Information processing and innovative choice

In this paper we examine how the information processing of subjects who make an innovative choice (innovators) differs from that of subjects who make a noninnovative choice (noninnovators). The task involves selection of an alternative within a range of prerated product category innovativeness. We propose that subjects who seek 1) impersonal/uncontrollable sources, 2) higher levels of information, 3) more detailed (versus summary) data, and 4) noncomparative (versus comparative) data are more likely to make innovative choices. The research method is a computerized process tracing experiment utilizing Search Monitor (Brucks 1988).The authors wish to express their gratitude to Merrie Brucks for the use of and help with Search Monitor and to Eric Johnson, Dave Schmittlein, and Mita Sujan for helpful comments on an earlier version of this paper.     

Are Art Auction Estimates Biased?

This article considers whether presale auction estimates are unbiased predictors of price when “no‐sales” are considered utilizing a newly constructed sample of over 500 works by eight early twentieth‐century American artists. Unbiased presale auction estimates in predicting price, while expected, are generally not supported in previous work, but these studies (excepting one) do not include no‐sales in the calculations. In order to study the question, we employ a standard approach that uses an inverse Mills ratio arising from a sample selection probit to correct for selection bias. We find that controlling for selection bias, presale auction estimates appear to be biased downward, and we offer possible reasons for this result.     

The Ethics of Professorial Book Selling: Morality, Money and "Black Market" Books

This study used experimental and correlational techniques to examine perceptions that university faculty hold regarding the practice of professorial selling of examination textbooks to wholesalers. Faculty members (n = 236) from 14 universities and community colleges and a wide variety of academic disciplines responded to a web-based survey. We presented hypothetical selling situations to respondents with manipulated variables consisting of solicitation status (unsolicited versus solicited) and use of money (for faculty or for student activities). Both main effects and the interaction effect were significant such that respondents perceived it to be more ethical to sell an examination book when the book was unsolicited and when the money was being used to fund student activities. The variable most correlated with faculty members' beliefs that book selling is ethical and the faculty members' self-reports of whether or not they have engaged in bookselling was how widespread the practice appeared to be on campus. About 30 percent of faculty members sold textbooks over the past year at a dollar value of about $80 per professor. About 38 percent of respondents reported they believed the practice to be generally ethical. Implications for business ethics theory, students' moral development, and advancement of on-campus codes of ethics policies are discussed along with avenues for future research.     

Why Are Themed Brandstores So Powerful? Retail Brand Ideology at American Girl Place

Although there is growing interest in themed brandstores, we still know very little about the source of these retail environments’ power to affect consumers profoundly. Utilizing an ethnographic study of American Girl Place, a culturally rich and highly successful retail environment, we find that effective retailing in these contexts is an intensely ideological affair. In our participant-observation of, and on-site interviews with, consumers at American Girl Place we find that the ideology of the brand manifests powerfully through a variety of different and distinct areas within the store: the Museum, the Library, the Café, the Salon, the Theater, and the Photo Studio. Ideological expression is central to each of these places. Tracking the influence of brand ideology through consumers’ retail experiences, we theorize about the centrality of retail place in ideological branding. Although the confluence of ideology and retailing has been referenced in prior research, this paper focuses on and systematically develops the theoretical interconnection between the two. The physical immediacy of themed brandstore experience acts as a quilting point that links together related cultural concepts into a strong retail brand ideology. The implications of this theory draw our attention to ideological and morally-bound retail brand expressions, emphasize the importance of a variety of retail formats within a single store, and provide practical guidelines for retailers eager to build successful brands of their own.     

Risk and the Home Equity Conversion Mortgage

This article analyzes the risks involved with reverse mortgage insurance and explains the pricing model developed for the Home Equity Conversion Mortgage (HECM) demonstration. The paper demonstrates how borrower longevity, interest rates and property value changes all affect pricing, and why the HECM model focuses on property value as the primary source of uncertainty. It goes on to explain why a random walk specification was chosen to forecast property values, and how the principal limit factors, which determine cash payments to borrowers in the HECM program, are calculated.     

THE RELATIONSHIP BETWEEN FINANCIAL PERFORMANCE AND STOCK MARKET BASED MEASURES OF CORPORATE DIVERSIFICATION

This study examines the relationship between corporate diversification and financial performance. The use of a stock market based measure of diversification allowed a much larger database than in previous studies and overcame the subjective nature of measuring internal diversification. Because previous researchers found that firm size affected performance, size was controlled in this analysis. The authors conclude that there is no statistically significant relationship between the degree of internal diversification and financial performance.     

Falling Behind and Catching Up in a Model of North-South Trade

This paper analyzes a formal, dynamic model of the center-periphery problem. The model features falling relative demand for agricultural goods, a higher rate of technical change in manufacturing, and a quality-differentiated manufactured good. Income differences imply a potential for intra-industry trade, while technical change generates product cycle type results. The main insight is that a closing of the North-South technology gap does not necessarily imply catching up, because of the falling relative demand for agricultural goods. The South catches up only if it exports lower-quality varieties of the manufactured good and closes the technology gap.     

On the faustmann solution to the forest management problem

This paper is concerned with optimal solutions to the forest management problem when future utilities are undiscounted. By examining asymptotic properties of such solutions, we find that (i) if the utility function is linear, then the Faustmann periodic solution is optimal; (ii) if the utility function is increasing and strictly concave, an optimal solution converges to the maximum sustained yield solution, which we characterize as a golden rule. These results may be viewed as a possible resolution to the debate in forestry economics about what constitutes an optimal policy in forest management.