The Effect of Online Shopping Platform Strategies on Search,Display, and Membership Revenues

Most online shopping platform firms generate revenue from three sources: pay-per-click search advertising, pay-per-impression display advertising, and membership fees. The strategies that influence these revenue sources typically are studied individually, rather than in a holistic fashion. In response, this study uses time-series data with 18 million buyers and sellers from 2010 to 2011 and undertakes a quasi-experiment to analyze how the distinct effects of buyer- and seller-side strategies on revenues (1) vary across all three revenue sources and (2) depend differentially on a platform’s upmarket repositioning strategy. The results show that buyers that purchase through direct traffic (e.g., typing in the site address) yield more display advertising and membership fee revenues than those gained through organic traffic (e.g., landing from a search engine). Engagement strategies that appeal to established sellers (i.e., value-added services) yield more search advertising and membership revenue than those that appeal to new sellers (i.e., social forums). An upmarket repositioning strategy (i.e., eliminating low quality sellers) enhances the revenue effects of buyer traffic generation and seller engagement strategies. Post hoc analyses suggest that a 1% increase in direct traffic generates an additional $151,506 in display advertising revenue after (vs. before) the repositioning.     

Capturing flexible correlations in multiple-discrete choice outcomes using copulas

This paper aims to examine three purchase patterns which frequently occur in multiple-discrete choice situations: joint-purchase, quantity-preference, and quantity-concordance. First, “joint-purchase” refers to the tendency that two products are either purchased together or separately. Second, “quantity-preference” refers to the tendency to purchase a product in preferred amounts. Third, “quantity-concordance” refers to the tendency that purchase quantities of two products are either concordant or discordant. These patterns are mainly attributed to unobserved factors such as economic reasons, habits, time pressure, mood, and/or physical environment. No study has fully incorporated the three purchase patterns simultaneously.In this study, we develop a unified copula-based approach which can incorporate all the three purchase patterns simultaneously. The proposed approach is so flexible that any copula function or parametric distribution can be used. We use a simulation study to illustrate the trade-off between the Gaussian copula and the FGM copula. We show the Gaussian copula which captures the full range of correlations quickly becomes infeasible as the number of choice alternatives increases. On the contrary, the FGM copula substantially reduces the computational complexity and is scalable to larger dimensions. Furthermore, we extend the range of correlations of the FGM copula at almost no cost by introducing the sine generating function. To show the scalability, we apply this approach to IRI scanner panel data with 13 alternatives. Throughout two empirical studies, we show that the three purchase patterns indeed exist in our data. Moreover, we find that ignoring the three purchase patterns distorts key managerial metrics such as demand predictions and price elasticities. This results in suboptimal managerial decisions regarding peelies promotions, bundling, and package size. Furthermore, we illustrate that managers can improve the profitability of promotions by implementing a joint promotion strategy based on the three purchase patterns.     

The impact of retail buyer innovativeness on suppliers’ adaptive selling in Japanese buyer–supplier relationships

Abstract

We investigate the critical role of retail buyer innovativeness in Japanese buyer–supplier relationships and explore its link to suppliers’ adaptive selling, cooperative relationships, and retail competitiveness. Further, we examine how process conflict between merchandizing and store divisions moderates the relationship between retail buyer innovativeness and suppliers’ adaptive selling. This study employs a structural equation model using survey data from 246 heads of merchandizing divisions at Japanese retail companies. Our findings highlight the importance of both mitigating process conflict and facilitating suppliers’ adaptive selling in order to improve Japanese retailers’ competitiveness, especially when buyers are highly innovative.     

Eliza in the uncanny valley: anthropomorphizing consumer robots increases their perceived warmth but decreases liking

Marketing Letters - Consumer robots are predicted to be employed in a variety of customer-facing situations. As these robots are designed to look and behave like humans, consumers attribute human...     

Financial Knowledge and “Don't Know” Response

We investigate the effect of group characteristics and educational interventions on young respondents' objective financial knowledge level. We examine six questions about personal finance and covariates selected from the 2015 National Financial Capability Study. Because these questions include “Don't Know” or “Refuse” (DK/RF) responses, a simple regression model could cause researchers to reach misleading conclusions if DK/RF responses are not random. Thus, we suggest a binomial‐latent regression model to evaluate the effect of educational interventions and group differences that are hidden in DK/RF responses. The estimation result shows that rejecting financial education opportunities is disadvantageous to obtaining proper financial knowledge. In addition, both formal and informal financial education are less effective in improving objective financial knowledge in our preferred model. We also find few or no gender, income, and age differences in young adults' objective financial knowledge level after controlling for financial education interventions.     

Relative Importance of Major Job Performance Dimensions in Determining Supervisors' Overall Job Performance Ratings

This study explores the factor structure of job performance and each performance dimension's relative importance in determining supervisors' overall job performance ratings. We found that the optimal factor structure of job performance includes five dimensions: task performance, organizational citizenship behaviour directed toward the organization and individuals (OCB‐O and OCB‐I, respectively), and counterproductive work behaviour directed toward the organization and individuals (CWB‐O and CWB‐I, respectively). The percent‐based relative weight (%RW) is the highest for task performance in determining job performance, followed by OCB and CWB. Interestingly, the %RW of non‐task performance dimensions directed toward the organization (OCB‐O and CWB‐O) is similar to the %RW of task performance but greater than the %RW of non‐task performance dimensions directed toward individuals (OCB‐I and CWB‐I). Copyright © 2018 ASAC. Published by John Wiley & Sons, Ltd.     

The (Dis)Advantage of Friendship on Information Search and Satisfaction

Across four experiments, and focusing on consumer behaviour in a high uncertainty market (i.e., a used car market), this research shows that prior to a purchase, buyers are less motivated to search for information when they purchase a product from a friend (compared to someone they do not know). We also show that buyers are more willing to search for information after a transaction when sellers are their friends, a reversal in search behaviour due to the greater social risk that buyers bear when dealing with a friend. Finally, this research shows that both the transaction outcome (i.e., positive versus negative) and the buyer–seller relationship determine the degree to which people are satisfied or dissatisfied with a seller. Copyright © 2018 ASAC. Published by John Wiley & Sons, Ltd.     

Dispersion in Analysts’ Earnings Forecasts and Market Efficiency

Recent studies show that firms with higher analysts’ earnings forecasts dispersion subsequently have lower returns than firms with lower forecasts dispersion. This paper evaluates alternative explanations for the dispersion–return relation using a stochastic dominance approach. We aim to discriminate between the hypothesis that some asset pricing models can explain the puzzling negative relation between dispersion and stock returns, and the alternative hypothesis that the dispersion effect is mainly driven by investor irrationality and thus is an evidence of a failure of efficient markets. We find that low dispersion stocks dominate high dispersion stocks by second‐ and third‐order stochastic dominance over the period from 1976 to 2012. Our results imply that any investor who is risk‐averse and prefers positive skewness would unambiguously prefer low dispersion stocks to high dispersion stocks. We conclude that the dispersion effect is more likely evidence of market inefficiency, rather than a result of omitted risk factors.     

Impact of Classified Board on M&A Target Shareholder Value: Nurturing Innovation through Entrenchment

We find that classified board in the M&A target firm is positively related to the target shareholder value, but only for firms with both intensive R&D investment and strong external governance. We also find that firms with classified board exhibit superior quality innovation when they have both intensive R&D investment and strong external governance. These findings are consistent with the view that classified board provides long‐term perspectives that promote productive but risky R&D investment, which is highly valued in M&A. Our findings are distinct from the view expressed in extant literature that classified board enhances target shareholder value because of stronger bargaining power.     

The Relationship between Mutual TSI and Interfirm Contracts: The Moderating Effect of Strong Ties

ABSTRACT

Purpose: This study examines the influence that tie strength has on contractual relationships between exchange parties with specific investments and also explores the role of network intensity in contractual relationships between buyers and suppliers. We hypothesize that the relationship between transaction-specific investments (TSIs) and contracts is moderated by network intensity.

Methodology: An empirical test is carried out by analyzing buyer–supplier relationships of manufacturing companies. The construct measures were based on those obtained from prior research, and the reliability and validity were established using exploratory and confirmatory factor analysis. The overall measurement model was then assessed with structural equation modeling using AMOS.

Findings: We focus primarily on contract variables as a governance mechanism that can be affected by the strength of ties among firms and the results of our empirical study indicate that supplier TSIs improve the use of informal contracts while the use of formal contracts undermines the effect on supplier TSIs. In addition, we found that firms with weak ties with their partners in the network are more likely to use both formal and informal contracts than those with strong ties.

Contribution: Our study has several contributions. First, our research improves the understanding of the relationship between TSIs and the choice of contracts as a governance mechanism, especially for mutual TSIs. Second, our research improves our understanding of the network strength in the context of business-to-business relationships extending the understanding of the relationship intensity among firms in a network. Third, we focused on the effects of network intensity on contractual relationships.