New developments in global consumer behavior and marketing strategy: Introduction to the special issue

This special issue of the Journal of Business Research features ten articles selected from the papers presented during the seventh meeting of the Royal Bank International Research Seminar which took place in Montreal (Canada), September 22–24, 2011. The papers cover topics relating to new developments in online research, acculturation/socialization research, research methodology, and marketing strategy.     

Connecting the dots: how personal need for structure produces false consumer pattern perceptions

The human tendency to recognize patterns even when none exist is shown to have applications in consumer behavior. The current research demonstrates that as one’s personal need for structure (PNS) increases (i.e., requiring predictability and disfavoring uncertainty), false consumer pattern perceptions emerge. Construal level moderates this relationship such that as abstract mindsets (high construal) seek out underlying explanations and enhance, concrete mindsets (low construal) evaluate consumer-related stimuli in terms of its contextual elements and therefore attenuate the effect. Types of consumer patterns are characterized by false expectations about the performance of a cellular phone (study 1), the association of human characteristics toward personal computers (study 2), and the development of beliefs in corporate conspiracy theories (study 3). This research has implications for practitioners and academics as it expands on the literature related to false pattern perceptions by investigating it through the lens of consumer decision-making.     

A method for detecting nonlinear effects in cross-sectional survey data

This paper describes a little-used method which allows marketing research to move beyond estimating linear relations in exploratory research. Initially developed by Fisher and extended by the author, this decomposition method is systematic, flexible and answers directly questions relating to the shape of the relationship among a hypothesized set of variables. Two examples are provided to illustrate the usefulness of the method to marketing researchers.     

On model ambiguity and money neutrality

We solve for the equilibrium of a stochastic neo-classical continuous time model without and with money under model ambiguity. We show that: (i) the correction for ambiguity stemming from the money supply is nil at equilibrium; (ii) money is neutral with respect to the stock market equilibrium (the equity risk premium); (iii) money is not neutral with respect to consumption and capital accumulation, and its effect may be quantitatively substantial; (iv) the preference for model robustness affects all the real economic variables as well as the expected inflation rate and the nominal interest rate.     

The valuation of nature-linked bonds with exchange rate risk

This paper develops an arbitrage approach to pricing insurance bonds that bear currency risk. Bondholders are shown to have a short position on path-dependent digital options written on risk-tracking indices. It implements the technique of forward-neutral change of numeraire and comes down to computing first-passage-time distributions of drifted Brownian motions. We derive closed-form formulas or perform simulations depending on whether interest rates are deterministic or stochastic. Along the way, we evaluate outside-barrier currency call options. Then this research studies the effects of both nature risk and exchange rate uncertainty and shows that the former is more significant than the latter.     

The Impact of Electronic Clock Auction Systems on Shellfish Prices: Econometric Evidence from a Structural Change Model

Economic theory suggests that different auction systems may lead to different price equilibria under specific conditions. By changing the trading rules, the introduction of electronic clock auction systems (ECAS) on primary fish markets is likely to modify the price formation process. A relationship between the prices of live prawns (Nephrops norvegicus) in two French ports where different ECAS have been successively introduced is estimated through two univariate models and a vector autoregressive model applied to stationary weekly data series. Using a recent multiple break searching procedure (Econometrica, Vol. 66, 1998, 47; Journal of Applied Econometrics, Vol. 18, 2003, 1; Econometrics Journal, Vol. 6, 2003, 72), a single structural change matching the date of implementation is discovered in the two ports and shows a different impact partly explained by the type of auction system in force. The introduction of the Euro in January 2002 also appeared to play an influential role in the adoption of electronic clock auction markets.     

Ripeness and Grief in Conflict Analysis

In assessing the timing of a conflict resolution effort, one of the most frequently used explanatory frameworks is ripeness theory. Despite its popularity, ripeness theory has some limitations: poorly established generalization outside international situations, empirical validation is difficult to objectify, limited consideration of non-rational factors, and low predictability. The purpose of our study is to contribute to enriching ripeness theory by bringing in the theory of grief developed by Elisabeth Kubler-Ross. The anchovy fishing conflict in the Bay of Biscay (off the coast of France and Spain) lends itself to this type of analysis, as it is a conflict that has seen many reversals, making the place of resolution efforts hard to explain. It is from this perspective that grief theory is put forward as a complementary explanatory model. The model is tested using an original methodology that has the merit of being reproducible through the lexical analysis of newspaper articles. The results, confirming the grief model’s relevance, can then be proposed as an enhancement to ripeness theory by incorporating the grief model. This improvement leads to a better understanding of the issues of initiating a conflict resolution effort.     

Cultural and language effects on Chinese bilinguals' and Canadians' responses to advertising

The first objective of this study was to examine how Hong Kong Chinese and Anglo-Canadians differed in their perceptions of the honesty and forcefulness of a message source in informational advertising. A second objective was to explore the reaction of bilingual Chinese subjects to an advertisement and questionnaire administered either in their native language or in their second language. An experiment was carried out with Anglo-Canadian and Chinese students. Findings revealed that the former perceived significantly greater source honesty and less forcefulness in the ad compared to the latter group exposed to the instrument in their native language. The comparison of the English language and Chinese language treatments for the Chinese subjects revealed that the former perceived significantly greater source honesty, significantly less perception of forcefulness on the part of the source, and developed significantly greater attitudes towards the brand than the latter, similar to that found for the Anglo subjects. These results help to confirm the operation of a cultural accommodation process.