Drivers of customer likelihood to join grocery retail loyalty programs. An analysis of reward programs and loyalty cards

This paper aims to identify which personal features of customers may determine their likelihood to join a grocery retail loyalty program. We consider five aspects: price sensitivity, search for variety, shopping enjoyment, attitude toward loyalty schemes, and one personality trait: privacy concerns. Some of these variables have already been explored in the literature. Where our research breaks new ground is in establishing the difference between profiles of customers attracted by two of the most common types of loyalty programs currently used by grocery retail firms: a reward program and a loyalty card. The two kinds of program evidence differences in how they are managed, and we posit that the drivers of likelihood to take part in each are different. The study was carried out using logistic regression with a sample of 600 clients of a Spanish supermarket chain. Findings show that one particular type of customer is more likely to take part in these schemes: those displaying little shopping enjoyment, who are greatly concerned with privacy, and who show a favorable attitude toward loyalty programs in general. Furthermore, as expected, differences were observed between drivers of participation likelihood in reward programs and loyalty cards.     

Market illiquidity and bounds on European option prices

The paper analyses the impact of illiquidity of a stock paying no dividends on the pricing of European options written on that stock. In particular, it is shown how illiquidity generates price bounds on an option on this stock, even in the absence of other imperfections, such as transaction costs and trading constraints, or the assumption of stochastic volatility. Moreover, price bounds are shown to be asymmetric with respect to the option price under perfect liquidity. This fact explains, under some conditions, the appearance of a smile effect when the implied volatility is estimated from the mid-quote.     

Education, corruption, and the distribution of income

We examine how the interaction between education and corruption affects institutional reform and economic development. While corruption reduces average income and education, education increases not only output and hence potential corruption rents, but also produces more informed electorates that better monitor government actions. We find that economies with intermediate levels of education remain in a poverty trap since the level of skills creates sufficient corruption rents but not enough monitoring. Economies with low or high levels of education can escape the poverty trap, and inequality plays a key role in determining whether this occurs through a change in institutions or an expansion of education.     

A parsimonious model to forecast financial distress,based on audit evidence

This paper provides evidence that audit reports convey relevant evidence for inferring the existence of underlying, unrevealed, financial imbalances. Unlike previous works, which studied US listed-firms bankruptcy, our research deals with Spanish non-financial SMEs under financial stress. Our results indicate that the audit of distressed SMEs has several distinctive features: higher auditor rotation, more qualified reports, and non-compliance with deadlines to approve and file the annual financial statements. We use this evidence to build and test a parsimonious and reliable forecast model. Several implications for auditors’ independence, information quality, and failure forecast are discussed.     

The management perception of the strategic outsourcing of services: An empirical examination in the hotel sector

This work will analyse the strategy of outsourcing, or the predisposition on the part of a firm to entrust some of its services to a third party. The research will focus on discovering empirically the role that this strategy plays in hotels, and in order to do this we will carry out an analysis of hotel managers' perceptions regarding outsourcing based on the main advantages as well as the drawbacks and barriers which using the strategy can involve, with a view to determining which of these are related to a predisposition to outsource. The results of the research suggest that the main reasons which determine outsourcing are of a strategic rather that cost-reducing nature. Despite the fact that although current outsourcing is conditioned by the cost factor alone, any future increase in the use of the strategy will be determined exclusively by factors of a strategic nature. With respect to the disadvantages of outsourcing which tend to limit the use of the strategy, we will see that these are related to loss of control and autonomy together with a distrust of external suppliers. This work will enable us to assess the extent of the existing demand for outsourcing main services as well as those factors which determine and limit the outsourcing strategy and which have prevented a large number of services where outsourcing would be applicable from being outsourced to the present date. Finally we will present our main conclusions and recommendations.     

A linear approximation to the power function of a test

In this paper we obtain a linear approximation to the power function of a test that is very accurate for small sample sizes. This is especially useful for robust tests where not many power functions are available. The approximation is based on the von Mises expansion of the tail probability functional and on the Tail Area Influence Function (TAIF). The goals of the paper are, first to extend the definition of the TAIF to the case of non identically distributed random variables, defining the Partial Tail Area Influence Functions and the Vectorial Tail Area Influence Function; second, to obtain exact expressions for computing these new influence functions; and, finally, to find accurate approximations to the power function, that can be used in the case of non identically distributed random variables. We include some examples of the application of this linear approximation to tests that involve the Huber statistic and also saddlepoint tests, so proving that the approximations apply not only to simple problems but also to complex ones.     

Managing employee expectations during acquisitions

There is a wide body of evidence that suggests that the management of 'human factors' in post‐acquisition implementation is important and, where it is badly managed, helps to explain why up to half of acquisitions are not deemed to be successful. A central feature in this process is the management of employee expectations. Using research insights drawn from the management and formation of expectations in recruitment and from breaches of the psychological contract, this article reports on research in organisations subject to a takeover within two years of the field work. Detailed findings on two of these cases are used to explore the dimensions of dual expectations in such circumstances. It is suggested that employees in acquired companies have concerns that become expectations concerning both themselves ('me') and their work group ('us'), ranging from immediate job and employment worries on transfer to longer‐term status and behavioural and cultural concerns in the 'new' organisation. These expectations will vary over time and have different facets according to the seniority of the employee, the degree of integration sought by the acquirer and the extent to which expectations formed are proven to be realistic and realisable. The two cases analysed reveal different aspects of unmet expectations in acquisitions. Seven factors were identified as influential in shaping employees' expectations in acquisitions: quality of communication, believability of information, trust in management action, credibility of leadership, fairness of action, consistency of action and communication and logic of management action or behaviour.     

Housing demand in Mexico

This paper analyzes the components of housing demand in Mexico in the context of developing and developed nations. The case of Mexico is particularly interesting given that population and income dynamics, as well as current housing shortages, suggest that the demand for housing will significantly increase in the near future. We use micro-level data from market-based mortgages that originated during the period of 2002 to 2004 for 21 metropolitan areas in Mexico. We find the price elasticity of housing demand to be ?0.3, lower than previous studies for developed countries and within the range for developing countries. Permanent income is a major component of housing demand, with an elasticity of 0.8. In contrast, temporary income has a very low elasticity of 0.04. The mortgage rate elasticity for 25-year mortgages is ?0.39. We believe these results provide important information to policy makers and practitioners in Mexico and other developing nations.     

Rational Underdevelopment*

We propose a two‐region two‐sector model of uneven development, where technological change benefits either the lagging or the leading region. In this framework interregional transfers may lead to persistent underdevelopment; by raising wages, transfers reduce the chance of the backward region adopting a new technology and taking off. Due to uncertainty about which region benefits from technological change, the backward region may rationally choose to remain underdeveloped, while the advanced region continues to pay transfers. The model provides a rationale for cases, such as Italy's Mezzogiorno, where the same rich region subsidizes the same poor region on a continuous basis.     

Risk perception by industrial radiographers: Hungary and the UK compared

Perceptions of risks from two groups of industrial radiographers, one from Hungary, (n = 45) and from the United Kingdom, (n = 29) were compared by the psychometric method. The comparison was made because both groups were at risk for high doses of ionizing radiation. We found the groups had similar demographic profiles but poor socio-economic conditions of Hungarians were associated with higher levels of emotional distress. Correlation HU-UK for personal and general risks were at a significant level for topics that included lifestyle and radiation risks. Perceptions of risks from radiation were small except for large personal risk from East European nuclear power plants. Knowledge of radiation risk intranationally was correlated positively with personal risk for UK radiographers and negatively for Hungarians. However, average overall risk perceptions from the same topic list for all radiographers did not differ significantly from a group (n = 1461) of UK citizens, though radiographer's risks from radiation were considerably greater. As a new lifesaving intervention it was proposed that radiation risk reduction could be achieved by genetic testing.