Misperceiving the value of information in predicting the performance of others

Economic models typically allow for “free disposal” or “reversibility” of information, which implies non-negative value. Building on previous research on the “curse of knowledge” we explore situations where this might not be so. In three experiments, we document situations in which participants place positive value on information in attempting to predict the performance of uninformed others, even when acquiring that information diminishes their earnings. In the first experiment, a majority of participants choose to hire informed—rather than uninformed—agents, leading to lower earnings. In the second experiment, a significant number of participants pay for information—the solution to a puzzle—that hurts their ability to predict how many others will solve the puzzle. In the third experiment, we find that the effect is reduced with experience and feedback on the actual performance to be predicted. We discuss implications of our results for the role of information and informed decision making in economic situations. Electronic Supplementary Material Supplementary material is available in the online version of this article at http://dx.doi.org/10.1007/s10683-006-9128-y. JEL Classification C91, D83     

Scientific status and knowledge use: Two perspectives

Summary In summary, it is important, from time to time, to step back and consider the publication process, as it exists in marketing and as it operates forJAMS. As part of this consideration, the issue of journal quality is paramount. As mentioned above, there are many ways to assess journal quality, and each method has its advantages and its limitations. In the field of marketing, we have a long history of relying on perceptual data, and this tradition is reflected in methods that rely on expert ratings and rankings of journals. In our field, we also have a history of trying to collect “objective” or quantitative data, and methods that rely on citation counts fit into this tradition. Here, using contrasting but related methods, we report encouraging evidence about the growing status and reputation ofJAMS as an influential publication outlet for marketing scholarship.     

U-commerce: Expanding the universe of marketing

This article introduces several new concepts that lay the conceptual foundation for thinking about next-generation marketing based on ubiquitous networks. U-commerce, orüber-commerce, is predicated on the characteristics of network ubiquity, universality, uniqueness, and unison. It is proposed that the keys to managing network-driven firms are the concepts of u-space and attention analysis. The implications for next-generation marketing in the u-space are explored, with a research agenda identified for scholars and managerial implications recognized for practitioners. Richard T. Watson is the J. Rex Distinguished Chair for Internet Strategy and the director of the Center for Information Systems Leadership in the Terry College of Business, University of Georgia. He has published in leading journals in several fields as well as authored books on data management and electronic commerce and given invited seminars in nearly 20 countries. He is vice president of communications of AIS and recently finished a term as a senior editor ofMIS Quarterly. He is a visiting professor at Agder University College, Norway, and a consulting editor to John Wiley & Sons. Leyland F. Pitt is a professor of marketing in the School of Marketing, Curtin University of Technology, Perth, Australia. He is also adjunct professor of marketing at Kingston Business School, United Kingdom; the University of Lulea, Sweden; and the Ecole Nationale Ponts et Chaussees in Paris. He has also taught marketing and electronic commerce on M. B. A. and executive programs at schools such as Warwick Business School, London Business School, the Graduate School of Business at Columbia University, and the Graham School of Continuing Studies at the University of Chicago. Dr. Pitt is the author of more than 100 papers in scholarly journals, and his work has appeared in publications such asCalifornia Management Review, Sloan Management Review, Journal of the Academy of Marketing Science, Information Systems Research, Journal of Advertising Research, Communications of the ACM, andMIS Quarterly (for which he also served as associate editor). Pierre Berthon is an associate professor of marketing at Bentley College. He has held academic positions at Columbia University, Henley Management College, Cardiff University, and University of Bath. His teaching and research focus on electronic commerce, market information processing, organization and strategy, and management decision making. George M. Zinkhan is the Coca-Cola Company Chair of Marketing at the University of Georgia. After receiving his doctorate at the University of Michigan, he served on the faculty at both the University of Houston and the University of Pittsburgh. His main research focus is on the areas of communication, advertising, and electronic commerce. His recent coauthored books includeElectronic Commerce: A Strategic Perspective (2000) andConsumers (2002).     

Does mandatory disclosure affect subprime lending to minority neighborhoods?

We examine changes in lending behavior in response to the Federal Reserve??s requirement for disclosure of loan pricing information implemented in 2004 for two broad types of lenders, depository and nondepository institutions. We find that although subprime approval rates generally increased after 2004 as the housing market boomed, there was nonetheless a reduction in subprime approval rates to minority neighborhoods following implementation of the pricing disclosure requirement. We also find that the effect of the pricing disclosure requirement on subprime approval rates was stronger for depository institutions than for nondepository institutions. Moreover, depository institutions with good reviews from regulators for effectively serving the financing needs of local communities are less likely to issue higher-priced subprime loans.     

Topics in nonparametric comparative statics and stability

This paper presents the analysis of the Jacobian matrix of a small, macroeconomic model to determine the robustness of the model's comparative statics. The values of the model's coefficients are assessed with respect to seven alternative estimation strategies such as ordinary least squares or two-stage least squares. For each alternative version, the invertibility and stability of the Jacobian matrix is studied. The model is robust to the degree that these characteristics are shared by any matrix with the same sign pattern or other similar nonparametric conditions on its entries. One way to address the relative success of the different estimation strategies is through the robustness of the comparative statics of the resulting model.     

Capacity,sustainability, and the community benefits of municipal utility ownership in the United States

ABSTRACT

Most literature on utility sustainability focuses on internal operations; this misses the role that utilities could play within a community. This study measures the impact of municipal ownership of water and electric utilities on the sustainability policymaking of local governments. I find that municipalities with government-owned water utilities adopt more sustainability measures than those with investor-owned service. Similarly, municipally-owned electric utilities have higher levels of energy sustainability in the community, but not in government operations. The utilities provide fiscal and technical capacity to municipalities. Interdepartmental coordination also strongly predicts sustainability policymaking. This study brings potential community benefits to the discussion of private investment in public service delivery.     

Stress and consumer behavior

Although stress research has received increased attention in the behavioral and social sciences, it has been virtually ignored by marketing researchers. This paper attempts to advance the stress perspective as a useful framework in consumer research. First, the author presents theoretical and conceptual foundations of stress research. Second, the author develops a general conceptual model of the causes and consequences of stress on the basis of theory and research. The model serves as a blueprint for presenting theory and research on stress, organizing and interpreting findings of consumer studies in the context of stress theory, and developing propositions for needed research. Finally, the author provides a research agenda to guide future studies in this area.     

Minimum investment requirement,financial market imperfection and self-fulfilling belief

We develop a model in which a strategic complementarity in saving decisions arises due to a minimum investment requirement and financial market imperfection. We explore the role of self-fulling beliefs in determining the long run dynamics. The model exhibits a wide range of dynamic phenomena such as a poverty trap, a big push and a sunspot equilibrium, depending on the level of financial market imperfection. They account for excessive volatility and a sudden change in the saving rate and its macroeconomic consequences without any shocks to fundamentals.     

The future of the mobile phone business

One of the fastest growing technologies of our times is that of mobile phones. In this article we use the assumption that the diffusion of mobile technology, as measured by the number of active mobile accounts, follows the well known S-curve of natural growth in competition systems. The accuracy of the logistic fit is tested against actual data for the whole world, Europe, China and the GSM system. Using the produced models predictions concerning the future of mobile business are deliberated.According to these models active mobile accounts around the globe are expected to grow from 1.7 billion in 2004 to approximately 2 billion in 2008, reaching a peak penetration of 29.2%. Growth barriers, apart from the age of the potential user, are also low income and extreme poverty. Europe, early adopter of mobile technology and leader in active mobile accounts against all other regions in the world, has apparently reached a peak with almost every European, apart from the very young or very old, using a mobile phone. The mobile market in China is anticipated to exceed 500 million active accounts and may increase even further depending on the economic and social reform that is currently under way in that part of the world. GSM will most likely remain the leading mobile technology in the future as it is today.The growth process for the world, Europe, and the GSM system is almost completed and during this stage instabilities may occur before the potential emergence of a new wave of growth.