More than Just an Opinion: The Effect of Verbal Self‐Expression on Consumer Choice

In an ever‐widening range of occasions, consumers have the opportunity to comment and express their opinions on brands and products. However, little is known about how voicing opinions about the choice options before actually choosing might affect consumer choice, and specifically liking of choice. This paper proposes that pre‐choice opinion expression undermines the effect of post‐choice bolstering, because opinion sufficiently satisfies self‐expressive needs and therefore supersedes the use of subsequent choice as a self‐expressive resource. This proposition is based on the assumption that opinion can psychologically substitute for choice, because the two represent alternative routes to self‐expression. Two experiments provide empirical support for this hypothesis. Study 1 showed that after articulating their opinions about the choice options, participants were less likely to idealize their choices, and this effect was mediated by a change in the construal of choice as self‐expression. Study 2 further showed that this effect is moderated by public versus private occasions of opinion voicing and by individual differences in the value of expression. Together, findings support that opinion is enough to express the self, and if such an opportunity is made available prior to choosing, consumers’ liking of their choices is weakened.     

Imprint

Imprint

Imprint     

A Note on Forecasting the Euro: Do Forecasters Have an Asymmetric Loss Function?

Based on the approach advanced by Elliott, Komunjer, and Timmermann (2005 Elliott, G., Komunjer, I., & Timmermann, A. (2005). Estimation and testing of forecast rationality under flexible loss. Review of Economics Studies, 72, 1107–1125. doi: 10.1111/0034-6527.00363[Crossref], [Web of Science ®] , [Google Scholar]), we analyzed whether the loss function of a sample of exchange-rate forecasters is asymmetric in the forecast error. Using forecasts of the dollar/euro exchange rate, we found that the shape of the loss function varies across forecasters. Some forecasters appear to make forecasts under an asymmetric loss function, while a symmetric loss function seems to describe well the loss function of other forecasters. Accounting for an asymmetric loss function does not necessarily make forecasts ‘look’ rational.     

New Technologies And The Demand For Heterogeneous Labor: Firm-Level Evidence For The German Business-Related Service Sector

This paper investigates the impact of modern information and communication technologies on the demand for heterogeneous labor. It starts with an interrelated factor demand system. The ‘desired’ level of employment which is needed in such models, is derived from a Generalized Leontief cost function with quasi-fixed factors. Firm-level, cross-sectional data taken from an innovation survey in the service sector are used in the empirical analysis. The model is estimated by a trivariate ordered probit model. Evidence in favor of skill-biased technological change in the fast-growing German business-related services sector is found. ‘Ibe paper suggests a new method of calculating skill-specific and firm-specific labor cost from information on total labor cost and the share of each skill group in total employment only.     

The effect of foreign partner network embeddedness on international joint venture failure: Evidence from European firms’ investments in emerging economies

Access to trusted information about potential local partners is a critical factor for international joint venture (IJV) stability and success in emerging economies. We build on social network theory and examine how foreign investors can benefit from their alliance networks in accessing reliable information on the availability, resources, and behavior of potential local IJV partners. More specifically, we examine positional embeddedness in networks and network density and how these factors help foreign firms mitigate behavioral uncertainty in IJVs and thus reduce the likelihood of failure. We use data on 349 IJVs formed by 132 European firms in emerging economies during the 1995–1997 period and event history analysis to test our hypotheses. Our findings indicate that having an alliance network is a necessary but insufficient condition to mitigate behavioral uncertainty of local partners. We find that only densely tied networks offer benefits of reliable information on potential local partners that ensure the longevity of IJVs and that a central position in an alliance network translates into lower IJV failure.     

Trust during retail encounters: A touchy proposition

Adopting an interpersonal communication perspective, this study examines the propositions that a salesperson's touch increases trust, which increases product evaluations and purchase intention. These relationships are evaluated in a contact and non-contact culture, with need for touch (NFT) examined as an additional moderator. An exploratory series of in-depth interviews provides an initial understanding of these relationships, followed by a 2 (touch/no touch condition) × 2 (consumers in France/Germany) experiment with wine serving as the example category. The findings indicate that touch does not uniformly instill trust in customers. Instead a salesperson's touch relates to greater trust only when consumers have an inherent NFT or when they are from a culture where personal touching behavior is less prevalent. Trust, in turn, relates positively to evaluations of product attractiveness, quality, and to purchase intention.     

On derivatives with illiquid underlying and market manipulation

In illiquid markets, option traders may have an incentive to increase their portfolio value by using their impact on the dynamics of the underlying. We provide a mathematical framework to construct optimal trading strategies under market impact in a multi-player framework by introducing strategic interactions into the model of Almgren [Appl. Math. Finance, 2003, 10(1), 1–18]. Specifically, we consider a financial market model with several strategically interacting players who hold European contingent claims and whose trading decisions have an impact on the price evolution of the underlying. We establish the existence and uniqueness of equilibrium results for risk-neutral and CARA investors and show that the equilibrium dynamics can be characterized in terms of a coupled system of possibly nonlinear PDEs. For the linear cost function used by Almgren, we obtain a (semi) closed-form solution. Analysing this solution, we show how market manipulation can be reduced.