Revenue Recognition in a Multiperiod Agency Setting

This paper examines how various revenue recognition rules affect the incentive properties of accounting information in a stewardship setting. Our analysis demonstrates that if revenues are recognized according to the realization principle, a single performance measure based on aggregated accounting information can be used to provide desirable production and effort incentives to the manager. In contrast, mark-to-market accounting does not provide efficient aggregation of raw information to solve the stewardship problem. Mark-to-market accounting, though sensible from a valuation perspective, fails to provide desirable incentives because it relies on the anticipated, rather than the actual, performance of the manager. We also consider a setting in which the manager can control the timing of the firm's sales. It then becomes desirable to modify the realization principle and apply the lower-of-cost-or-market valuation rule. The desirable accounting thus exhibits a conservative bias.     

Exploring the role of expert power in channel management: An empirical study

Expert power is recognized as a non-coercive source of power, which can be effectively employed in the context of channel management. The paper attempts of look at the impact of expert power on certain channel relationship variables. The behavioral variables considered in the study are the use of behavior-based coordination strategy, use of problem-solving approach for conflict resolution, collaborative communication, cooperation and trust. An empirical study conducted among the computer hardware dealers in India supports the hypothesized linkages between expert power and other relationship variables.     

An analysis of B2B ingredient co-branding relationships

The proliferation of co-branding in consumer markets has been given considerable attention in the literature, yet attention to the practice in business-to-business markets has been limited, despite the growing attention to the role of relationships in the B2B arena. In an examination of co-branding in the industrial sector, this paper discusses the use of ingredient co-branding and uses an econometric modeling approach to offer a rationale for why it occurs. The analysis provides insight into why downstream manufacturers participate in a relationship that strengthens the supplier's position in the market. We find that under the threat to the supplier of entry from a competitor whose costs are unobservable, co-branding relationships will be entered into resulting in a reduced probability of entry. This co-branding arrangement benefits both the incumbent supplier and the downstream manufacturer. The incumbent supplier benefits from the reduced probability of competitor entry, and the downstream manufacturer is rewarded with a lower price. Further, we find that the cost of the co-branded product is lower, due to a mitigation of double marginalization in a vertically-integrated solution. We examine co-branding relationships with and without advertising support and find that co-branding relationships with advertising support tend to be superior.     

Transparency in IPO mechanism: Retail investors’ participation,IPO pricing and returns

Using data from the transparent Indian IPO setting, the paper examines retail investors’ participation, their influence on IPO pricing and the returns they make on IPO investment. The transparency in the mechanism, which allows investors to observe prior investors’ participation, leads to demand which is concentrated at either one or two points of the offer price range. Analysis of investors’ demand during the offer period shows that the participation of retail investors is significantly influenced by the participation of institutional investors. We examine IPO pricing and find that favourable demand by retail investors is positively associated with a high IPO price even after controlling for demand by institutional investors. Further, we find that due to aggressive bidding by overconfident investors, retail investors are, on average, unlikely to make positive allocation weighted initial returns even in a setting where they do not have to compete with institutional investors. Retail investors, however, can earn significant positive allocation weighted initial returns if they limit their participation in IPOs with above average institutional investors’ demand.     

THE EFFECT OF THE FEDERAL DEPOSIT INSURANCE CORPORATION IMPROVEMENT ACT OF 1991 ON BANK STOCKS

In this study we use a multivariate regression model to investigate the effect of the passage of the Federal Deposit Insurance Corporation Improvement Act (FDICIA) of 1991 on returns to the shareholders of bank-holding companies. The empirical results suggest that the shareholders of well-capitalized banks benefited from the enactment of the FDICIA, while those of undercapitalized banks experienced significant losses during the announcement period. However, the shareholders of adequately capitalized banks did not gain or lose significantly from the enactment of the FDICIA. The FDICIA also affected stock returns of large and small bank-holding companies similarly.     

Digital innovation: An essence for Industry 4.0

The goal of this paper is to explain why digital innovation is so important in business organizations in order to survive in Industry 4.0. The study helps to understand the new era of Industry 4.0 and the importance of introducing digital innovation into organizations. A systematic review of the literature and studies on Industry 4.0 and digital innovation were synthesized to find answers to the research questions. To improve their manufacturing industry, organizations have implemented digital technologies such as augmented reality, robotic sensing, artificial intelligence, cloud computing, cyber physical systems, and remote sensing technologies. These technologies focused on automating logistics and supply chain systems, improving manufacturing system performance, and simplifying automated production systems. Because digital innovations save time and energy, employees can devote more time and energy to creative and innovative activities. Organizations should plan to implement digital technology in order to keep the environment healthy and sustainable while meeting the demands of customers, consumers, and the Industry 4.0 dimension.     

Emotions and consumer behaviour: A review and research agenda

Consumers' emotions play a salient role in consumers' buying process, their consumption behaviours, and their engagement with product/service offerings, owing to which, it has gained much attention in recent years as an area of inquiry. However, literature in this field/subject is theoretically fragmented. Therefore, to enhance the conceptual understanding, this study synthesizes extant literature, using a hybrid review approach. Herein, we attempt to integrate bibliometric analysis, along with the theories, contexts, characteristics, and methodology framework, while consolidating and classifying the domain knowledge, trends, and progress/citation analysis using the bibliometric approach. In the process, we reviewed 384 conceptual and empirical articles, published during the period 1967–2021. The idea was to identify key theories, constructs, research contexts, and methods, based on which, we propose a few potential research areas. Based on our thorough analysis, these areas include (1) consumer co-creation, (2) consumer engagement, (3) service employee interactions, (4) consumer decision making, and (5) consumption experience.     

MULTIDIMENSIONAL PORTFOLIO OPTIMIZATION WITH PROPORTIONAL TRANSACTION COSTS

We provide a computational study of the problem of optimally allocating wealth among multiple stocks and a bank account, to maximize the infinite horizon discounted utility of consumption. We consider the situation where the transfer of wealth from one asset to another involves transaction costs that are proportional to the amount of wealth transferred. Our model allows for correlation between the price processes, which in turn gives rise to interesting hedging strategies. This results in a stochastic control problem with both drift-rate and singular controls, which can be recast as a free boundary problem in partial differential equations. Adapting the finite element method and using an iterative procedure that converts the free boundary problem into a sequence of fixed boundary problems, we provide an efficient numerical method for solving this problem. We present computational results that describe the impact of volatility, risk aversion of the investor, level of transaction costs, and correlation among the risky assets on the structure of the optimal policy. Finally we suggest and quantify some heuristic approximations.     

Can brand image move upwards after Sideways? A strategic approach to brand placements

In today's environment of fragmented mass media and popular technologies, such as DVR and TiVo, it is increasingly challenging for marketers to obtain quality face time with audiences. As more customers try to avoid advertisements, there has been growth in brand placement: the practice of integrating brands into entertainment media, particularly television and film. Brand placement engages the audience, limits viewers’ ability to ignore commercial messages, and even impacts purchase behavior—as evidenced by the surge in Blackstone pinot noir wine sales after the brand's placement in the movie Sideways. Despite the prevalence of this practice, however, the industry often operates in a somewhat unfocused manner. In this article, we draw from academic literature and industry publications, offer insight regarding the growing popularity of brand placements, and suggest a specific set of guidelines to enhance the efficacy of placements in accomplishing a brand's marketing objectives.