Validity and reliability of the confirmation of expectations paradigm as a determinant of consumer satisfaction

The Validity of the Confirmation of Expectations paradigm with respect to consumer satisfaction was examined on the basis of the intercorrelations between five variables of the satisfaction process i.e., Expectations, Postpurchase Evaluation, Confirmation of Expectations, Overall Satisfaction, and Repurchase. The results showed that the confirmation of expectations was a confounding variable in the satisfaction process. The major explanation for this variable not fitting into the process was the low reliability of the gain scores or difference scores (i.e., subtraction of prepurchase expectations from post-purchase evaluation) used for the computation of the confirmation of expectations. The major conclusions of this study were as follows: (1) If the purpose of the research is only to predict satisfaction or repurchase then it is best to depend upon direct measures such as postpurchase ratings. (2) If the purpose of research is diagnostic analysis then it is better to apply the confirmation of expectations concept. But for this later application it is important to develop reliable scales to measure the construct of confirmation.     

Cost leadership strategy and experience curves

Investing in cost leadership by rapidly riding down the experience curve is a common way to establish a firm's competitive advantage. Its success depends, in part, on the factors that underlie the experience curve. In this paper we make the distinction between cost declines that occur at any point in time and cost declines that may occur over time. This leads us to consider a revised experience concept in which the dynamic interrelationship between a firm's production rate, cumulative production and unit cost is explicitly considered. We provide a detailed analysis of various scale-learning relationships and their strategic implications for establishing competitive advantage through an investment in cost leadership. We also prove analytically that such investment should take place only in the presence of learning.     

Opening the Pandora's box? Trade openness and informal sector growth

This article constructs a labour transition model combining the features of job loss and job creation in the formal sector of an economy. The theoretical model examines the impact of trade liberalization on net job transition from formal to informal sector. In the light of our model we establish certain pre-conditions based on simulations under which trade liberalization is accompanied by rising informal sector. The model outcome conforms to the empirical evidence of rising informality with openness which we find in 18 Central Eastern European and Former Soviet Union countries.     

Relative performance as a strategic commitment mechanism

Can managers' personality traits be of use to profit maximizing firm owners? We investigate the case where managers have a variety of attitudes toward relative performance that are indexed by their type. We consider two stage games where profit maximizing owners select managers in the first stage, and these managers, knowing each other's types, compete in a duopoly game in the second stage. The equilibria of various types of competition are derived and comparisons are made to the standard case where managers are profit maximizers. We show that managers' types can be used as a strategic commitment device that can increase firm profits in certain environments. Copyright © 2002 John Wiley & Sons, Ltd.