What Does CEOs’ Pay-for-Performance Reveal About Shareholders’ Attitude Toward Earnings Overstatements?

If overstatements were a symptom of the agency conflict, pay-for-performance sensitivities should have increased in response to the additional penalties for misreporting imposed by SOX. Our finding of their decrease is inconsistent with the view that overstatements were an unintended consequence of incentive pay prior to 2002. To corroborate our interpretation, we show that (i) CEO pay-for-performance sensitivities are higher among firms whose shareholders stand to benefit from overstatements; (ii) this cross-sectional relationship weakens significantly after SOX; and (iii) the within-firm decrease in pay-for-performance sensitivity is most pronounced among firms with high pre-SOX shareholder benefits from overstatements.     

On the Relation between Local Amenities and House Price Dynamics

This study explores the extent to which local amenities are related to house price volatility, returns and risk‐adjusted returns across 238 MSAs. We find strong evidence that high amenity areas experience greater price volatility. In regards to returns, high amenity areas experience greater (lower) real returns in appreciating (depreciating) markets. However, high amenity areas experience little to no abnormal risk‐adjusted returns. Results from the study are robust to an endogenous treatment of amenities and land supply elasticity. Overall, we conclude that the desirability of a metropolitan area is a significant channel through which land values drive house price dynamics.     

Fostering rural and agricultural tourism: exploring the potential of geocaching

Geocaching is a modern-day version of “hide and seek” where participants use geographical longitude and latitude coordinates to locate a “geocache” using a GPS device or mobile app. An agriculturally focused geocache program could foster tourism, interest and educational opportunities about rural and agricultural areas, and could facilitate additional patronage of businesses that operate in these areas. As a prerequisite to such a program, however, organizations must commit to establishing and maintaining a geocache. This study explores the perceived benefits and constraints to an organization's participation in a rural or agriculturally focused geocache program. A case example of an agriculturally focused geocaching program, AgCache, is used as a starting point. In-depth interviews of program Founders and current participants explored the program's background and goals, and experiences of participating sites. Complimenting this, a survey collected information from potential host sites, and probit model analyses were used to assess influences on an organization's interest in hosting a geocache. While many organizations indicated that they would be interested in such a program, several indicated (addressable) concerns. Characteristics of the organization and respondent were found to significantly influence their interest. Findings are instructive for targeting and recruiting organizations into an agricultural or rural geocaching program.     

Expected Option Returns

This paper examines expected option returns in the context of mainstream asset-pricing theory. Under mild assumptions, expected call returns exceed those of the underlying security and increase with the strike price. Likewise, expected put returns are below the risk-free rate and increase with the strike price. S&P index option returns consistently exhibit these characteristics. Under stronger assumptions, expected option returns vary linearly with option betas. However, zero-beta, at-the-money straddle positions produce average losses of approximately three percent per week. This suggests that some additional factor, such as systematic stochastic volatility, is priced in option returns.     

Consumer Behavior, Public Policy, and Country-of-Origin Labeling

Recent work by agricultural economists has failed to adequately identify why consumers desire country-of-origin labeling, a key piece of information needed to determine whether a market-failure exists. This paper brings to the attention of agricultural economists a sizable body of literature on country-of-origin effects from the marketing and business disciplines. Based on this literature, we draw a distinction between several consumer motivations for origin labels and we identify which of these is cause for public policy. We propose several research questions that require answers if the consequences of country-of-origin labeling policy are to be fully understood.     

Integrated Market-Immersion Approach To Teaching New Product Development In Technologically-Oriented Teams

This article presents a market immersion methodology for teaching NPD in technologically-oriented teams. This methodology was developed during the early 1990s at the Lally School of Management and Technology of Rensselaer Polytechnic Institute. Since then, it has been successfully utilized to train in excess of one hundred MBA-level student teams. The NPD course is taught by a 5-member cross-functional team of faculty with backgrounds in marketing, manufacturing operations, and accounting. The course is modeled on Cooper's stage gate process, and the course is designed to provide a combination of classroom and apprenticeship experiences. The 6-credit, year-long course requires students to work in self-directed teams of approximately 5 to 6 members. Each student team chooses its own industry or technology domain in which to concentrate its efforts, and students undertake intensive market and field research in order to assess any existing market opportunities. Once a specific target market and market need have been identified, students are then required to design a product and an organization to meet that need. In specific, students must produce a detailed marketing, manufacturing, operations, advertising, distribution, and financial plan that can bring their product to market. During the process, students create multiple potential product designs, build mock-ups of their products, and field test the mock-ups. At every phase of the course, the teams are continuously immersed in real customer markets. As a result, teams must struggle to incorporate new market information and learning into their project in a consistent and holistic manner. The following article presents the curriculum content and tools, lessons learned, and student reactions to this original pedagogical approach to teaching NPD. Due to the length of the course, particular attention is paid to the teaming issues that naturally arise when teams work together on long-run projects. © 2002 Elsevier Science Inc. All rights reserved.     

Hospital Marketing and Communications Via Social Media

Social media usage by health care organizations has increased dramatically. Findings from this research show that 95% of the top ranked hospitals use social media. The purpose of this study is to examine whether social media usage varies according to size of hospital and types of services provided. Since social media platforms appeal to different groups of people, this prompts the question of whether certain platforms are more appealing to people who partake in different health services. Findings reveal differences in social media usage depending on the services provided by a hospital.     

The Cost of Duplicative Regulation: Evidence From Risk Retention Groups

A vast majority of insurers are regulated by each state in which they conduct business; however, a small subset of specialized firms, risk retention groups (RRGs), are largely exempt from most aspects of duplicative regulation no matter how many states they operate. This article analyzes the differences between RRGs and standard insurers specializing in commercial liability insurance to determine the cost of duplicative regulation. The costs associated with multi‐state regulation are significantly higher than those for single‐entity regulation. These high regulatory compliance costs reduce the technical efficiency of firms, deter firms from operating in additional states, and increase the price of insurance.