The influence of C2C communications in online brand communities on customer purchase behavior

Increasingly, consumers use the internet as a vehicle for pre-purchase information gathering. While technical specifications and potentially biased selling points can be gleaned from corporate web sites, online brand communities are becoming essential conduits for the customer-to-customer (C2C) sharing of product information and experiences. This study develops and tests a model of online C2C communications in developing desirable online brand community outcomes. Two studies were used to test the model. In Study 1, a netnography technique was employed and conversations between brand community members were coded and combined with survey data to test the research model. In Study 2 an experiment was conducted to further test the sequence of events in our base model. Our findings show that online brand communities are effective tools for influencing sales, regardless of whether these communities reside on company-owned or independently-owned websites. In addition, we demonstrate interesting asymmetrical effects, whereby the positive information shared by community members has a stronger moderating influence on purchase behavior than negative information. Further, we find that online brand communities are effective customer retention tools for retaining both experienced and novice customers. These findings highlight the need for all firms to carefully consider their online community strategies.     

Mandating vaccination with unknown indirect effects

Social interactions make communicable disease a core concern of public health policy. A prevalent problem is scarcity of empirical evidence informative about how interventions affect illness. Randomized trials, which have been important to evaluation of treatments for noninfectious diseases, are less informative about treatment of communicable diseases because they do not fully reveal the indirect preventive (herd immunity) effect of vaccination on persons who are not vaccinated or are unsuccessfully vaccinated. This paper studies the decision problem faced by a health planner who observes the illness rate that occurs when persons make decentralized vaccination choices and who contemplates whether to mandate vaccination. The planner's objective is to minimize the social cost of illness and vaccination. Uncertainty about the magnitude of the indirect effect of vaccination implies uncertainty about the illness rate that a mandate would yield. I first study a simple representative‐agent setting and derive conditions under which the planner can determine whether mandating vaccination is optimal. When optimal policy is indeterminate, I juxtapose several criteria for decision making—expected utility, minimax, and minimax‐regret—and compare the policies they generate. I then extend the analysis to a more general setting in which members of the population may have heterogenous attributes. I have benefitted from the opportunity to present this work in seminars at the Booth School of Business, University of Chicago, the Department of Economics, University of California at Santa Barbara, and the Schaeffer Center for Health Policy and Economics, University of Southern California. I have also benefitted from the comments of an anonymous reviewer and associate editor.     

Sad or Happy? The Effects of Emotions on Stated Preferences for Environmental Goods

A substantial literature in behavioural science and psychology shows that emotions affect human choices and values. This paper investigates whether such emotional impacts are also present in stated choice experiments for environmental goods. If this were so, it would introduce an additional element of context dependence to the welfare measures derived from such methods, and would be at odds with the rational choice model underlying welfare economics. A laboratory experiment using three different emotion treatments was combined with a stated preference choice experiment concerned with changes in coastal water quality and fish populations in New Zealand. No statistically significant effects of changes in emotional state on estimated preference parameters, willingness to pay or the randomness of choices were found. The paper concludes by questioning, why such a contrast exists with empirical findings in behavioural science.     

LONG‐RUN INEQUALITY AND SHORT‐RUN INSTABILITY OF MEN'S AND WOMEN'S EARNINGS IN CANADA

This paper examines the variability of workers’ earnings in Canada over the period 1982–2006. We decompose the total variance of workers’ earnings into a ‘permanent’ component between workers and a ‘transitory’ earnings instability component over time for given workers. We then investigate the statistical relationships between these components and indicators for the business cycle. The most marked change in earnings variances in Canada since 1982 is the general rise in total earnings variance, which is essentially driven by a quite dramatic rise in long‐run earnings inequality. The patterns across age categories of the two variance components are almost opposite. Long‐run earnings inequality generally rises with age, but earnings instability is seen to generally decline with age, so that earnings instability is markedly highest among entry age workers. Unemployment rate effects are positive on almost all variance measures, while higher unemployment is associated with widened long‐run earnings differentials and greater short‐run earnings instability.     

Opportunity Cost for Free Allocations of Emissions Permits: An Experimental Analysis

An important feature of emissions trading is how emissions permits are allocated. The choice between an auction and free allocation should not influence firms’ production choices nor consumer prices according to economic theory. However, many parties expect the method of allocation to affect product prices. This paper describes an experimental investigation into price determination under a cap-and-trade program with different allocation methods. Participants initially display diverse pricing strategies. However, given a simple economic setting in which earnings depend on behavior, we find that subjects learn to consider the opportunity cost of permits and overall behavior moves toward the economic prediction.     

Aggregation of Efficiency Indices

Measurement of technical efficiency is carried out at many levels of aggregation—at the individual branch, plant, division, or district level; at the company- or organization-wide level; at the industry or sectoral level; or at the economy-wide level. In this paper, we examine the conditions under which these indexes constructed at various levels of aggregation can be consistent with one another—that is, the extent to which efficiency indexes can be consistently aggregated. Unfortunately, our results are discouraging, indicating that very strong restrictions on the technology and/or the efficiency index itself are required to enable consistent aggregation (or disaggregation).     

In the air again: frequent flyer relationship programmes and business travellers' quality of life

This research explores whether frequent flyer programmes somehow add to the quality of life of the frequent business traveller (defined in this study as business flyers who had flown round trip 26 or more times in the past 12 months). A questionnaire was mailed to subscribers of a newsletter for members of frequent air and hotel programmes. Results indicated that frequent flyer programmes contribute positively to frequent business travellers' lifestyles and to their quality of life, perhaps by countervailing some of the negative aspects of frequent business travel. Copyright © 2003 John Wiley & Sons, Ltd.     

Rookies and seasoned recruits: How experience in different levels,firms, and industries shapes strategic renewal in top management

Research summary : This study explores the effect of knowledge integration on strategic renewal. In particular, it examines how executives from different levels and sources influence renewal when added to top management teams (TMT). In contrast to prior work, the study hypothesizes and finds that new outside rookies—those new to top management and the firm—are associated with higher firm growth than other types of executives. We also find that seasoned outsiders—those with prior TMT experience outside the focal industry—contribute to growth only when the existing TMT has a long tenure. The results suggest that the ability of the TMT to integrate new members varies by executive type and has an important effect on incremental strategic renewal. Managerial summary : Conventional wisdom holds that firms are better off hiring those who can demonstrate prior experience and skill in tasks as close as possible to the job. In the realm of the top management team (TMT), however, we find that many firms benefit from hiring rookies from other firms who are new to the top management team level. These candidates bring useful knowledge of the operations of competitors and other firms, and they are easier to socialize and integrate with the existing team. While more experienced senior leaders may bring valuable strategic knowledge, this study suggests that only top management teams with long shared experience can weather the disruption that they cause to realize the potential benefits. Copyright © 2016 John Wiley & Sons, Ltd.     

Contract farming: opportunity cost and trade‐offs

An important literature has established that participation in contract farming leads to higher incomes and has a number of other beneficial effects on the welfare of participating households. Yet no one has looked at the opportunity cost of and the various trade‐offs involved in participating in contract farming. I look at the relationship between participation in contract farming and income from (i) livestock, (ii) labor markets, (iii) nonfarm businesses, and (iv) agricultural sources other than livestock and contract farming and (v) unearned income. Using data from Madagascar, I find that participation in contract farming is associated with a 79% decrease in how much income per capita the average household derives from labor markets and a 47% decrease in how much income per capita it derives from nonfarm businesses, but also with a 51% increase in how much income per capita the average household derives from agricultural sources other than livestock and contract farming, possibly due to technological spillovers. Thus, even though contract farming has been shown to improve welfare in multiple ways in this context, it looks as though those gains come at the cost of an “agricultural involution” on the part of participating households, who seem to turn away from non‐agricultural activities. This has important implications for structural transformation narratives.