Demand relationships and pricing decisions for related products

This paper presents in terms of price changes the theoretical conditions for optimal pricing when products are demand-related. It then suggests an approach which could be used by companies to provide guidance in the pricing of such products over time.     

Stepping in and stepping out: Strategic alliance partner reconfiguration and the unplanned termination of complex projects

Research summary : I add to work that emphasizes the stability of strategic alliances by considering the consequences of alliance partner reconfiguration. I offer two contrasting perspectives: (1) alliance partner reconfiguration leads to disruption, hence increases the risk of subsequent project termination; (2) partner reconfiguration leads to adaptation, hence decreases this risk. Data on 1,025 interfirm Australian mining alliances (2002–2011) shows that on average alliance partner reconfiguration increases the risk of project termination. For firm exit from an alliance, the effect is contingent on a firm's resource base, but not for firm entry. Surprisingly, I do not find that alliance partner reconfiguration is beneficial in a dynamic environment. I discuss the implications of these findings for the literature on strategic alliance dynamics and that on strategic alliance outcomes. Managerial summary : This paper studies what happens when over time strategic alliances change their original membership. The research shows that both entry in and exit from an alliance increase the risk of project termination. Hence, weathering difficult times and managing conflict by keeping teams stable should be a prime directive if project survival is the alliance partners' overriding concern. In addition, I find that the exit of a firm with a comparatively large resource base increases the hazard of termination more than if the departing firm has a relatively small resource base. Therefore, one cannot underestimate the importance of trying to keep on board those alliance partners who bring a critical resource to the table. Copyright © 2015 John Wiley & Sons, Ltd.     

A NOTE ON BIAS IN CAPITAL BUDGETING INTRODUCED BY STOCHASTIC LIFE

This note extends work by Young and Contreras and by Rosenthal on the present worth of cash flows under uncertain timing. In capital budgeting analysis, the use of the expected life of a project instead of the life distribution of the project biases the estimate of its expected net present value. In most situations the bias results in an overestimate of the expected net present value of the project. When the exact life distribution is unknown, the bias can be approximated by Taylor series expansion. The sensitivity of the bias to the discount rate, to cash flow patterns, and to income taxes is also investigated.     

Weighted majoritarian rules for the location of multiple public facilities

We consider collective decision problems given by a profile of single-peaked preferences defined over the real line and a set of pure public facilities to be located on the line. In this context, Bochet and Gordon (2012) provide a large class of priority rules based on efficiency, object-population monotonicity and sovereignty. Each such rule is described by a fixed priority ordering among interest groups. We show that any priority rule which treats agents symmetrically — anonymity — respects some form of coherence across collective decision problems — reinforcement — and only depends on peak information — peak-only — is a weighted majoritarian rule. Each such rule defines priorities based on the relative size of the interest groups and specific weights attached to locations. We give an explicit account of the richness of this class of rules.     

Sustainable Tuna – Can the Marketplace Improve Fishery Management?

Tuna is a major global seafood commodity and thus of significance to retailers in most countries, but especially in countries consuming large quantities of canned tuna such as the United Kingdom, United States and many European countries. Some key species are under heavy fishing pressure, and companies realize that without conservation oriented management their future supplies may be in jeopardy. Sustainable sourcing policies are becoming an integral part of supply chains for seafood products. Under the influence of public opinion bodies such as the media and environmental NGOs, many retailers have adopted seafood sourcing policies in the past decade. The business strategy of any particular company in seeking to support sustainable fishing can vary, but may include the pursuit of market opportunities, protection from damaging publicity and corporate social responsibility commitments. Companies that seek to involve themselves in fishery sustainability issues need to be committed to broad based partnerships with other companies and NGOs, and transparency about all aspects of their decision making, intentions and progress. The sustainable seafood movement has proven persistent and adaptable, and this is increasing the number of retailers seeking sustainable tuna. In a demand driven market economy this growth will surely be influential. Copyright © 2013 John Wiley & Sons, Ltd and ERP Environment     

How Do Diversity of Opinion and Information Asymmetry Affect Acquirer Returns?

We examine the theoretical predictions that link acquirer returnsto diversity of opinion and information asymmetry. Theory suggeststhat acquirer abnormal returns should be negatively relatedto information asymmetry and diversity-of-opinion proxies forequity offers but not cash offers. We find that this is thecase and that, more strikingly, there is no difference in abnormalreturns between cash offers for public firms, equity offersfor public firms, and equity offers for private firms aftercontrolling for one of these proxies, idiosyncratic volatility.     

Examining the Decision Process of Students' Cheating Behavior: An Empirical Study

This research examines the association between attitudes on cheating and cognitive moral development. In this research, we use Rest's (1979a) Defining Issues Test, the Attitudes on Honesty Scale (Authors) and Academic Integrity Index (Authors); the last two are adaptations of the DIT. A total of 220 students from three universities participated in the study (66 psychology majors and 154 business majors). The data indicate that 66.4 percent of the students reported that they cheated in high school, college, or both high school and college. Psychology majors scored higher than business majors on both the Defining Issues Test (Rest, 1979a) and the Attitudes on Honesty Scale (AHS, Authors). Using factor analysis, we found significant associations between students' ratings of the importance considerations present in the three cheating scenarios and their estimates of whether cheating would occur (i.e., the Academic Integrity Index). Finally, using logistic regression, we found that the scores on the Attitudes on Honesty Scale and Academic Integrity Index associate with the self-reported cheating behavior of college students.     

Accessibility of Computer-based Simulation Models in Inherently Conflict-Laden Negotiations

The use of computer-based simulation models has a long history in areas such as environmental planning and policy-making, and particularly in water management. Policy making in these areas is often characterized by inherent conflict among diverse stakeholders with divergent interests. Although simulation models have been shown to be helpful for such problems, they are typically under the control of a technical analyst or governmental agency and are not available to negotiators in real time. Recent trends in computer technology and user expectations raise the possibility of real-time, user-controlled models for supporting negotiation. But is such accessibility likely to be helpful? This study used a "compressed" longitudinal experiment to investigate the impacts of different scenarios of accessibility of computer-based simulation models. The task was based on a real-life problem in Colorado River water management. Results revealed no significant differences among conditions for either solution quality or satisfaction. These results suggest that the common notion of "more is better" may be inappropriate, and resources for improving computer support of negotiation might best be focused elsewhere.