Resale price maintenance: A managerial perspective

Managers can improve firm profits by selecting the appropriate pricing strategy. In this article, we show how managers can use one particular controversial pricing strategy—resale price maintenance (RPM)—to enhance firm profits. We first discuss the antitrust treatment of RPM, both in the United States and internationally. Then we examine the economic effects of implementing RPM in several key contexts: product promotion, quality certification, prestige goods, and online retail. We also discuss the effects of RPM on entry of new firms.     

A longitudinal examination of the impact of quality perception gap on brand performance in the US Automotive Industry

A quality perception gap, defined as the difference between perceived and objective quality, indicates either consumers’ overappreciation or underappreciation of product or brand quality and can have critical effects on performance. The purpose of this research is to examine the impact of a quality perception gap on brand performance and its moderating role in the relationship between marketing-mix signals and performance. Analyses based on a longitudinal dataset from the US automotive industry reveal that the relationship between the quality perception gap and brand performance has an inverted U-shape. Findings also demonstrate that, except for advertising, the impact of marketing signals on performance is higher when the quality of a brand is perceived as higher than its actual quality. Finally, over an 18-year period, the average gap between perceived and objective quality demonstrates a decreasing trend, indicating that the nature of demand in the automotive industry has become more utilitarian.     

Arbitration of Statutory Employment Discrimination Claims in a Nonunion Environment: A Guide to Procedural Fairness

The previous decade has seen an increasing trend toward the use of arbitration to resolve statutory employment discrimination claims. The enforceability of most private sector arbitration agreements arising in a nonunion setting is reviewable under the Federal Arbitration Act. Such arbitration agreements are most often created by management and become a condition of employment. To represent a feasible alternative to court litigation, employers and employees must have confidence that outcomes achieved through the arbitration process will be enforced by the courts as final and binding upon the parties to the dispute. The extent to which an arbitration agreement adequately protects the procedural and remedial rights of the participants is an important issue affecting the probability that a court will enforce the outcome of an arbitration procedure. This paper reviews guidelines provided by the courts and practitioners to aid in the design of an effective and legally enforceable arbitration procedure to resolve statutory employment discrimination claims arising in a private sector nonunion environment.     

Value stocks and market efficiency

We form portfolios based on firm book-to-market equity ratios and apply stochastic dominance tests. Value (high book-to-market) portfolios dominate low book-to-market portfolios. Thus, value stocks are not rationally priced by the market and the book-to-market ratio is not an efficiently priced proxy for equity risk. We also find that the superior performance of value stocks is not due to the January effect.     

Central bank reserve management: Aggregate targets and interest payments on reserves

Tindall and Spencer [1997] presented a dynamic stochastic theory of borrowed reserves that explained the observed nonlinear relationship between borrowing and the spread between the federal funds rate and the discount rate. It showed that borrowed reserves are a function of deposit variation. This paper extends that research, providing a general dynamic model of all key bank reserve aggregates. Nearly all reserve aggregates, which can be used as operating targets by the Federal Reserve, are subject to the influence of deposit variation and are nonlinearly related to the spread between the federal funds rate and the discount rate, complicating their use as targets. Additionally, it is found that the Federal Reserve's proposal to pay interest on bank reserves could generate substantial distortions in reserve aggregate behavior where interest is paid on excess reserves as well as required reserves, effectively resulting in potentially large discount-window policing problems.     

Using the Analytic Hierarchy Process in New Product Screening

The initial screening of a new product idea is critically important. Risky projects (i.e., those with high probabilities of failure) need to be eliminated early before significant investments are made and opportunity costs incurred. Unfortunately, previous research suggests that it is often difficult for managers to "kill" new product development projects once they have begun. Furthermore, recent studies (including some centering on PDMA members) suggest there is much room for improving new product screening, because this decision often is taken informally or unsystematically. Whereas tools such as Cooper's NewProd software are available to aid in the screening decision, management science decision support models for screening are not used frequently. In the present study, the authors illustrate the use of the Analytic Hierarchy Process (AHP) as a decision support model to aid managers in selecting new product ideas to pursue. The need for flexible models that are highly customized to each firm's challenges (such as AHP) to support the screening decision and to generate knowledge that will be used as input for a firm's expert support system is emphasized. The authors then present an in-depth example of an actual application of AHP in new product screening and discuss the usefulness of this process in gathering and processing knowledge for making new product screening decisions. Finally, the authors explain how a customized AHP process can be incorporated into a sophisticated information system or used as standalone support. © 1999 Elsevier Science Inc.     

Manpower impacts of changes in federal budget priorities

This paper presents the results obtained from computer simulations conducted to determine the sentitivity of occupational employment demands to shifting patterns of U.S. Federal expenditures. The general model utilized is described and the effects of four hypothesized shifts in national priorities upon U. S. manpower requirements in the early 1960's are estimated. Selected occupations are classified and ranked according to their sensitivity to changing patterns of resource allocation between military and civilian activities. From these findings implications for economic and manpower forecasting are derived and discussed.The author is senior energy economist with the U. S. Energy Research and Development Administration; this paper was written while he was on the faculty of the University of Illinois at Urbana-Champaign. He is indebted to Hugh Folk, George Judge, and Paul Wells of the University of Illinois, Jack Alterman of the Bureau of Labor Statistics, Beatrice Vaccara of the Office of Business Economics and Anne Carter and Wassily Leontief of Harvard University for helpful comments and criticisms on various aspects of this study, but retains sole responsibility for the contents of this paper and the opinions expressed here. This work was supported in part by a Doctoral Dissertation Grant from the Manpower Administration of the U. S. Department of Labor and in part by the Advanced Research Projects Agency of the Department of Defense under Contract No. DAHCO04-72-C-0001 to the Center for Advanced Computation of the University of Illinois.