The analytics of search with posted prices

Summary. This paper investigates the characteristics of the optimal posted price in the standard sequential search paradigm. Much of the intuition gleaned from the extensive sequential search literature in which the seller adopts a reservation price does not carry over to the posted price setting. For example, an increase in buyer valuations can lead to a reduction in the optimal posted price. We do, however, provide sufficient conditions on the hazard rate function h which ensure that an increase in demand induces an increase in the optimal posted price. As exhibited herein, the analysis of the posted price model depends critically upon analytical properties of h. Amongst the issues treated are the elasticity of demand, finite horizon, sale of multiple units, and competitive equilibrium. Received: October 21, 1999; revised version: March 7, 2000     

George Hudson's financial reporting practices: putting the Eastern Counties Railway in context

George Hudson was the most important railway promoter of his time. He had a particular aptitude for visualizing and arranging spectacular company and line amalgamations and his activities helped to bring about the beginnings of a more modern railway network. In 1849 he exercised effective control over nearly 30 per cent of the rail track then operating in the UK, most of it owned by four railway groups, the Eastern Counties Railway, the Midland, the York, Newcastle and Berwick, and the York and North Midland, before a series of scandalous revelations forced him out of office. The economic, railway and accounting literatures have treated George Hudson as an important figure in railway history, although concentrating largely on the financial reporting malpractices of the Eastern Counties Railway, while Hudson was its chairman, which were incorporated into the influential Monteagle Committee Report of 1849. Relatively little attention has been paid, however, to events at Hudson's other major companies. This paper analyzes the available evidence, particularly that produced by the Committees of Investigation established at all four railway groups, in order to provide a more balanced assessment of George Hudson's approach to financial reporting and thereby place events at the Eastern Counties Railway in a broader context.     

SHORT‐MATURITY OPTIONS AND JUMP MEMORY

We investigate jump memory using an extensive database of short‐term S&P 500 index options. Jump memory refers to the attenuation of the implied jump intensity and magnitude parameters following a crash event. We use a genetic algorithm to obtain a time series of implied parameter estimates and posit behavioral and rational explanations for parameter attenuation following a crash event. We find that a nested form of the jump‐diffusion model sharpens the remaining parameter estimates and has a negligible effect on pricing accuracy.     

Stock market perceptions of the motives for mergers in cases reviewed by the UK competition authorities: an empirical analysis

A number of studies have considered the motivation of managers to follow a merger strategy. However, as far as we are aware none has looked at the influence of competition regulation on merger motives using stock market data and event study techniques. Data drawn from 63 merger cases in the UK between 1989 and 2003 are examined for the stock market's perceptions of what motivated managers to pursue their initial merger bid. The findings suggest that the Synergy and Hubris dominate as motivations for mergers and that, unintentionally, competition policy may help to reduce the number of mergers motivated by Managerialism. Copyright © 2008 John Wiley & Sons, Ltd.     

Research findings in strategic management with implications for R&D management

Abstract
The author has reviewed the literature, predominantly North American, on the relationships between corporate strategy and corporate performance.
The general context is the question of where and how a firm should diversify. The author considers three areas of decision: corporate strategy, (where to compete), business strategy, (how to compete), and corporate organization (receptiveness to diversification). It appears that the most advantageous corporate strategy is to diversify into a high-profit area but to maintain a substantial relatedness to existing businesses; the best business strategy is to have a market-related perspective, to use R&D to develop new products with a marked competitive advantage rather than new processes, to minimise investment but to enter the market on a sufficiently large scale. This last condition presupposes a high degree of top-management commitment to the venture. Furthermore, consideration has to be given to whether the organizational culture is such as to nurture rather than stifle the venture by insisting on administrative controls appropriate to the firm's traditional base.
The author points to three areas deserving of further investigation: How a firm in a mature industry can find a related area that is sufficiently attractive; how to fix on the correct scale of an entry taking into account the long lead times before the venture shows a net return; and how to ensure that the corporate culture will be able to accommodate novel interests and procedures.
All the above matters pose questions for the management of technology and the direction of R&D.     

Order management for profit on the Internet

To succeed, Internet retailers must make a profit on the goods and services they sell. But e-tailers are still searching for strategies that work. To test current practices, we became “phantom shoppers” and bought a randomly chosen set of CDs from a variety of Internet retailers. Our findings suggest that order management and logistics skills are pivotal for selling profitably on the Internet. In this article, we show how Internet retailers can deploy resources creatively to attract the right shoppers, convert these shoppers into buyers, and improve the chances of repeat purchase while maintaining profit margins.     

Profitability and capital accumulation in British industry during the transwar period, 1913–1924

This article provides new information on profitability, taxation, and capital accumulation across the transwar period, based on an analysis of the accounting records of 30 companies in a range of industrial sectors. The main findings, that apparently high profitability in the war period was largely an illusion, and that the subsequent slump was very severe in its effects on business profitability, are consistent with views of the period as one of low capital accumulation. In effect, the generosity of the state's negotiating position towards capital owners during the war was cancelled out by the combined effects of inflation and of the severe postwar slump.     

Financial market and housing wealth effects on consumption: a permanent income approach

The objective of this study is to examine the financial market and housing wealth effects on consumption. Housing has the dual functions as both a commodity yielding a flow of housing services and an investment asset yielding a flow of capital income. With the construction of an empirical framework based on the vector autoregression approach, the findings from this study suggest that a rise in housing price has both a positive wealth effect and a negative price effect on consumption. While the positive wealth effect is caused by an increase in capital income, the negative price effect is caused by an increase in the cost of housing services. In addition, the housing market wealth effect increases, at the expense of the price effect, with the level of housing-market leverage. These findings imply that the government policy of land supply aiming to stimulate the economy should strike a balance between the possible wealth and price effects of the housing market.