Piracy and limited liability

This paper analyzes the effects of end-user piracy on a monopolized software industry with network effects in which consumers have heterogeneous income and limited liability. Limited liability produces a piracy cost which increases with income. The monopolist thus may be able to exploit the network effect brought about by the piracy of low-income consumers to charge a higher price to high-income consumers thereby earn a higher profit, especially when the monopolist can prevent the network effect from spilling over to the high-income consumers. If intellectual property rights policies are severe enough, then the monopolist can avoid the spillover. Otherwise it may become a case where each high-income buyer benefits from the piracy but the monopolist is hurt. However, a severe policy may bring about a high piracy rate since it invites the monopolist to raise the price.      

How do Heterogeneous Beliefs Influence Asset Volatility?

We investigate the influence of heterogeneous beliefs on asset volatility when agents' degrees of confidence differ. With a continuous‐time model subsuming agent's heterogeneous beliefs in the expected increase in dividends, a stock price formula is derived. Based on this formula, the stock volatility is computed via Monte Carlo simulation. The results show that the influence of belief heterogeneity in expectation on volatility depends on the confident agents' level of optimism. Empirical results are also provided.     

Manufacturers’ reliance on channel intermediaries: Value drivers in the presence of a direct web channel

Channel intermediaries constitute a key marketing asset, enabling manufacturers to reach out to and serve end-users or customers. The manufacturer-intermediary relationship has to create value for and deliver it to the end-user. In this process manufacturers and intermediaries add value to each other. Drawing upon the Governance Value Analysis (GVA) framework, this paper focuses on the manufacturer's perspective of value contributed by themselves and their intermediaries. The research setting is a multi-channel context where the manufacturer employs a direct web site for marketing in addition to the intermediary channel. We find that relational investments in intangible assets such as training and operating procedures by manufacturers in intermediaries, and intermediary investments in their end-customer relationships, increase manufacturers’ reliance on intermediaries even when the manufacturer has its own direct web site. Further, regardless of having their own website, manufacturers’ reliance on intermediaries increases with the web competence of their intermediaries. In addition, we find that, to the extent that the manufacturer's direct web site can perform the same functions as the intermediaries, manufacturer reliance on its intermediaries decreases. Surprisingly, manufacturers whose web sites have e-commerce transaction facility, rely on intermediaries more than those manufacturers whose web sites do not have this facility. Finally, the study finds that manufacturers’ reliance on intermediaries has increased over time despite their direct web channels, probably due to market growth opportunities. Overall, our study findings showcase the complementary role played by manufacturers’ web sites and intermediaries in serving their end customers in growth markets.     

Healthcare costs associated with skeletal-related events in breast cancer patients with bone metastases

Background:

Patients with bone metastases secondary to breast cancer are pre-disposed to skeletal-related events (SREs), including spinal cord compression (SCC), pathologic fracture (PF), surgery to bone (SB), and radiotherapy to bone (RT).

Objective:

To document current patterns of healthcare utilization and costs of SREs in patients with breast cancer and bone metastases.

Methods:

This was a retrospective, observational study using the Thomson MedStat MarketScan Commercial Claims and Encounters database from 9/2002 to 6/2011. Study subjects included all persons with claims for breast cancer and for bone metastases, and ≥1 claims for an SRE. Unique SRE episodes were identified based on a gap of at least 90 days without an SRE claim, and classified by treatment setting (inpatient or outpatient) and SRE type (SCC, PF, SB, or RT).

Results:

Of 17,266 patients with breast cancer and bone metastases, 9142 (53%) had one or more SRE episodes. Among 5809 patients who met all other criteria, there were 7617 SRE episodes over mean (SD) follow-up of 17.2 (15.2) months. The percentage of episodes that required inpatient treatment ranged from 11% (RT) to 76% (SB). On average, inpatient SCC episodes (n?=?83 episodes) were most costly; while outpatient PF episodes (n?=?552 episodes) were least costly. Of the total SRE costs (mean [SE] $21,072 [$36,462]/episode), 36% were attributable to outpatient RT (n?=?5265 episodes) and 31% to inpatient PF (n?=?838 episodes).

Limitations:

The administrative claims data used in this study may lack sensitivity and specificity for identification of clinical events and may not be generalizable to other populations. Also, for some SRE episode categories, the number of events was small and cost estimates may lack precision.

Conclusion:

In patients with breast cancer and bone metastases, SREs are associated with high costs and hospitalizations.     

THE SPATIAL ORIGIN OF COMMERCE*

Although dispersion raises productivity by relieving crowding, concentration promotes trade. The participation of specialist middlemen, who tend to cluster around the regional center, in the trading process would mitigate such tensions, for it becomes less urgent for others to scramble for central locations then from the increase in the density of economic activities around such locations. A city, populated by a cluster of middlemen, that serves as a platform for intermediate trade among producers in surrounding areas can exist without any increasing returns in production, transportation, and exchange. Indirect trade and pure commerce may, thus, have a spatial origin.     

Assessing bankruptcy prediction models via information content of technical inefficiency

We use a stochastic frontier model with firm-specific technical inefficiency effects in a panel framework (Battese and Coelli in Empir Econ 20:325–332, 1995) to assess two popular probability of bankruptcy (PB) measures based on Merton model (Merton in J Financ 29:449–470, 1974) and discrete-time hazard model (DHM; Shumway in J Bus 74:101–124, 2001). Three important results based on our empirical studies are obtained. First, a firm with a higher PB generally has less technical efficiency. Second, for an ex-post bankrupt firm, its PB tends to increase and its technical efficiency of production tends to decrease, as the time to its bankruptcy draws near. Finally, the information content about firm’s technical inefficiency provided by PB based on DHM is significantly more than that based on Merton model. By the last result and the fact that economic-based efficiency measures are reasonable indicators of the long-term health and prospects of firms (Baek and Pagán in Q J Bus Econ 41:27–41, 2002), we conclude that PB based on DHM is a better credit risk proxy of firms.     

Estimating the commuting cost and commuting time property price gradients

In this paper, we estimate the property price gradients in Hong Kong. We distinguish our effort from previous studies on the subject by directly measuring the economic distance, i.e., the monetary commuting cost and commuting time, instead of merely the physical distance. Our results are generally supportive of the prediction of a negative property price gradient. In one specification, the estimated capitalization of the savings of commuting cost in property prices appears to be just right. The expected negative effect of commuting time on property values, however, can only be detected among observations with larger commuting times. Nevertheless, over the range where the effect of commuting time has the expected negative sign, the values of time implied by the estimates agree well with the results reported in the transportation economics literature.     

The moderating effects of organizational context on the relationship between voluntary turnover and organizational performance: Evidence from Korea

Scholars have suggested that the relationship between voluntary turnover and organizational performance can be moderated by the organizational context in which turnover occurs. However, there are few empirical studies that examine such moderating effects. Using a sample of 161 firms in South Korea, this study investigates how the relationship between voluntary turnover and organizational performance is moderated by three context variables: (1) the degree of organizational usage of employee involvement practices, (2) the degree of organizational investment in employee training and development, and (3) the availability of potential workers. The results demonstrate that employee involvement practices significantly amplify the negative relationship between voluntary turnover and organizational performance, give marginal support for moderation from the availability of potential workers, and provide no support for moderation from the degree of organizational investment in employee training and development. We discuss theoretical and practical implications of this study for enriching our understanding of the relationship between voluntary turnover and organizational performance. © 2012 Wiley Periodicals, Inc.     

Exploring consumer conflict management in service encounters

Consumer researchers have yet to examine how consumers frame and deal with conflict. Understanding how consumers manage conflict is essential for service providers seeking to effectively recover instances of service failure, and avoid the costs associated with increasing instances of consumer anger. Using a modified grounded theory approach, we develop a model of consumer conflict management drawing on 39 informant accounts of service failures. The emergent model proposes that consumers’ conflict style is related to whether conflict is framed in task or personal terms. Task-framed conflicts resulted in more productive conflict styles than those framed in personal terms. Self vs. other orientation moderated the relationship between conflict frame and conflict style. These findings help us better understand the nature of consumer conflict and identify the importance of carefully targeting service recovery efforts to reduce instances of anger.