Commodity price inflation, retail pass-through and market power

When commodity prices rise, wholesalers and retailers of products derived from basic commodities respond by passing along at least a portion of the price increase to consumers. In this paper we examine whether firms respond differently to positive commodity price shocks than to negative commodity price shocks; that is, whether commodity price volatility alters market power. We exploit recent volatility in food commodity prices over the period 2007-2010 to investigate how commodity price shocks translate into market power in two different vertically-structured food product industries: potatoes and fluid milk. For potatoes, we find both wholesale and retail market power decreases (increases) during periods of rising (falling) commodity prices. Moreover, price-cost margins widen a substantially greater degree in response to negative shocks than margins narrow in response to positive shocks, indicating that commodity price volatility increases market power. For fluid milk, we find that market power likewise declines during periods of rising commodity prices; however, market power does not significantly change during periods of falling commodity prices, suggesting that commodity price volatility decreases market power.     

A Note on Affordability and the Optimal Share Price

Despite the increase in institutional ownership, decreased trading costs, and increased real personal savings, we find that the average stock price is lower today than it was in the 1920s. In the aggregate, the propensity to split is a function of recent market performance, personal savings, and the desirability of appearing to be a small firm. Our results indicate that, after decades of inflation and the average stock price falling, splitting stocks to return to an affordable trading range must be rejected as an explanation. This suggests that other economic forces are behind splits, whether traditional or behavioral in nature.     

A framework for market-based organizational learning: Linking values, knowledge, and behavior

The authors review the concept of organizational learning and present a broad conceptual framework for its modeling. Within this framework, one specific process for market-based organizational learning is postulated. An empirical test of this model leads the authors to conclude that a more positive learning orientation (a value-based construct) will directly result in increased market information generation and dissemination (knowledge-based constructs), which, in turn, directly affects the degree to which an organization makes changes in its marketing strategies (a behavioral construct). Managerial implications are discussed. His research interests lie primarily in the areas of organizational information use and market-based organizational learning. His work has been published in theJournal of the Academy of Marketing Science, Journal of Advertising Research, Journal of Business Research, andJournal of Marketing. His research interests include both individual and organizational learning. He has published in the areas of consumer decision making, advertising effectiveness, and market-based organizational learning. His research interests include organizational marketing and marketing channels. His work has been published in theJournal of Marketing, Journal of Business and Economic Statistics, Journal of Business Logistics, Journal of Purchasing and Materials Management, andJournal of Health Care Marketing.     

The in-depth testing of survey questions: A critical appraisal of methods

It has become increasingly apparent that the conventional piloting, or pre-testing, of survey questions does not ensure that questions are understood by respondents as researchers intend them to be understood. This has led survey methodologists to advocate the use of indepth testing procedures. While some of the procedures used to identify comprehension problems appear to be reasonably effective, almost all of the procedures used to identify other kinds of problems have not proved to be very useful. Two reasons stand out as explanations for this general lack of success. First, the probes used are themselves not likely to be interpreted in the same way by different respondents. Second, the cognitive psychological assumptions that have suggested many of the procedures may not adequately reflect the processes that underlie the way questions are answered. A number of suggestions are made with the view to making the in-depth testing of survey questions a more profitable exercise.     

An empirical investigation of salespeople’s performance,effort and selling method during a sales contest

This article examines goal theory in conjunction with sales contests. Specifically, the study examines goal difficulty, goal clarity, and goal acceptance and their association with performance, effort and selling method. The results of the study are based on a sales contest of a Fortune 500 industrial sales organization. A theoretical base for goal theory is reviewed. Results indicate that difficult goals and increased acceptance of goals are important attributes in a sales contest. Other results are presented and managerial implications are discussed.     

Disaggregation of Local Apartment Markets by Unit Type

Recent market segmentation research has begun to delve into the issue of whether traditional property-type categories are sufficiently homogeneous to be modeled as aggregate real estate markets. This article extends the research on rental-property market segmentation by investigating the existence of apartment submarkets determined by unit type. The study finds that one-bedroom, one-bath units; two-bedroom, one-bath units; and two-bedroom, two-bath units function as distinct submarkets differentiated by property features, neighborhood location, and temporal changes in market rent.     

HOW STOCK-SWAP MERGERS AFFECT SHAREHOLDER (AND BONDHOLDER) WEALTH: MORE EVIDENCE OF THE VALUE OF CORPORATE "FOCUS"

Alfred Chandler once described the U.S. conglomerate movement of the 1960s and '70s as an "historical aberration and a 'disaster." And the recent trend in corporate mergers and acquisitions away from "diversifying" acquisitions would seem to confirm Chandler's argument.
In what constitutes yet another piece of evidence in support of Chandler's argument, the authors of this article conducted a study of changes in debt and equity values in 260 stock-forstock mergers completed between 1963 and 1996. With a sample almost evenly divided between conglomerate and "related" mergers, the authors report significant net wealth gains for all securityholders as a group in "related" mergers, but generally insignificant net gains for securityholders in conglomerate mergers. Not surprisingly, target firm shareholders experienced net wealth gains in both kinds of acquisitions; but for acquiring company shareholders, there was a striking difference: economically and statistically significant gains for acquirers in related transactions, and significant losses for acquirers in conglomerate deals.
Perhaps the biggest surprise of the study, however, was that even the bondholders of acquirers in related mergers benefited more than bondholders in conglomerate deals. The result is surprising because, to the extent bondholders benefit from corporate diversification, one would expect the opposite result. That bondholders in related mergers experience larger wealth increases than those of conglomerate acquirers is just one more sign of the dramatic differences in total value created by the two kinds of mergers.     

Informed Traders and Price Variations in the Betting Market for Professional Basketball Games

This paper examines betting line changes from the opening to the closing of the point spread betting market on National Basketball Association games for evidence of informed trader betting. We show that within-betting period line changes significantly improve the accuracy of betting lines as forecasts of game outcomes. We examine individual line change magnitudes and show that these are directly and proportionately related to biases in opening lines. Further, line changes are of sufficient magnitude to remove these biases by the close of betting. We interpret these results as evidence that informed traders are influential in this market.