Take the money or run? Investors' ethical reputation and entrepreneurs' willingness to partner

Drawing on the multi-principal–agent perspective, this research models the influence of venture capitalists' reputation for ethical behavior on entrepreneurs' willingness to partner decisions. We test our model using a two-study design. Study one, a conjoint experiment, revealed that explicit knowledge of past unethical behavior negatively affects entrepreneurs' willingness to partner. Interaction effects revealed that factors previously shown to influence the entrepreneurs' evaluations—investor value-add and investment track record—become largely contingent upon and often subjugated by investors' ethical reputation. Study two, a traditional between-subjects scenario experiment, revealed that when entrepreneurs develop their own perceptions about the ethicality of an investor's prior behaviors, the ethical dimension remains highly influential. Further, we find that as the consequences of rejecting funding become more severe (e.g., possible bankruptcy), entrepreneurs become increasingly willing to partner with unethical investors. We also find that high fear of failure entrepreneurs are less willing to partner with unethical investors than their low fear of failure counterparts.     

An information-based model of target stock price runup in the market for corporate control

The stock price runup of target firms in the market for corporate control has been anecdotally attributed to inside trading. Moreover, the empirical merger and acquisitions literature documents a time-varying level and duration of the stock price runup of target firms. Using a market microstructure approach, we model stock price runup as a stochastic process that shifts between a random walk without drift and a predictable process dependent on a parsimonious set of state variables. Consistent with the market microstructure literature, predictability in prices can be exploited only by the informed trader. The model is capable of explaining the complex stylized facts observed in stock price runup. It is also consistent with the merger wave literature, as we find that capital liquidity, economic growth, and market valuations drive the complex dynamics of stock price runup.     

Deans' perceptions of published rankings of business programs

Using a survey of college of business deans, the authors investigate perceptions of published rankings of academic programs. Published rankings have become quite prominent, and anecdotal evidence suggests great efforts are being undertaken to be included in rankings or enhance rankings. The authors conducted a survey of business school deans to gain a better understanding of their perceptions of published rankings, and found that the majority of deans included in the survey did not perceive rankings to be reflective of underlying program quality. However, the majority chose to pursue rankings because of the perceived benefits to the university, students, and alumni. The authors also found statistically significant differences in deans' perceptions across universities with different accreditation statuses, sizes, and funding sources.     

Advertising strategy for outbound travel services

When purchasing a travel service, consumers perform multiple information searches. Depending on the accessed information and the type of media for travel service advertisements, consumers make different evaluations on the travel service. Given this context, we propose a consumer persuasion model that reveals the most effective persuasion process for consumers to make purchasing decisions on travel services. For this study, we conducted a comparative analysis to discern effectiveness and limitations between newspapers and TV infomercials; the two major media for travel service advertisements. Based on the results from the analysis, we drew some meaningful managerial implications for travel service advertising strategy.     

A new class of asymptotically efficient estimators for moment condition models

In this paper, we propose a new class of asymptotically efficient estimators for moment condition models. These estimators share the same higher order bias properties as the generalized empirical likelihood estimators and once bias corrected, have the same higher order efficiency properties as the bias corrected generalized empirical likelihood estimators. Unlike the generalized empirical likelihood estimators, our new estimators are much easier to compute. A simulation study finds that our estimators have better finite sample performance than the two-step GMM, and compare well to several potential alternatives in terms of both computational stability and overall performance.     

Bibliometry and nanotechnology: A meta-analysis

As in other fields of science, bibliometry has become the primary method of gaging progress in nanotechnology. In the United States in the late 1990s, a period when policy makers were preparing the groundwork for what would become the National Nanotechnology Initiative (NNI), bibliometry largely replaced expert interviews, then the standard method of assessing nanotechnology. However, such analyses of this sector have tended not to account for productivity. We hope to correct this oversight by integrating economic input and output measurements calculating academic publications divided by the number of researchers, and accounting for government investment in nanotechnology. When nanotechnology journal publication is measured in these ways, the U.S. is not the leader, as has been widely assumed. Rather, it lags behind Germany, the United Kingdom, and France.     

Woodsy the optimal owl: Environmental campaigns, norms, and implications for public goods policy

Norms regarding private provision of a public good (e.g. cutting down on energy use, not littering) can affect the marginal gains from contributing to a public good and therefore people's decisions about contributing to the public good. A model is proposed in which norms of private contributions to a public good can be influenced by public policy, and these norms affect people's self-image, which derives from a comparison of one's own contribution with the norm contribution. In this context, we examine the conditions under which private contributions to a public good are efficient, and the conditions under which policy affecting these norms improves social welfare. We find that (1) a benevolent social planner who fails to account for private provision norms will underprovide the public good, and (2) public policy that attempts to raise the norm contribution of private provision can increase social welfare if the effect of raising the norm does not have an extreme negative effect - either extremely small or extremely large - on peoples' self-image.     

Incentives and the structure of teams

This paper studies the relationship between moral hazard and the matching structure of teams. We show that team incentive problems may generate monotone matching predictions in the absence of complementarities in the production technology. Second, we analyze how complementarity in the underlying technology affects the matching predictions arising due to moral hazard. We find that (i) even when the production technology is strongly complementary, the incentive problem may lead to formation of negatively sorted teams; (ii) as the degree of complementarity increases, the optimal matching structure may switch from positive to negative, solely due to the need to provide incentives.