Comparative advertisements and schadenfreude: when and why others’ unfortunate choices make us happy

Comparative advertisements often feature situations depicting consumers who use competitors’ brands being subjected to misfortunes. We examine schadenfreude, the pleasure derived from the misfortunes of others, as an affective response elicited by comparative ads, as well as consumers’ beliefs in tempting fate as a heretofore unexamined influence thereof. Consistent with our theory, we show that comparative ads depicting the misfortunes involving lower-quality (vs. higher-quality) competitors elicit greater schadenfreude, and that this is because choosing the former is perceived to tempt fate and to be more deserving of misfortune than the latter. Moreover, heightened levels of schadenfreude in turn lead to more positive attitudes and increased purchase intentions among consumers who are more (vs. less) reluctant to tempt fate.     

INTERGOVERNMENTAL GRANTS AND THE POSITIONING OF PRESIDENTIAL PRIMARIES AND CAUCUSES: EMPIRICAL EVIDENCE FROM THE 1992, 1996, AND 2000 ELECTION CYCLES

The present study tests the theory that states can impact the size of the grants they receive (per capita) from the federal government by becoming pivotal players in the federal electoral (primary/caucus) process. That is, by rearranging their presidential primary and caucus dates, states can play an important role in determining the field of candidates for the two major political parties in the United States. States are then likely to be rewarded within the budgetary process at the federal level, which begins with the executive branch. Results from a simultaneous equation system suggest that the impact of the average movement of primaries/caucuses in the sample period (10.36 days closer to 1 January) results in an increase of federal grants of $362 million to $1.2 billion (over a two-year period) for the average state. These results are consistent with the current pattern in the American political process of more front-ended presidential primaries and caucuses.     

Evaluating the impact of government land use policies on tree canopy coverage

Many cities around the world are experiencing the negative effects associated with not sustaining a sufficient level of tree canopy coverage. Tree canopy provides environmental benefits such as clean water and air, erosion prevention, climate control, and native species habitat and provides economic benefits such as higher housing values and lower energy expenditures. We study local government policies in a large U.S. metropolitan area (the Atlanta Metropolitan Statistical Area) to find which policies perform the best at preserving or increasing urban forests. Empirical analysis reveals that a set of effective tree ordinance clauses, zoning ordinances, and having high quality smart growth projects in the community all help in preserving tree canopy in economically and environmentally meaningful amounts. Other actions, such as simply having a tree ordinance, designating a key management person in charge of tree programs, the presence of a tree board, and multiple communication channels were shown to be ineffective for our data set. Because benefits from tree canopy accrue to the local government's budget, to residents and to business owners, the entire community should gain from the passage of effective policies to preserve their local tree canopy. Estimated economic benefits from preserving tree canopy through an effective set of public policies are in the range of $10–15 million annually in an average county, mostly due to savings on stormwater management.     

Vorwort der Herausgeber

Ohne Zusammenfassung     

Philanthropy's new agenda: creating value

During the past two decades, the number of charitable foundations in the United States has doubled while the value of their assets has increased more than 1,100%. As new wealth continues to pour into foundations, the authors take a timely look at the field and conclude that radical change is needed. First, they explain why. Compared with direct giving, foundations are strongly favored through tax preferences whose value increases in rising stock markets. As a nation, then, we make a substantial investment in foundation philanthropy that goes well beyond the original gifts of private donors. We should therefore expect foundations to achieve a social impact disproportionate to their spending. If foundations serve merely as passive conduits for giving, then they not only fall far short of their potential but also fail to meet an important societal obligation. Drawing on Porter's work on competition and strategy, the authors then present a framework for thinking systematically about how foundations create value and how the various approaches to value creation can be deployed within the context of an overarching strategy. Although many foundations talk about "strategic" giving, much current practice is at odds with strategy. Among the common problems, foundations scatter their funding too broadly, they overlook the value-creating potential of longer and closer working relationships with grantees, and they pay insufficient attention to the ultimate results of the work they fund. This article lays out a blueprint for change, challenging foundation leaders to spearhead the evolution of philanthropy from private acts of conscience into a professional field.     

Regulating managed care firms: the Connecticut plan

Virtually every state in the country, as well as the federal government, is either considering or has recently considered legislation to regulate utilization review/managed care companies. Despite the magnitude of this issue, few legislative bodies have expended the resources to study the form that regulation should take. Recently, Connecticut, which has seen considerable growth in utilization review within managed care programs that insure Connecticut residents, funded such a study. This article, authored by two of the study's participants, reviews the issues and explains the study's recommendations.     

Economic models of speculative attacks and the drachma crisis of May 1994

Speculative attacks on fixed or ‘fixed but adjustable’ exchange rate regimes seem to have become a standard feature of the landscape of foreign exchange markets. The supposed excesses of seemingly untethered financial markets have been documented for some time, but only recently have the concerted attacks by speculators on exchange-rate regimes begun to occupy the popular imagination.Economic models of this phenomenon, however, have been around for some time, and are useful in characterizing the real-world speculative attacks that have occurred in the last 10–15 years in a number of countries. In this paper, we provide a brief overview of one such model. We also sketch some implications of that model for the speculative attack on the Greek drachma in May 1994.     

The competitive advantage of corporate philanthropy

When it comes to philanthropy, executives increasingly see themselves as caught between critics demanding ever higher levels of "corporate social responsibility" and investors applying pressure to maximize short-term profits. In response, many companies have sought to make their giving more strategic, but what passes for strategic philanthropy is almost never truly strategic, and often isn't particularly effective as philanthropy. Increasingly, philanthropy is used as a form of public relations or advertising, promoting a company's image through high-profile sponsorships. But there is a more truly strategic way to think about philanthropy. Corporations can use their charitable efforts to improve their competitive context--the quality of the business environment in the locations where they operate. Using philanthropy to enhance competitive context aligns social and economic goals and improves a company's long-term business prospects. Addressing context enables a company to not only give money but also leverage its capabilities and relationships in support of charitable causes. The produces social benefits far exceeding those provided by individual donors, foundations, or even governments. Taking this new direction requires fundamental changes in the way companies approach their contribution programs. For example, philanthropic investments can improve education and local quality of life in ways that will benefit the company. Such investments can also improve the company's competitiveness by contributing to expanding the local market and helping to reduce corruption in the local business environment. Adopting a context-focused approach goes against the grain of current philanthropic practice, and it requires a far more disciplined approach than is prevalent today. But it can make a company's philanthropic activities far more effective.     

Strategy and society: the link between competitive advantage and corporate social responsibility

Governments, activists, and the media have become adept at holding companies to account for the social consequences of their actions. In response, corporate social responsibility has emerged as an inescapable priority for business leaders in every country. Frequently, though, CSR efforts are counterproductive, for two reasons. First, they pit business against society, when in reality the two are interdependent. Second, they pressure companies to think of corporate social responsibility in generic ways instead of in the way most appropriate to their individual strategies. The fact is, the prevailing approaches to CSR are so disconnected from strategy as to obscure many great opportunities for companies to benefit society. What a terrible waste. If corporations were to analyze their opportunities for social responsibility using the same frameworks that guide their core business choices, they would discover, as Whole Foods Market, Toyota, and Volvo have done, that CSR can be much more than a cost, a constraint, or a charitable deed--it can be a potent source of innovation and competitive advantage. In this article, Michael Porter and Mark Kramer propose a fundamentally new way to look at the relationship between business and society that does not treat corporate growth and social welfare as a zero-sum game. They introduce a framework that individual companies can use to identify the social consequences of their actions; to discover opportunities to benefit society and themselves by strengthening the competitive context in which they operate; to determine which CSR initiatives they should address; and to find the most effective ways of doing so. Perceiving social responsibility as an opportunity rather than as damage control or a PR campaign requires dramatically different thinking--a mind-set, the authors warn, that will become increasingly important to competitive success.