Cognitive,Emotional, and Sociocultural Processes in Consumption

This article examines deliberative, emotional, and sociocultural processes in consumption. The authors draw upon basic processes from two leading theories in social psychology, the theory of planned behavior (TPB) and the model of goal‐directed behavior (MGB), to develop a comprehensive approach to decision making more appropriate for many consumption decisions, and revise the representation and modeling of key variables to better reflect how social psychological processes relate to consumer behavior. A survey was conducted among real adult consumers of bacalhau in Portugal. Because it is most common for women to prepare bacalhau meals in Portugal, 153 female participants were recruited for this survey. The results show that the TPB, and especially the MGB, are found to explain food consumption decisions well but only after the approaches are modified in form and content to accommodate the complex emotional and social aspects of the consumption context. The results also show that the effects of key determinants of desire in the MGB are contingent on the traits of food involvement and cultural orientation (i.e., degree of vertical individualism). The approach taken herein overcomes limitations of existing theories by synthesizing relevant processes across two leading theories and by introducing new variables and processes, thereby showing that the organization of these processes and their contingency on cultural variables regulate consumption.     

The Path to Service Encounter Performance in Public and Private ‘Bureaucracies’

This article examines the evolution of building societies against a background of environmental change. By the application of specific analytical measures developed by Ansoff five distinct periods of change can be isolated. Key events in the environment have become progressively more novel, less predictable and costlier to deal with, which, in turn, has necessitated both operational and strategic redirection.     

Knowledge of Inter-customer Relations as a Source of Value Creation and Commitment in Financial Service Firm's Intermediation

This paper develops a knowledge perspective on value creation in organisations that employ mediating technology to facilitate inter-customer relations. Mediators, individually and collectively, build networks of customers between whom linking can take place, and they provide services that facilitate inter-customer exchanges. Earlier research has shown the importance of size and standardisation in mediation. A different stream of research has shown that contextual knowledge is important for problem solving and innovation in organisations. Combining theories of mediating technology and situated problem solving, the paper posits that inter-customer relations constitute the fundamental context for value creation of firms using the mediating technology. LISREL is used to test relationship-level, cross-sectional hypotheses that link knowledge of inter-customer relationships, added value, and customer commitment to bank services for small firms. This work extends Thompson's work on mediating technology with implications for organisation action by demonstrating that mediators' knowledge of inter-customer relationships is an important resource in intermediation. Three contributions are made to strategic management and organisation theory. First, the paper provides a deeper understanding of the relationship between knowledge and committed customers. Second, fundamental resources are developed for firms using mediating technology. Finally, the use of the situated knowledge concept is extended to inter-customer relations, thus explaining performance beyond the contexts to which the concept has previously been applied. The findings have implications for segmentation practices, organisation domain decisions and the corresponding organisational structures, and practices that can provide effective service to inter-customer relations rather than to atomistic independent customers.     

A passage to India: A dual case study of activities,processes and resources in offshore outsourcing of advanced services

Research has shown that offshore outsourcing processes may influence the behavior and strategic choices of firms, but little is known about the determining factors that influence the evolution and outcomes of those processes. Furthermore, longitudinal studies able to generate such insights are lacking. This paper suggests a detailed, activity-based approach to the study of the process of offshore outsourcing of high-value, advanced service activities. While earlier research has considered either firm-internal or firm-external sources of resource building, this study offers a more comprehensive theoretical model that combines resource-based theory and international business network theory. It aims to investigate how determinants of the offshore outsourcing process contribute to the resource stocks of client firms. Based on two longitudinal case studies of offshore outsourcing to India, the study finds that offshore outsourcing operations, in general, make positive contributions to the resource stocks of client firms. Some determinants contribute to the building of resources (partnership commitment decisions, knowledge creation and learning, trust building, the interconnectedness of resources) while others impede resource building (time compression diseconomies, lack of resource mass efficiencies). Notably, the interconnectedness among onshore activities, offshore activities and the underpinning knowledge resources reduces the risk of erosion of client firm resources, although this remains a long-term risk.     

The importance of consumer multihoming (joint purchases) for market performance: Mergers and entry in media markets

Consumer “multihoming” (watching two TV channels, or buying two news magazines) has surprisingly important effects on market equilibrium and performance in (two‐sided) media markets. We show this by introducing consumer multihoming and advertising finance into the classic circle model of product differentiation. When consumers multihome (attend more than one platform), media platforms can charge only incremental value prices to advertisers. Entry or merger leaves consumer prices unchanged under consumer multihoming, but leaves advertiser prices unchanged under single‐homing: Multihoming flips the side of the market on which platforms compete. In contrast to standard circle results, equilibrium product variety can be insufficient under multihoming.     

Market efficiency in Scandinavian racetrack betting

This study analyzes Scandinavian racetrack betting markets. We discuss market efficiency and investor behavior in light of the fact that investors earn negative returns on average. Show bets on favorites in Norway yield a small positive return, while all the other betting markets are weak form efficient. We establish the favorite-longshot bias for quinella and exactor bettors, but not for win bettors. Our results can be explained by small pools and high track takes. Investors wagering at the racetrack have a different risk attitude than investors wagering off the track. We explain how our results should influence the design of betting products, especially with respect to the fraction of the pool returned to winners.     

Continuous‐time models,realized volatilities,and testable distributional implications for daily stock returns

We provide an empirical framework for assessing the distributional properties of daily speculative returns within the context of the continuous‐time jump diffusion models traditionally used in asset pricing finance. Our approach builds directly on recently developed realized variation measures and non‐parametric jump detection statistics constructed from high‐frequency intra‐day data. A sequence of simple‐to‐implement moment‐based tests involving various transformations of the daily returns speak directly to the importance of different distributional features, and may serve as useful diagnostic tools in the specification of empirically more realistic continuous‐time asset pricing models. On applying the tests to the 30 individual stocks in the Dow Jones Industrial Average index, we find that it is important to allow for both time‐varying diffusive volatility, jumps, and leverage effects to satisfactorily describe the daily stock price dynamics. Copyright © 2009 John Wiley & Sons, Ltd.     

Consumption Fluctuations and Expected Returns

This paper introduces a novel consumption-based variable, cyclical consumption, and examines its predictive properties for stock returns. Future expected stock returns are high (low) when aggregate consumption falls (rises) relative to its trend and marginal utility from current consumption is high (low). We show that the empirical evidence ties consumption decisions of agents to time variation in returns in a manner consistent with asset pricing models based on external habit formation. The predictive power of cyclical consumption is not confined to bad times and subsumes the predictability of many popular forecasting variables.     

Taxes,Tuition Fees,and Education for Pleasure

The fact that education provides both a productive and a consumptive (nonproductive) return has important and, in some cases, dramatic implications for optimal taxes and tuition fees. Using a simple model, we show that when the consumption share in education is endogenous and tuition fees are unconstrained, the optimal tax/fee system involves regressive income taxes and high tuition fees. A progressive labor income tax system may, on the other hand, be a second‐best response to politically constrained, low tuition fees. Finally, the existence of individuals with different abilities will also move the optimal income tax system toward progressivity.