Making a first impression as a start-up: Strategies to overcome low initial trust perceptions in digital innovation adoption

High failure rates of digital innovations by start-ups indicate that consumers' initial trust perceptions are make-or-break for their survival. Hence, start-ups have to design adequate business models to manage consumers' initial trust perceptions of digital innovations. Five experiments explore how start-ups can signal trustworthiness in order to overcome low initial trust perceptions and boost adoption. We find three specific design strategies of start-ups' digital business models – customer ratings, benefit communication, and revenue model – to be effective to overcome low initial trust perceptions and to increase adoption of digital innovations. The findings demonstrate that initial trust serves as a critical mediator in the relationship between these design strategies and consumers' adoption intentions. Additionally, the chosen revenue model has differential effects on privacy concerns, which mediate the relationship between revenue model and initial trust. The present empirical insights help start-ups to craft business model design strategies for successful digital innovation launch.     

Industrial coal demand in China: A provincial analysis

The general concern on the environmental implications of the rising demand for coal registered in China during the last few years has induced considerable research effort to produce accurate forecasts of China's energy requirements. Nevertheless, no previous study has modelled the coal demand in China at provincial level. The aim of this paper is twofold. First, we estimate and forecast the Chinese demand for coal using panel data disaggregated by provinces and accounting for spatial heterogeneity. Second, given the spatial nature of the data, we explicitly capture the spatial autocorrelation among provinces using spatial econometrics. In particular, we specify the Chinese industrial coal demand at provincial level with fixed-effect spatial models. The empirical results show that the fixed-effect spatial ADL model is able to capture the existing interdependence between provinces. This model forecasts an average annual increase in coal demand to 2010 of nearly 2%.     

An empirical study of consumer behavior related to private labels and national brand promotions

One day while in the store, Bernard grabs his usual Dominick's cream cheese off the shelf. I notice and point out that the national brand of Philadelphia cream cheese is on sale and less expensive. Bernard looks at the two products and actually hesitates for a while to switch to the national brand. His hesitation makes it clear that his preference is not based solely on price. (Chang Coupland 2005, 115).     

Pricing and hedging illiquid energy derivatives: An application to the JCC index

In this paper a simple strategy for pricing and hedging a swap on the Japanese crude oil cocktail (JCC) index is discussed. The empirical performance of different econometric models is compared in terms of their computed optimal hedge ratios, using monthly data on the JCC over the period January 2000–January 2006. An explanation to how to compute a bid/ask spread and to construct the hedging position for the JCC swap contract with variable oil volume is provided. The swap pricing scheme with backtesting and rolling regression techniques is evaluated. The empirical findings show that the price‐level regression model permits one to compute more precise optimal hedge ratios relative to its competing alternatives. © 2008 Wiley Periodicals, Inc. Jrl Fut Mark 28:464–487, 2008     

Effect of credit rating changes on Australian stock returns

We study the impact credit rating revisions have on stock returns of Australian firms rated by Standard & Poor's and Moody's. Our evidence is consistent with that documented in the USA showing that only downgrades contain price‐relevant information. The reaction is most significant when the downgrade: (i) is unanticipated; (ii) is for an unregulated firm; and (iii) reduces the firm's rating by more than one category.     

An analysis of differentiation strategies for Galician thermal centres

In the modern tourism industry, competitiveness no longer can be based solely on price; rather, it is necessary to consider other aspects that might generate competitive advantages. In particular, the provision of a wide range of products, services and activities, all of outstanding quality, may be decisive for creating greater demand. Thermal establishments are well aware of these dynamics. Accordingly, this research analyses, using quantitative techniques, whether Galician thermal establishments, including health resorts, spas and thalassotherapy centres, have achieved well-defined differentiation strategies.     

The interrelationships between brand and channel choice

We propose a framework for the joint study of the consumer’s decision of where to buy and what to buy. The framework is rooted in utility theory where the utility is for a particular channel/brand combination. The framework contains firm actions, the consumer search process, the choice process, and consumer learning. We develop research questions within each of these areas. We then discuss methodological issues pertaining to the use of experimentation and econometrics. Our framework suggests that brand and channel choices are closely intertwined, and therefore studying them jointly will reveal a deeper understanding of consumer decision making in the modern marketing environment.     

Tough on criminal wealth? Exploring the link between organized crime’s asset confiscation and regional entrepreneurship

This paper addresses the question “How does the fight against organized crime affect regional entrepreneurship?” We focus on asset confiscation in relation to alleged connections of their owners with organized crime, a highly debated policy measure against organized crime. Extending work on institutions and regional entrepreneurship, we propose that confiscation has contrasting effects on regional entries. On the one hand, confiscation of economic assets associated with criminal organizations’ legitimate activities in a region reduces competition and triggers renewal, fostering new entries. On the other hand, seizure of criminal organizations’ operational assets weakens their ability to exercise sovereignty, creating an institutional vacuum that lowers founding rates. Our results, based on a longitudinal study of Italian provinces between 2009 and 2013, provide support for both hypotheses. We also find that the negative effect associated with the confiscation of operational assets is mitigated when local governments have policies facilitating asset redeployment.     

KNOW YOUR CLIENT! INVESTOR PROFILE AND TAILOR‐MADE ASSET ALLOCATION RECOMMENDATIONS

We study how the investor profile influences the asset allocation recommendations of professional advisors. We find the investor's perceived risk attitude influences more the mix of risky assets, whereas the socioeconomic variables influence more the cash percentage. The recommendations are consistent with a diversification behavior driven by actual asset correlations. These findings support the utility of investor advisory that may help enhance the risk and return trade‐off. The main drawback of the recommendations may consist in the degree of customization that is limited by the small number of investor characteristics actually influencing the asset allocation.     

A decomposition formula for option prices in the Heston model and applications to option pricing approximation

By means of classical It? calculus, we decompose option prices as the sum of the classical Black?CScholes formula, with volatility parameter equal to the root-mean-square future average volatility, plus a term due to correlation and a term due to the volatility of the volatility. This decomposition allows us to develop first- and second-order approximation formulas for option prices and implied volatilities in the Heston volatility framework, as well as to study their accuracy for short maturities. Numerical examples are given.