David K.K.Chan and Law Mei-ling:Incorporate Business Elements into Philanthropy

Life and philanthropy are eternal themes in human history.Iflifesymbolizes a miraculous gift,thenphilanthropycan be considered as the dramatic highlight and spectacular display of one's life process. With their life-long dedication to the causes of philanthropy,Dr.David K.K.Chan and Ms.Law Meiling have successfully explored a new operational model of philanthropy,which is the combination of business elements with philanthropy.This model must,first of all,resolve those issues that are related to funding,a...     

Overreaction to Fearsome Risks

When risks threaten, cognitive mechanisms bias people toward action or inaction. Fearsome risks are highly available. The availability bias tells us that this leads people to overestimate their frequency. Therefore, they also overreact to curtail the likelihood or consequences of such risks. More generally, fear can paralyze efforts to think clearly about risks. We draw on a range of environmental risks to show the following: (1) Fear leads us to neglect probability of occurrence; (2) As fearsome environmental risks are usually imposed by others (as externalities), indignation stirs excess reaction; (3) We often misperceive or miscalculate such risks. Two experiments demonstrate probability neglect when fearsome risks arise: (a) willingness-to-pay to eliminate the cancer risk from arsenic in water (described in vivid terms) did not vary despite a 10-fold variation in risk; (b) the willingness-to-accept price for a painful but non dangerous electric shock did not vary between a 1 and 100% chance. Possible explanations relate to the role of the amygdala in impairing cognitive brain function. Government and the law, both made by mortals and both responding to public pressures, similarly neglect probabilities for fearsome risks. Examples relating to shark attacks, Love Canal, alar and terrorism are discussed.     

Investor Overreaction to Earnings Surprises and Post‐Earnings‐Announcement Reversals

Prior literature suggests that the market underreacts to the positive correlation in a typical firm's seasonal earnings changes, which leads to a post‐earnings‐announcement drift (PEAD) in prices. We examine the market reaction for a distinct set of firms whose seasonal earnings changes are uncorrelated and show that the market incorrectly assumes that the earnings changes of these firms are positively correlated. We also document that positive (negative) seasonal earnings changes in the current quarter are associated with negative (positive) abnormal returns in the next quarter. Thus, we observe a reversal of abnormal returns, consistent with a systematic overreaction to earnings, rather than the previously documented PEAD. Additional analysis indicates that financial analysts similarly overestimate the autocorrelation of these firms, although to a lesser extent. We also find that the magnitude of overestimation and the subsequent price reversal are inversely related to the richness of the information environment. Our results challenge the notion that investors recognize but consistently underestimate earnings correlation and provide a new perspective on the inability of prices to fully reflect the implications of current earnings for future earnings. That is, we show that investors predictably overestimate correlation when it is lacking, but underestimate it when it is present.     

Mapping your competitive position

A price-benefit positioning map helps you see, through your customers' eyes, how your product compares with all its competitors in a market. You can draw such a map quickly and objectively, without having to resort to costly, time-consuming consumer surveys or subjective estimates of the excellence of your product and the shortcomings of all the others. Creating a positioning map involves three steps: First, define your market to include everything your customers might consider to be your product's competitors or substitutes. Second, track the price your customers actually pay (wholesale or retail? bundled or unbundled?) and identify what your customers see as your offering's primary benefit. This is done through regression analysis, determining which of the product's attributes (as described objectively by rating services, government agencies, R&D departments, and the like) explains most of the variance in its price. Third, draw the map by plotting on a graph the position of every product in the market you've selected according to its price and its level of primary benefit, and draw a line that runs through the middle of the points. What you get is a picture of the competitive landscape of your market, where all the products above the line command a price premium owing to some secondary benefit customers value, and all those below the line are positioned to earn market share through lower prices and reduced secondary benefits. Using examples as varied as Harley-Davidson motorcycles, Motorola cell phones, and the New York restaurant market, Tuck professor D'Aveni demonstrates some of the many ways the maps can be used: to locate unoccupied or less-crowded spaces in highly competitive markets, for instance, or to identify opportunities created through changes in the relationship between the primary benefit and prices. The maps even allow companies to anticipate--and counter-- rivals' strategies. R eprint RO711G     

Libraries in transition to a marketing orientation: are librarians' attitudes a barrier?

• This study examines librarians' attitudes toward the marketing of library services, as libraries continue their transition to a marketing orientation. Although prior studies had observed misunderstandings and hostility to marketing among librarians, most previous discussions of this topic were either speculative or based on extremely small samples. In order to provide more evidence in this matter, a large‐scale survey of members of the New Jersey Library Association (NJLA) was conducted. A ‘Pro Marketing’ scale was introduced and used to segment participants with respect to their attitudes. The findings indicate that most respondents expressed relatively positive attitudes toward marketing, but that more positive attitudes were expressed by public librarians than school or college/university librarians, and by administrators as opposed to reference and technical services librarians. Illustrative respondent comments and implications for library management are included.

Copyright © 2007 John Wiley & Sons, Ltd.     

The online laboratory: conducting experiments in a real labor market

Online labor markets have great potential as platforms for conducting experiments. They provide immediate access to a large and diverse subject pool, and allow researchers to control the experimental context. Online experiments, we show, can be just as valid—both internally and externally—as laboratory and field experiments, while often requiring far less money and time to design and conduct. To demonstrate their value, we use an online labor market to replicate three classic experiments. The first finds quantitative agreement between levels of cooperation in a prisoner’s dilemma played online and in the physical laboratory. The second shows—consistent with behavior in the traditional laboratory—that online subjects respond to priming by altering their choices. The third demonstrates that when an identical decision is framed differently, individuals reverse their choice, thus replicating a famed Tversky-Kahneman result. Then we conduct a field experiment showing that workers have upward-sloping labor supply curves. Finally, we analyze the challenges to online experiments, proposing methods to cope with the unique threats to validity in an online setting, and examining the conceptual issues surrounding the external validity of online results. We conclude by presenting our views on the potential role that online experiments can play within the social sciences, and then recommend software development priorities and best practices.     

Children aged 9-14 living in disadvantaged areas in England: Opportunities and barriers for cycling

The aim of this paper is to take a holistic perspective to explore levels of cycling and opportunities and barriers to increase children’s safer cycling in disadvantaged areas in England. The study was one part of a larger study which explored the factors underlying the high level of road traffic casualties especially among children in the most disadvantaged areas of England and to explore how this impacts on mobility and quality of life. The methods involved a cross sectional survey comprising school based questionnaire surveys with children aged 9-14 and focus groups with parents who had children within this age range. The surveys were conducted in 2007 and the focus groups during 2008. 4286 children completed the survey and eight focus groups were held. Bike ownership (77%) was high, use in previous week moderate (39%) but only 2% cycled to school. Ownership was significantly lower in minority ethnic groups. Despite young children’s strong preference to travel by cycle (30%) than walk or go by car, most parents felt it was too hazardous. It is unlikely that these findings would be any different from the rest of England, however the combination of environmental and social factors may elevate the risks for young cyclists in these areas. This paper concludes that a number of barriers exist to increasing levels of cycling among children living in disadvantaged areas particularly amongst ethnic groups. These barriers could be addressed by environmental modifications to reduce speeds and by reducing the levels of antisocial driving and riding in residential areas and around destinations where children travel, by providing cycle training to improve children’s skills and parent’s confidence, and by providing secure storage facilities for bikes. Until these barriers are addressed it is unlikely that cycling will increase despite the strong preferences children have to travel by bike. Such preferences to cycle provide an opportunity for local authorities to act on.     

Managing Public IP with Downstream Interfirm Research Spillovers

The paper examines the economic impact of pricing and access to public basic research‐related intellectual property (IP) in the presence of downstream interfirm spillovers using a Salop circle model of monopolistic competition. Depending on the nature and extent of spillovers and with free access to upstream basic research, firm entry can be excessive, insufficient, or socially optimal. When interfirm lump‐sum spillovers are absent or sufficiently small, competitive entry is excessive, so policies that restrict access to basic research IP can enhance social welfare. When lump‐sum research spillovers are sufficiently large, policies to induce entry and a clustering of downstream research activity can be welfare enhancing. Le présent article examine, à l’aide du modèle de Salop de concurrence monopolistique positionnant les firmes sur un cercle, l’impact économique de l’attribution d’une valeur à la propriété intellectuelle de la recherche fondamentale financée par des fonds publics et de l’accès à cette recherche lorsqu’il y a des retombées entre firmes en aval. Selon la nature et l’étendue des retombées et compte tenu de l’accès gratuit à la recherche fondamentale en amont, l’entrée de firmes peut‐être excessive, insuffisante ou optimale sur le plan social. Lorsque les débordements de la recherche vers d’autres firmes sont absents ou faibles, le niveau d’entrée de concurrence parfaite est excessif. Dans ce cas, les politiques qui restreignent l’accès à la recherche fondamentale financée par des fonds publics peuvent accroître le bien‐être social. Lorsque les débordements de la recherche sont assez importants, les politiques mises en ?uvre pour encourager l’entrée et le regroupement des activités de recherche en amont peuvent améliorer le bien‐être.