Reconciling the Invisible Hand and innovation

It is generally agreed that Adam Smith invoked the Invisible Hand to send the message to posterity that a free-market economy is the best form of economic organization. Strictly speaking, the Invisible Hand of Adam Smith is a conjecture about the virtues of a free-market economy. There are three claims in this paper concerning the interpretation of the Invisible Hand conjecture. First, the neoclassical interpretation engenders a conceptual confusion – identified here as the ‘double paradox’ of the Invisible Hand. Second, the interpretation of Adam Smith's conjecture on the beneficial effects of the free-market economy cannot – and should not – be confined to the production and consumption of existing products. Failure to distinguish the Invisible Hand Theorem from the Invisible Hand Doctrine distorts thinking about Adam Smith's message, creating the misconception that the Invisible Hand passage excludes business innovation. Third, the central message conveyed by Invisible Hand is to be read in the context of modern evolutionary economics.     

Innovation pathway to profitability: the role of entrepreneurial orientation and marketing capabilities

Drawing from the marketing capabilities and innovation literatures, we identify aprocess by which a firm’s entrepreneurial orientation impacts profits and show that it is dependent on marketing capabilities. Using a half-longitudinal design we integrate survey data with performance metrics over two time periods, from a sample of 190 firms. While the effect of entrepreneurial orientation (EO) on innovation is enhanced by architectural marketing capabilities, the effect of innovation outcomes on profits is enhanced by specialized marketing capabilities. Ultimately, the pathway from EO to performance, mediated by innovation, is positively significant at higher levels of both marketing capabilities. The results uncovered using Bayesian conditional process modeling, are robust to alternate model specifications, endogeneity tests, and provide insights into the capabilities-based understanding of entrepreneurism-marketing interface. We discuss resource allocation implications for managers as they attempt to maximize profits through innovation.     

A within-attribute model of variety-seeking behavior

Existing models view variety seeking as the result of differences in the level of attribute satiation across attributes. An alternative within-attribute variety-seeking (WAVS) model is proposed. The model posits that variety seeking occurs among the nested features, or meaningful value ranges, of an underlying dimension. The resulting pattern of consumption is represented as an oscillation about a consumer's ideal point on the dimension. An empirical study that illustrates different oscillation patterns is reported.     

The future role of national central banks in the Eurosystem

This contribution describes some changes in European central banks after the start of the European monetary union. It explains how staffs at the national central banks cooperate with the staff at the European Central Bank. Furthermore, a few issues are discussed which relate to the organization of banking supervision in Europe. This paper represents the author's opinions and does not necessarily reflect the views of the Deutsche Bundesbank.     

Demographic contributions to marketing: An assessment

The use of demographics in marketing studies has a relatively long history. Given the proliferation of demographic data, and some of the concern over the shortcomings of demographic contributions to marketing, it is appropriate to assess the use of demographics in the marketing literature. This study examines the contribution of population data, methods, and models in six marketing journals from 1980 through 1988. The results show that even though demographics appear in over 15 percent of the studies, methodological and theoretical shortcomings limit their value. The findings are discussed with respect to application improvements that should be made.     

Die Finanzierung des öffentlich-rechtlichen Rundfunks

Germany is characterised by a dualism between public and private broadcasting. Public broadcasting services, encompassing radio and television, are mainly financed by license fees. As a result of the revised Broadcasting Law, the former broadcasting fees were replaced on 1 January 2013 by a monthly broadcasting contribution paid by every household and company regardless of whether or when they use public broadcasting services. The new system resulted in higher fees for many people and a controversial public dispute. The author of this paper highlights some options to improve the current financing system.