Ad wearout wearout: How time can reverse the negative effect of frequent advertising repetition on brand preference

This paper reports a surprising reversal in the effect of advertising repetition over time. A field study shows higher annoyance with a more frequently advertised brand at the time of advertising, but greater preference for this same brand several weeks later. A longitudinal online experiment replicates the reversal in brand preference across four time points and tests an underlying mechanism for this reversal. It shows that initial annoyance with frequent ad repetition is highly susceptible to decay over time, whereas brand memory remains relatively stable. Through these two processes, brands with heavier advertising exposure move over time from lower preference to higher preference. Finally, a third experiment demonstrates a crucial condition for this reversal — product relevance at the time of consideration. This study shows that the reversal occurs only if at the later time the product category is relevant. We discuss the substantial implications of these findings for marketing theory and practice.     

Leadership Discourse, Culture, and Corporate Ethics: CEO-speak at News Corporation

We explore the language of leadership of global media mogul Rupert Murdoch in 2010, the year before the phone-hacking scandal in the UK came to public attention. Subsequent public enquiries in the UK exposed unethical conduct by staff of News Corporation, a global corporation whose Chairman and CEO was Rupert Murdoch. We focus on the ethical climate fashioned by ‘A Letter from Rupert Murdoch’ that appeared in the opening pages of the annual report of News Corporation for the year ended 30 June 2010. Plausibly, Murdoch’s discourse in that letter helped condition the inapt, unethical conduct of News Corporation staff. We highlight the cultural and ethical signs that were embedded in Murdoch’s letter and which reflected the company’s tone at the top and ethical values. We identify signs of a perverse leadership thinking that possibly help explain the inappropriate cultural values and ethical behaviours that were revealed subsequently in evidence presented to public inquiries.     

BOOSTING STRATEGY WITH AN ONLINE COMMUNITY

A programme that merged online communities with strategic development and implementation at Nokia has provided valuable lessons about the new ways employees are able to engage and interact. Lynda Gratton and Joel Casse tell how "deep involvement" evolved into the "Booster Programme".     

The median voter and the median consumer: Local private goods and population composition

When a product's product provision entails fixed costs, it will be made available only if a sufficient number of people want it. Some products are produced and consumed locally, so that provision requires not only a large group favoring the product but a large number nearby. Just as local governments provide public goods appealing to individuals sharing the median voter's preferences for local public goods, product markets may provide an analogous benefit to individuals sharing living communities whose consumers tend to share his preferences in private goods. Using zip code level data on chain restaurants and restaurants overall, this paper documents how the mix of locally available restaurants responds to the local mix of consumers, with three findings. First, based on survey data on chain restaurant patronage, restaurant preferences differ substantially by race and education. Second, there is a strong relationship between restaurants and population at the zip code level, suggesting that restaurants' geographic markets are small. Finally, the mix of locally available chain restaurants is sensitive to the zip code demographic mix by race and by education. Hence, differentiated product markets provide a benefit—proximity to preferred restaurants—to persons in geographic markets whose customers tend to share their preferences.     

An ambient tax approach to invasive species

Invasive species have become an issue of increasing concern in recent years. Invasive species are species that are not native to an area but are imported either intentionally or unintentionally and become established. A primary pathway for introduction is the ballast water of ships. Although not all imported species become invasive, those that do cause extensive damage to ecosystems and have been blamed for the endangerment of numerous native species. In many cases, release of non-native species can be prevented, either through open-ocean ballast water exchange, retention of ballast water, or other biosecurity measures. However, policies designed to encourage such actions face several specific challenges. The difficulty of linking an invasion to a specific vessel and of monitoring individual vessels' care makes using standard environmental liability plans difficult if not impossible. In this paper, we present an alternative policy option, that of an ambient tax. Building on the work of Segerson [Segerson, Kathleen, 1988. Uncertainty and incentives for nonpoint pollution control. Journal of Environmental Economics and Management, 15: 87-98.], we show that an ambient tax can ensure socially optimal behavior in both the short-run and the long-run with minimal vessel specific information.     

The Effects of Depression on Leisure: Varying Relationships Between Enjoyment,Sociability, Participation,and Desired Outcomes in College Students

Depression leads to negative mood and affect, difficulty experiencing enjoyment in chosen activities (anhedonia), and a reduced desire for social interaction. This study compared 974 college students with different levels of depression (minimal, mild, and moderate to severe) relative to their desired outcomes for leisure, and their enjoyment of, participation and sociability in, different types of chosen leisure activities. Findings indicated consistency in their desired outcomes students, yet there were differences in how social they chose to be, the extent to which they partook, and how much enjoyment they perceived during their leisure participation. In addition, in several activities only a mild state of depression was sufficient to produce differences in leisure involvement. The results question whether depressed individuals experience “leisure” in the same manner as nondepressed individuals and whether elements of “leisure” experiences stressing enjoyment and sociability are applicable for individuals with differing levels of nonclinical depression.     

Principal component analysis of yield curve movements

An important issue in interest rate modeling is the number and nature of the random factors driving the evolution of the yield curve. This paper uses principal component analysis to examine (1) the inherent dimension of historical yield curve changes indicated by the significance of eigenvalues of the covariance matrix, (2) the practical dimension determined by a variance threshold, (3) the shape of the yield curve change associated with the first principal component, and (4) the persistence of this shape over time. We find that although the first two components explain 93% of the sample variation within a 90% confidence interval, the remaining components make statistically significant contribution to the covariance matrix. Consequently, we can establish a practical limit on the dimension only if we are willing to designate a threshold error variance. Further, our results on the persistence of the shape of the yield curve shift associated with the first component depend upon this threshold. If all components are included, the hypothesis that the shape persists between two sample time periods is rejected. On the other hand, if all but the first six components are eliminated, the hypothesis is not rejected.     

Off Track: The Disappearance of Tracking Stocks

During the two decades following the first announcement of a tracking stock issue by General Motors in 1984, over 50 new tracking stocks were created. The value of a tracking stock is supposed to reflect the performance of a division or operation of a firm, but does not have a direct claim on the division's assets or income. The voting rights of the tracking stock are only for the parent corporation, with no direct voting rights for the tracked division. The claimed benefits of issuing tracking stock include the use of internal capital markets, additional disclosure of the firm's operations, reduction of agency costs, the ability to directly compensate divisional management on performance, and greater analyst following and liquidity. But the last new issue of a tracking stock took place in 2001. And few, if any, tracking stocks still trade. This study examines how and why tracking stocks have largely stopped being issued, and why so many have been dissolved either through exchanges of shares, or sales or spin‐offs of the business units with tracking stock.