Is Selection Bias Inherent in Housing Transactions? An Equilibrium Approach

We develop an equilibrium model for residential housing transactions in an economy with houses that differ in their quality and households that differ in their planned holding horizon. We show that, in equilibrium, a clientele effect persists, with long‐horizon buyers overwhelmingly choosing higher quality properties and short‐horizon buyers settling for lower quality properties. This clientele effect creates a sample selection bias: the properties that are on the market are predominantly of lower quality. Since these are the preferred choice of short‐horizon buyers, they demonstrate a faster turnover. Both the clientele effect and the selection bias are more pronounced with an increase in the variance of house quality and in the variance of the planned holding horizon. Our theoretical model supports empirical evidence on the existence of such bias in home price indices and explains it by the differences in ex ante holding horizons.     

Are Virtual Markets Efficient Predictors of New Product Success? The Case of the Hollywood Stock Exchange*

Defining effective methods for determining consumer preferences for products prior to their launch has been a mainstay of marketing and management literature for decades. Virtual Stock Markets (VSMs) is an emerging method in new product forecasting that has been shown to produce reliable new product sales estimates by combining individual preferences via market‐based aggregation mechanisms. Due to the emerging popularity of VSMs among practitioners, this cross‐disciplinary study (combining insights from finance, marketing, and new product development fields) uses the example of the Hollywood Stock Exchange (HSX) and examines its predictive validity and potential systematic biases in its predictions to help think about the general applicability of these forecasting methods to other product areas, or how forecasts in other product areas may need to be modified to be more precise. This study finds evidence of overestimating the sales potential associated with products on the low end of the revenue expectation spectrum, which could be linked to the fact that in artificial exchanges, where no money changes hands, people tend to gamble hoping to make excessive returns. However, this explanation is weakened by the introduction of additional variables linked to the negative influence of information search costs (harder to utilize information is not fully reflected in the stock prices) and over‐utilization of highly visible/conspicuous information. Practical implications for managers considering using VSMs for new product forecasting in creative gestalt‐like settings are discussed.     

To Launch or Not to Launch: An Empirical Estimate of New Food Product Success Rate

New product introduction is one of the most important activities for a company’s growth. It is generally accepted that new product introductions are essential to the health of food companies. Yet, many believe that most new products fail, therefore discouraging companies to introduce some new products. However, most of the estimates suggesting high failure rates are either anecdotal or qualitative. This article provides a quantitative approach to measuring new product success rates for food products and to show the relationship between the success of new product and entry strategies. This article uses a quantitative approach to measuring product success/failure exclusively for food products. The authors contend that failure rates for food products are not nearly as low, and success rates much higher than it was previously established in the literature and perceived by the industry professionals. There was a significant variability of success rates between various food groups ranging from 58% for both fruit and vegetables and desserts and ice-cream categories to 88% for baby food. Success rates also varied among the different introductory strategies of the new food products, ranging from 50% for new packaging to 75% for re-launch strategies.

Academics and practitioners usually quote very low success rates for new products based on subjective and/or strictly qualitative information. This empirical quantitative research shows that success rates for food products are much higher than previously reported. This should encourage greater use of new products to grow sales and profits. The previously reported low success rate may have led to the reluctance to introduce new products and therefore set many of the legacy food companies in their current poor financial condition.     

Conceptualizing smart shopping with a smartphone: implications of the use of mobile devices for shopping productivity and value

This conceptual paper addresses the implications of the use of mobile devices in an omni-channel retail environment for consumer shopping productivity and shopping value. We reconsider the existing literature on shopping productivity and adopt the perspective of bounded rationality paradigm rather than the classical assumption of customers’ perfect rationality. It enables us to consider both maximizers (those who seek the best outcome) and satisficers (those who stop their information search as soon as an appropriate option is available). After a thorough review of shopping productivity literature, we propose a conceptualization of shopping productivity including four dimensions: time/effort savings, right purchase, money savings, and hedonic benefits from shopping. We then present a conceptual framework relating use of mobile devices in an omni-channel retail environment to consumer shopping productivity and shopping value. The type of goods and consumer tendency to maximize are included in the framework as possible antecedents of the use of mobile devices in an omni-channel retail environment and moderators of the relation between consumer shopping productivity and shopping value.     

Trade Liberalisation: The Effects of Free Trade Agreements on the Competitiveness of the Dairy Sector

In recent years, preferential trade agreements (PTAs), free trade agreements (FTAs) in particular, have proliferated while WTO negotiations have stagnated. This paper contributes to the literature on trade liberalisation and the agricultural sector by analysing the effects of FTAs on the competitiveness of the dairy sector across 76 countries and over a 20‐year period from 1990 to 2009. With a longitudinal econometric model, the results demonstrate that when a country has a revealed comparative advantage in the dairy sector, FTAs positively influence several indicators of competitiveness in the dairy sector, such as production, market share and trade balance. The results also indicate that multilateral FTAs are more beneficial than bilateral FTAs. There is strong empirical evidence that FTAs are more beneficial to developed countries than to developing countries. There is no statistical evidence to support the hypothesis about a relationship between FTAs and farm‐gate price.     

Synergies Among Advertising Channels: An Efficiency Analysis

The following article measures and compares efficiency of five advertising channels (TV, press, radio, online, and outdoor) with the help of DEA (Data Envelopment Analysis) methodology and looks for synergy effects among them. The synergy effect was indeed found in certain combinations of media while internet was found to be second least effective advertising channel, contrary to the expected.     

The Role of Language in the Communication Process Between Business and Government: Evidence from Russian Firms

Abstract

The paper investigates how language facilitates communication process between government and business. We use Russian context to show barriers and challenges of using language in official communication between governmental authorities and Russian companies. In our work, we demonstrate how language may produce employee’s misunderstanding and discuss typical sources of ineffective usage of language. The results indicate that problematic issues of both linguistic and non-linguistic nature can lead to serious implications for successful communication between government and business in Russia. We found that documentations’ complexity, which is perceived as such due to a complicated subject area they belong to (legal, tax, etc.) and language insufficiency applied are most likely to raise multiple problems related to government’s communication with business.