Introversion-extraversion and loud commercials

The introversion-extraversion dimension of Hans Eysenck's personality theory, combined with the theory proposed by Daniel E. Berlyne that hedonic value changes with changes in arousal level, are used to examine the effect that high intensity advertising appeals have on the audience. It was hypothesized that advertising appeals presented at a higher stimulus intensity than the program in which they are imbedded (e.g., commercials presented at a higher volume) would have a differential effect on individuals due, in part, to whether they were introverts or extraverts. In a preliminary test of this hypothesis, participants were exposed to either a radio commercial played at the same volume as the program or to one that was played at a higher volume. Their attitudes toward the commercial and the product were assessed. The results indicate that there is a difference between introverts and extraverts in the resulting attitude toward the product based on the type of appeal to which they were exposed.     

Prolonged gestation: Energy efficiency and renewable energy businesses

Life cycle theories suggest that businesses evolve through a number of stages: from an embryonic stage of introduction to growth, maturity, and decline. The force that propels their development is consumer acceptance. Industries pass through life cycles as well. However, not all industries pass through each stage of the life cycle, and the duration of stages varies across industries. Some industries skip the slow introductory phase; others avoid the decline stage and are continually revitalised through technological innovation. Still others continue to show substantial promise, but fail to take-off. It is this industry condition, persistent promise without corresponding growth, that we characterise as extended gestation. We believe that energy efficiency and renewable energy (EERE) businesses in Minnesota face the challenge of extended gestation. In this paper, we review the literature on the traditional stages of industry development, explore some of the factors that may lead an industry to remain in a state of extended gestation, and report the results of a study undertaken to better understand the factors that affect the growth of EERE businesses.     

Using seminonparametric methods to model hospital cost functions: The multi-product asymptotically ideal model

The article develops a multi-product extension of the asymptotically ideal model which has several advantages over traditional cost functions. The AIM cost function has greater flexibility and allows for economic theory to be imposed via parametric restrictions alone. In addition, the AIM cost function is superior to other seminonparametric approaches as it is unlikely to suffer from overfitting problems. The multi-product AIM cost function is estimated using hospital data from 137 VA hospitals.     

Introduction to Special Issue on the Economics of Information in Real Estate Markets

The articles featured in this issue are introduced, their relationships noted, and their key points highlighted.     

Avatars as salespeople: Communication style, trust, and intentions

Interactions with retail salespersons in stores contribute to building trust and profits. Within the largely impersonal Internet, an interactive animated character or avatar, playing the social role of an online sales assistant, should provide a potent source of social presence and so have the potential to replace some of these interactions. This investigation tests whether avatars with social- or task-oriented communication styles contribute to user trust and patronage intentions. Further tests explore the moderating effects of product/service type. The study includes an online experiment and survey, involving 636 participants, mainly from North America, Oceania and Europe, allocated randomly to different treatments.Task-oriented communications contribute to trust, which in turn contributes to patronage intentions, especially for search goods/services. Social-oriented communications also contribute directly to trust and to patronage intentions, most strongly for credence goods/services. The authors recommend a three-fold approach to avatar implementation, involving requirements captured to define appropriate appearance, role, interaction style and content for the task. Conclusions include further suggestions for development and research.     

The high cost of accurate knowledge

Many business thinkers believe it's the role of senior managers to scan the external environment to monitor contingencies and constraints, and to use that precise knowledge to modify the company's strategy and design. As these thinkers see it, managers need accurate and abundant information to carry out that role. According to that logic, it makes sense to invest heavily in systems for collecting and organizing competitive information. Another school of pundits contends that, since today's complex information often isn't precise anyway, it's not worth going overboard with such investments. In other words, it's not the accuracy and abundance of information that should matter most to top executives--rather, it's how that information is interpreted. After all, the role of senior managers isn't just to make decisions; it's to set direction and motivate others in the face of ambiguities and conflicting demands. Top executives must interpret information and communicate those interpretations--they must manage meaning more than they must manage information. So which of these competing views is the right one? Research conducted by academics Sutcliffe and Weber found that how accurate senior executives are about their competitive environments is indeed less important for strategy and corresponding organizational changes than the way in which they interpret information about their environments. Investments in shaping those interpretations, therefore, may create a more durable competitive advantage than investments in obtaining and organizing more information. And what kinds of interpretations are most closely linked with high performance? Their research suggests that high performers respond positively to opportunities, yet they aren't overconfident in their abilities to take advantage of those opportunities.