Ordering,revenue and anchoring in art auctions

We estimate the effect of ordering by value on revenues in sequential art auctions held by Sotheby's and Christie's. We exploit a pre determined rotation of which of these two houses holds their auction first during auction week in New York City. When the house that goes first has relatively expensive paintings compared to the other house, we find that the sale premium for the week is around 21% higher relative to the mean sale premium, and the fraction of paintings sold during the week is around 11% higher. We provide evidence that this is due to an anchoring effect.     

Choice and the Internet: From Clickstream to Research Stream

The authors discuss research progress and future opportunities for modeling consumer choice on the Internet using clickstream data (the electronic records of Internet usage recorded by company web servers and syndicated data services). The authors compare the nature of Internet choice (as captured by clickstream data) with supermarket choice (as captured by UPC scanner panel data), highlighting the differences relevant to choice modelers. Though the application of choice models to clickstream data is relatively new, the authors review existing early work and provide a two-by-two categorization of the applications studied to date (delineating search versus purchase on the one hand and within-site versus across-site choices on the other). The paper offers directions for further research in these areas and discusses additional opportunities afforded by clickstream information, including personalization, data mining, automation, and customer valuation. Notwithstanding the numerous challenges associated with clickstream data research, the authors conclude that the detailed nature of the information tracked about Internet usage and e-commerce transactions presents an enormous opportunity for empirical modelers to enhance the understanding and prediction of choice behavior.     

The Intersection of Law and Ethics – at 600 Grant Street, Pittsburgh, PA: Is it Ethical to Assert a Legal Technicality to Avoid Liability for a Debt Created by Fraud?

A considerable literature exists regard-ing the moral obligation to keep one's promises. Several authors have focused on the exceptional circumstances which may or should excuse this moral duty. Less frequently discussed is the question of how this general moral obligation and its possible exceptions play out in the context of negotiable written promises to pay money, i.e., so-called "commercial paper."This paper focuses on the application of the legal rules governing commercial paper, and on the ethical implications involved in the application of those rules. More specifically, it asks whether the assertion of the technical doctrine known as "holder in due course," and the denial of that status in some cases, promotes ethical behavior in the marketplace. By examining the circumstances of one case, involving a substantial investment and a large bank, I hope to shed some light on how the legal and ethical rules do in fact "intersect."     

Fallback Bargaining

Under fallback bargaining, bargainers begin by indicating their preference rankings over alternatives. They then fall back, in lockstep, to less and less preferred alternatives – starting with first choices, then adding second choices, and so on – until an alternative is found on which all bargainers agree. This common agreement, which becomes the outcome of the procedure, may be different if a decision rule other than unanimity is used. The outcome is always Pareto-optimal but need not be unique; if unanimity is used, it is at least middling in everybody's ranking. Fallback bargaining may not select a Condorcet alternative, or even the first choice of a majority of bargainers. However, it does maximize bargainers' minimum satisfaction. When bargainers are allowed to indicate impasse in their rankings – below which they would not descend because they prefer no agreement to any lower-level alternative – then impasse itself may become the outcome, foreclosing any agreement. The vulnerability of fallback bargaining to manipulation is analyzed in terms of both best responses and Nash equilibria. Although a bargainer can sometimes achieve a preferred outcome through an untruthful announcement, the risk of a mutually worst outcome in a Chicken-type game may well deter the bargainers from attempting to be exploitative, especially when information is incomplete. Fallback bargaining seems useful as a practicable procedure if a set of reasonable alternatives can be generated. It leapfrogs the give-and-take of conventional bargaining, which often bogs down in details, by finding a suitable settlement through the simultaneous consideration of all alternatives.     

Prototyping: a key to managing product development

Extended development cycles put companies at risk through loss of sales, margins, market share, and credibility as innovators. The author suggests constructing early-stage models to provide a dress rehearsal for new products and help companies develop products in less time.     

Cooperation and Competition in the Context of Organic and Mechanic Worldviews – A Theoretical and Case based Discussion

In this study we argue that there is an interconnection between; the mechanistic worldview and competition, and the organic worldview and cooperation. To illustrate our main thesis we introduce two cases; first, Max Havelaar, a paradigmatic case of how business might function in an economy based upon solidarity and sustainability. Second, TINE, a Norwegian grocery corporation engaged in collusion in order to force a small competitor out of the market. On the one hand, in order to encourage market behaviour that integrates economic, societal and environmental values we find that transparent cooperation within a context of an organic worldview takes care of important intrinsic as well as instrumental values. On the other hand, we find evidence for asserting that cooperation based upon a mechanistic worldview, typically leads to group egotistical consequences undermining the long term common good.