Williamson’s Welfare Trade-Off Around the World

Review of Industrial Organization - Fifty years ago, Williamson (Am Econ Rev 58:23, 1968) argued that an efficiency-enhancing merger that reduces production costs but increases market power could...     

Encouraging Tax‐Time Savings with a Low‐Touch,Large‐Scale Intervention: Evidence from the Refund to Savings Experiment

Low‐ and moderate‐income households often struggle to save, but the annual tax refund represents a prime opportunity for these households to save toward their financial goals or build their emergency savings. This paper presents the results of a randomized, controlled experiment embedded in a free tax‐preparation product offered in 2013 to low‐ and moderate‐income households. The experiment involved approximately 470,000 filers and assessed the impact of behavioral interventions on their savings behaviors. The results show that filers exposed to the treatments, which involved the established behavioral‐economics techniques of anchoring, choice architecture, and persuasive messaging, were more likely than a control group to save their tax refund and, on average, saved more of the refund. A follow‐up survey of these tax filers found that the treatments were associated with saving more of the tax refund six months after filing. The findings also show that anchors encouraging filers to deposit certain amounts are more effective than persuasive messaging emphasizing savings.     

Advertising in a new competitive environment: Persuading customers to buy

It is no longer enough for advertisements to make consumers stay in the living room to watch the commercials or stop reading a newspaper article. The message, no matter how memorable, must persuade the consumers that the advertised product is different enough—and good enough—that they should try it.     

Issues for Management Thought and Research

One of the tenets of the editors of The Journal of Product Innovation Management is the principle, probably first enunciated by social scientist Kurt Lewin, that there is nothing more practical than a good theory. That principle is one that draws together academics and practicing managers to the journal's task of advancing the management of product innovation. It is a principle that says to academics that their theories must meet the test of utility, and to managers that it can be useful to develop a theoretical perspective.
Questions of practice and theory emerged in the first two issues of the journal when members of the Editorial Board presented a series of viewpoints on the issues they thought would be significant for the future of product innovation management. These were viewpoints that questioned our current practices and suggested     

A note on vertical integration as entry

This paper examines the incentive for an intermediate product monopolist to integrate forward into a competitively-structured final product industry when that industry has failed to achieve a position of long-run equilibrium. It is shown that the upstream monopolist's profits are increased more by entering the downstream industry than are the profits of other firms unrelated to this industry. Consequently, the monopolist is more likely to overcome whatever entry barriers might exist at the downstream stage. The welfare effects of this form of integration are shown to be positive, and a theoretical foundation is provided for the policy distinction commonly made between vertical integration by a major acquisition versus integration through internal expansion or a toehold acquisition followed by expansion.     

Not All Threats are Created Equal: How Implicitness and Timing Affect the Effectiveness of Threats in Negotiations

The effectiveness of threats in negotiations was examined by exploring two factors likely to affect it: implicitness, or the extent to which the threat mentions what action the perpetrator would take if the target does not comply; and timing, or the time when the threat is stated. Participants were given a negotiation scenario that differed only by the nature of the threat made by their counterpart. The design was a 2 (implicit vs. explicit threat) × 2 (early vs. late threat) factorial design with a control condition (no threat). The study showed that early-implicit and late-explicit threats were both more likely to elicit concessions than early-explicit and late-implicit threats. The two more effective threats were also the ones that made the perpetrator seem less aggressive. Further, perceived credibility mediated the positive effect that late-explicit threats had over late-implicit threats in eliciting concessions. These results support the claim that whether making the threats sanction implicit is effective depends on its timing, as the nature of bargaining moves and perceptions varies over time (Pruitt 1981). They suggest that the way in which a threat is stated may dramatically influence its effect on the target.