Investment service providers gaining competitive advantage by focusing on consumers’ varying investment goals

Laddering data collected from 95 individuals and network analysis were used to reveal and identify 747 linkages among 33 content-analysed goals as reasons for investing in individual stocks, mutual funds and/or voluntary pension plans. The results suggest that consumers’ goals associated with investments are: (i) besides economic, also functional, emotional and symbolic; and (ii) influenced by the type of investment product under evaluation rather than being independent of the investment alternatives. The article presents guidelines for investment service providers on: (i) how to provide facilities that support consumers’ investment-related goals; and (ii) how to encourage consumers to take an active role in customising and personalising their investment practices when using these facilities. Thus, economic and functional but also – and especially – emotional and symbolic goals of investing give insight into these strategic decisions that enable investment service providers to deliver value to consumers. While economic, functional, emotional and symbolic goals are well established in consumer research literature, these elements contribute to a novel understanding of the drivers underlying investment in general and the differences in distinct product categories in particular.     

Instrument Choice and Motivation: Evidence from a Climate Change Experiment

Are prices or quantities the best regulatory instrument to align private actions with public interests in the presence of externalities? We add another dimension to this ongoing debate by experimentally analyzing the interaction between instrument choice and intrinsic motivation of regulated agents. The response of subjects facing a trade-off between real CO₂ emissions and private monetary payoffs to both a price and a quantity instrument are tested. We find evidence that taxes crowd out intrinsic motivation while emission standards are neutral. Crowding is short term persistent and not well explained by established cognitive theories of motivational crowding.     

ESTIMATING THE INTERNAL RATE OF RETURN FROM PUBLISHED FINANCIAL STATEMENTS: A REPLY

In estimating the long-range profitability of a business firm two different assumptions have been made on the shape of the distrubtion of contributions from the capital investments making up the firm. Assumptions need not be proved. In a steady-state the two contribution distributions yield equal numerical results. Recent results without the need of different contribution distributions are referred to.     

Modelling Small Firms' Decisions to Export – Evidence from Manufacturing Firms in Finland, 1995

In this paper, I model small firms' decisions to export by applying an existing model of the theory of diffusion of innovations and test the predictions of the model with data on Finnish SMEs. The model, incorporating so-called epidemic learning and rank effects, describes nicely the different phases of this decision-making process. The data used in the empirical analysis has been collected by interviewing directors of small industrial firms especially for this study. The results suggest, among other things, that the development of exporting in a small firm is particularly influenced by the language skills of the entrepreneurs, and that the smaller the firm, the faster is the adoption of the export strategy. In addition, the development of exporting has been faster in firms that have started exporting in the 1990s than in firms that began exporting before the '90s.     

FDH Directional Distance Functions with an Application to European Commercial Banks

Weextend Free Disposable Hull (FDH) efficiency analysis towardsthe general directional distance function framework. The profitinterpretation of directional distance functions is extendedto the non-convex FDH technologies. In addition, we derive anefficient enumerative algorithm for computing distance measuresin Free Disposable Hull (FDH) technologies, which applies tothe entire (infinitely large) family of directional distancefunctions. A simple numerical example and an application to Europeancommercial banks illustrate the algorithm.     

Bank behavior, incomplete interest rate pass-through, and the cost channel of monetary policy transmission

This paper employs a New Keynesian DSGE model to explore the role of banks within the cost channel of monetary policy transmission for shaping the interest rate pass-through from money market rates to loan rates. Banks extend loans to firms in an environment of monopolistic competition by setting their loan rates in a staggered way, which means that the adjustment of the aggregate loan rate to a monetary policy shock is sticky. We estimate the model for the euro area by adopting a minimum distance approach. Our findings exhibit that (i) financial costs are an important factor for price changes, (ii) frictions in the loan market have an effect on the propagation of monetary policy shocks as the pass-through from a change in money market rates to loan rates is incomplete, and (iii) the strength of the cost channel is mitigated as banks shelter firms from monetary policy shocks by smoothing loan rates.     

Unlocking the transformative potential of customer data in retailing

Retailers collect, process, and use large amounts of data about customers: what they buy, how they buy, when they buy – and when customer loyalty cards are used – who buys the product or service. The use of customer data within the customer relationship management (CRM) framework has largely remained one sided. The potential of customer data for the benefit of the customer’s well-being still needs to be addressed. Reverse use of customer data, i.e. the process of firms converting customer data into information that is meaningful for the customers, extends attention toward using customer data for the benefit of the customer. In addition, selling goods to customers retailers can revise customer data into relevant and meaningful information that can support their well-being. Consequently, the purpose of this study is to identify and illustrate the transformative potential of the reverse use of customer data in retailing. This is achieved by reviewing literature on CRM, S-D logic, and transformative consumer research, and conducting a case study of a food retailer using point-of-sale data to provide customers with information about the healthfulness of their food purchases. Anonymous customer feedback data is collected and analyzed, and as a result, the transformative potential of customer data is reflected through five themes: self-monitoring, enhanced diet, food literacy, peace of mind, and beyond food healthfulness. These themes illustrate customers’ well-being outcomes resulting from reverse use of customer data.     

Giving is a Question of Time: Response Times and Contributions to an Environmental Public Good

Does it matter whether contribution decisions regarding environmental public goods are arrived at through intuition or reflection? Experimental research in behavioral economics has recently adopted dual-system theories of the mind from psychology in order to address this question. This research uses response time data in public good games to distinguish between the two distinct cognitive processes. We extend this literature towards environmental public goods by analyzing response time data from an online experiment in which over 3400 subjects from the general population faced a dichotomous choice between receiving a monetary payment or contributing to climate change mitigation efforts. Our evidence confirms a strong positive link between response times and contributions: The average response time of contributors is 40 % higher than that of non-contributors. This suggests that reflection, not intuition, is at the root of pro-environmental contributions. This result is robust to a comprehensive set of robustness checks, including a within-subjects analysis that controls for potentially unobserved confounds and recovers the relationship at the individual level.