Credit markets: Tumultuous and opportunistic— navigating the shifting terrain of debt markets

Historic events battered both the financial markets and the real economy throughout 2008 and the first quarter of 2009. On Wall Street, the destruction was most evident through the bankruptcy of Lehman Brothers; the acquisitions of Bear Stearns, Merrill Lynch, and Wachovia; and the implosions of AIG, Fannie Mae, and Freddie Mac. And Main Street wasn't spared, as the declines in home prices, large federal involvement in the banking and the automobile industries, a rapid rise in unemployment, and the explosion of the U.S. federal budget deficit have shaped millions of lives and will dramatically alter the country's economic future. © 2009 Wiley Periodicals, Inc.     

The Future of Market Regulation

Market regulation is accomplished both by competition and by external government agencies, and the trend is toward greater reliance on competition. Economists have fostered this trend and have even invented markets to help overcome some externality problems. They have contributed to a steady improvement in antitrust policy, which currently reflects economic knowledge well. They diagnosed and demonstrated problems with external regulation of the airline industry and gave assurance that regulation by competition could work in its place. Success there led not only to deregulation of airlines but also deregulation of railroads, trucks, buses, and, in some ways, natural gas pipelines. Two other industries, telecommunications and electricity, are now following very ambitious paths toward less external regulation and greater dependence on competition. The Internet raises new issues, but there also, competition will play an important regulatory role.     

Are “Anti-Folk Theorems” in repeated games nongeneric?

Folk Theorems in repeated games hold fixed the game payoffs, while the discount factor is varied freely. We show that these results may be sensitive to the order of limits in situations where players move asynchronously. Specifically, we show that when moves are asynchronous, then for a fixed discount factor close to one there is an open neighborhood of games which contains a pure coordination game such that every Perfect equilibrium of every game in the neighborhood approximates to an arbitrary degree the unique Pareto dominant payoff of the pure coordination game.     

Considerations of Countervailing Power

The 2010 Horizontal Merger Guidelines set forth the current antitrust enforcement practices but do not address mergers that result in bilateral monopoly. We show that, given the presence of lawful, enduring market power, such mergers may improve social welfare. As a result, these mergers deserve careful scrutiny before condemning them as anticompetitive. In this paper, we address this issue and suggest an economically sound enforcement policy.     

Changing your mind about seeing a brand that you never saw: Implications for brand attitudes

Two field experiments examine the attitudinal consequences of consumers changing their minds about previously seeing brands when in fact they have not. In the first study, an increase in false brand awareness, holding brand exposure constant, is found to result in more favorable brand attitudes. In the second study, changes in false brand awareness were found to mediate the development of defensive thoughts in which respondents self‐justify changing their minds. Defensive thoughts, in turn, mediate the development of brand attitudes. The results suggest that simple changes in one's subjective probability of previously seeing a brand independent of actual exposure can have significant attitudinal consequences for that brand. This is due to the generation of self‐justifying cognitions. Individual change scores are further found to have greater theoretical and empirical utility than static measures. © 2011 Wiley Periodicals, Inc.     

Product Innovativeness Dimensions and Their Relationships with Product Advantage,Product Financial Performance,and Project Protocol

A considerable body of research informs the relationship of product innovativeness with firm and environmental variables as well as the impact of product innovativeness on product financial success. While providing significant insight, the extant literature exhibits conflicting findings that raise questions as to how, specifically, product innovativeness contributes to product financial performance. This study ties together several streams of research related to the product innovativeness construct to enhance understanding of the product innovativeness—product financial performance relationship. The product innovativeness construct is deconstructed by conceptualizing the relationships among three dimensions of product innovativeness: technological discontinuity, marketing discontinuity, and customer discontinuity. Product innovativeness is distinguished from product advantage, and the relationships among product innovativeness dimensions, product advantage, and product financial performance are empirically tested. The results reveal that, indeed, product innovativeness consists of three separate dimensions that exhibit no or moderate correlations with product advantage. Furthermore, product advantage positively and marketing discontinuity negatively influence product financial performance. Finally, the study also examines how project protocols impact the product innovativeness dimensions. Project protocols, also known as product definitions, describe the general parameters a new product should exhibit (i.e., target segments, product functions and features, base technology, pricing, communication and distribution channels, and required resources) as well as the priorities of the general parameters. Because they guide product design and set priorities and have been found to be a dominant driver of product financial performance, project protocols are important. The present study enhances understanding of how project protocols influence the dimensions of product innovativeness, finding that project protocols positively impact product financial performance indirectly through product advantage and marketing discontinuity.