A NICE agenda for IMP research

The IMP (Industrial Marketing and Purchasing) Group has engaged in a number of interesting developments in the past few years. Particularly adventurous have been the agendas of ‘pictures’ and sense-making and of time. In this paper we argue that borrowing and combining contemporary foci within social science on narratives, identity, culture and epoché temporality (for which we use the acronym N.I.C.E) allows the construction of an approach that can integrate these IMP agendas into a new research direction for the group that will keep it at the leading edge of marketing research. The purpose of our paper is to introduce and integrate discursive and temporal elements into the understanding and research of business networks to develop a more dynamic and hermeneutic approach. Our purpose is to provide a contribution to the field in exploring how identities are formed within business networks through narrative episodes in interconnecting relationships over time. We bring together all of the elements of a NICE agenda in an attempt to provide an integrative, ‘multi-lens’ theory of business networks focussed within the IMP research tradition. In doing so, we construct meaning as itself networked; sense-making involves relating presently narrated episodes to symbolic and material aspects of other narrative network episodes and events through emplotment and storying.     

The Effect of Payment Methods on Risk Aversion

Risk aversion experiments such as those by Holt and Laury (2002, 2005) measure risk aversion by examining subjects’ responses to a series of probability-ordered choices. Subjects are paid real money rewards, using the random round payment method in which the amount is determined by one randomly selected decision. The findings reported here were obtained from 119 subjects who confronted the same choice set and payment amounts, but 60 of these subjects were paid using the random-round method while the remaining 59 were paid based on an average of all their choices, the accumulated value method. The accumulated value payment method simulates portfolio returns, as opposed to returns from stand alone investments. Results indicate that accumulated value subjects took more risk and made more inconsistent decisions.     

Restoring Wetlands Through Wetlands Mitigation Banks

This paper offers the first economic analysis of wetlands mitigation banks. The banks are a new alternative for restoration of wetlands by developers before receiving regulatory approval for future development of wetlands in the same watershed. A stochastic optimal control model is developed which incorporates ecological uncertainty of wetlands restoration. The model helps in examining the decisions of how much to invest in a wetlands mitigation bank. The model is calibrated with data from California bioeconomic parameters. Numerical simulation of the model provides a sensitivity analysis of how model parameters of restoration costs, stochastic biological growth, interest rate, and the market value of credits affect the trajectory of investment and the optimal stopping state of wetlands quality when the investment ends. The analysis reveals that restoration of the whole site will occur when there is a reduction in restoration costs, an increase in biological uncertainty or an increase in the value of wetlands credits. Continued restoration is harder to justify with a higher interest rate.     

Industry Structure,Strategy, and Public Policy. F. M. Scherer.

Review of Industrial Organization -     

The empirical determination of technology and expectations: A simplified procedure

This paper makes three principal contributions to the growing body of empirically oriented research on dynamic factor demand systems that are based on the adjustment cost model of the firm. First, a simplified procedure is described for deriving demand and supply functions which are amenable to empirical estimation and which are consistent with intertemporal expected profit maximization and a general expectations formation process for future prices. Second, it is pointed out that estimation of a complete system of demand and supply functions permits the empirical identification of both the firm's technology and its expectations formation process. Finally, the procedure is applied to aggregate annual U.S. manufacturing data for the 1947-1977 period and the consistency of the data with the theoretical framework is investigated.