III. Some causes and consequences of dependence and independence in the stock market

The fact that there are times when market movement is random and times when it is not is interpreted in terms of the hypothesis that the price of a stock is an aggregate opinion — the resultant of the opinions and decisions of a community of investors. Price, like any other opinion, will be most vulnerable to social and other sources of influence during times of uncertainty, an aggregate psychological state which can generate the kind of statistical dependence characteristic of non-random walks. Ramifications of this hypothesis are explored in a variety of stock market behaviors, such as the effect of tips, the impact of runs on trading volume during rising and falling markets, and the like.     

On the importance of matching strategic behavior and target market selection to business strategy in high-tech markets

Business strategy is fundamentally concerned with the actions required to create superior customer value in the firm’s target markets with the ultimate goal of achieving superior performance. Marketing theory suggests that two critical marketing activities required to achieve this end are: (1) the adoption of appropriate strategic behaviors (i.e., customer-oriented, competitor-oriented, technology-oriented) and (2) targeting of the appropriate market segments (i.e., innovators, early adopters, early majority, late majority, laggards). This study builds on prior research which demonstrates that the strategic behavior—firm performance relationship is contingent on the firm’s strategy by examining this relationship in high tech markets and by considering the incremental contribution of appropriate target market selection. Responses from 160 senior marketing managers in high-tech firms reveal strong support for our framework. Thus, this study provides useful guidance to executives and managers in high-tech firms regarding the steps that they should take to increase their probability of success.

Optimal tracking for asset allocation with fixed and proportional transaction costs

This paper studies the asset allocation problem of optimally tracking a target mix of asset categories when there are transaction costs. We consider the trading strategy for an investor who is trying to minimize both fixed and proportional transaction costs while simultaneously minimizing the tracking error with respect to a specified, target asset mix. We use imupulse control theory in a continuous-time, dynamic setting to deal with this problem in a general and analytical way, showing that the optimal trading strategy can be characterized in terms of a quasi-variational inequality. We derive an explicit solution for the two-asset case, and we use this to provide a sensitivity analysis, showing how the optimal strategy depends upon individual input parameters. We also use some theory for one-dimensional diffusion processes to derive analytical expressions for various measures of performance such as the average time between transactions.     

An examination of the relative economic efficiency of commercial vs. cooperative telephone companies

In this study, the authors examine the relative economic efficiency of the commercial and cooperative telephone companies in the United States. A national sample of over 900 firms using annual data for the years 1973 through 1980 is analyzed. A Cobb-Douglas profit function is employed in the study. The results indicate that commercial firms are more profitable than cooperatives (and, therefore, are more economically efficient), that both types of firms are price takers in the output market, that there is evidence of regulatory effectiveness, that market density affects profits, and that commercial firms experience increasing returns to scale while cooperatives do not.     

A cardinal utility approach for project evaluation

The paper describes a technique whereby individual preferences for monetary and non-monetary consequences of public projects might be combined into an aggregate impact index. The technique is built up from an attribute-based model of consumer choice. It can be used as a complete evaluation tool, having certain similarities with matrix evaluation techniques, or as a method of imputing monetary values to particular non-monetary effects.     

Linking Order Fulfillment Performance to Referrals in Online Retailing: An Empirical Analysis

Referral management for online retailers is a strategically important activity, as referrals offer a highly cost‐effective method of customer acquisition. In fact, online customers mention referrals as the second‐most common reason for choosing to shop at a particular retailer, second only to search engine suggestions. However, while online retailers are able to improve their visibility on search engines through focused keyword insertions, they are often unable to pinpoint the drivers of referral behavior among their customers. The current research examines the relationship between two key dimensions of online retailing: order fulfillment cycle times and referral behavior. Employing a theory of customer appraisal and empirically testing the ensuing model using structural equation modeling, we find that excellent order fulfillment is instrumental in generating referrals for the online retailer, even after factoring in product quality.     

The Federal Trade Commission's Anti-trust Attack on Advertising

Over the last decade, American public policy has turned increasingly against advertising. The Federal Trade Commission, in several test cases, has set out to show that advertising strengthens and sustains the power of the monopolist. By and large, the attack has failed, and thereby enhanced the contrary view that advertising is a force for competitive efficiency.