statistical analyses of historical real estate data.     

Technology and Rights

What do we know about technology and rights? This article provides a fairly comprehensive overview of current issues regarding this topic. We explore and analyse a wide spectrum of rights that are challenged in this current era of technological convergence. We use the United States Bill of Rights as an example of the vulnerability of legal protections for rights against particular political and technological changes in this post 9-11 climate. New streams of rights acting as a safeguard against further incursions of technology into civil liberties are explored. We also address intellectual property rights and international trends in copyright, patent and trademark laws. We question whether these issues of technology and rights have a place in current technological literacy scenarios.     

The effectiveness of interest-rate futures contracts for hedging Japanese bonds of different credit quality and duration

This study investigates the effectiveness of the Tokyo Stock Exchange (TSE)-traded Japanese 10-year JGB futures contract to hedge portfolios of Japanese bonds of differing maturity and credit quality. The bond portfolios examined are Government, AAA-, and AA-rated Eurobonds with maturities of 2, 3, 5, 7, 10, and 20 years. Consistent with the recent literature, the study employs univariate methods for calculating hedge ratios based on levels, first differences, and percentage change of each series. Out-of-sample forecasting is used to determine the effectiveness of the calculated hedge ratios for each of the bond portfolios and to determine which approach to calculating hedge ratios is the most effective. The results show that this particular futures contract does provide a good hedge, particularly for those bond terms closest to the 10-year term of the contract. There is some evidence, although not strong, that JGBs are better hedged than AAA and AA bonds. Investors should take some caution when using this futures contract to hedge bond portfolios of different maturities and credit ratings.     

Ownership structure and the pricing of discretionary accruals in Japan

This paper examines the valuation effect of discretionary accruals for Japanese firms, taking into account the book value of equity. Consistent with US evidence, the Japanese market prices discretionary accruals, indicating that discretionary accruals enhance the value relevance of reported earnings. This value relevance is lower for cross-held firms, consistent with the view that cross-business shareholding aggravates tunneling or managerial opportunism through discretionary accounting choices. On the other hand, foreign shareholding and bond financing provide effective monitoring on managerial discretion of profit firms to enhance the valuation of discretionary accruals.     

New development: Unified scores of governance capacity using a Bayesian latent variable analysis

A plethora of governance measures has been developed to assess governance capacity in different countries. Choosing one indicator over another involves discretionary decision issues. This article presents a new unified measure of governance capacity for the administrative and political dimensions. The unified measure provides a more accurate understanding of governance than single indices.