Unconditional and conditional takeover offers: experimental evidence

This article compares the predictions of finite-shareholdermodels of conditional and unconditional takeover offers withthe outcomes of laboratory experiments. In addition to differentiatingbetween types of offers, the experimental designs span smalland large firms as well as different levels of offer premiums.It is found that in unconditional offers to large groups ofsubjects (28-40), the symmetric Nash equilibrium predicts observedtendering frequencies quite accurately. For other experimentaldesigns, the results are mixed. The analysis of shareholdertendering strategies from the experiment yields insights into(I) the effects of takeover offer designs, (ii) the appropriatenessof finite-shareholder models for research, and (iii) the costsof free riding when shareholders are nonatomistic.     

A comparison of the WHO and the UK codes of practice for the marketing of breastmilk substitutes

In 1981 the WHO approved a code of practice for the marketing of breastmilk substitutes, and in 1983 the UK Government sponsored the introduction by the manufacturers of a code which applied the WHO Code to the UK. The government used a drafting by sellers method which is almost identical to the procedure used by the Office of Fair Trading to draft the codes it sponsors. The text of the UK Code diverges from that of the WHO Code so that the present marketing mix for infant formula in the UK is protected: advertisements in the Health Service, informational materials for mothers, free samples for mothers, donations to Health Staff, an advisory service directly to mothers, and point of sale promotion. In effect, the UK Code renders the WHO Code inoperative in the UK.The comparison of the two codes suggests that the drafting by sellers procedure used for OFT-sponsored codes and adopted by the government for the UK Code of Practice for Infant Formula, results in codes that are weak ones from the point of view of the consumer. The drafting procedure eases the introduction of codes but also conserves the status quo in the market. The procedure precludes a balanced judgement between the interests of the consumers and the producers.

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Ein Vergleich der internationalen und der englischen Richtlinien für das Marketing von Muttermilch-Ersatzprodukten

Zusammenfassung Im Jahre 1981 erließ die Weltgesundheitsorganisation internationale Richtlinien für das Marketing von Muttermilch-Ersatzprodukten. Zwei Jahre später unterstützte die britische Regierung die Einführung entsprechender nationaler Richtlinien für das eigene Land. Wie bei anderen britischen Marketing-Richtlinien wurden sie auch hier von den Herstellern selbst formuliert.Der Text der britischen Richtlinien weicht von den internationalen Richtlinien dahingehend ab, daß das derzeitige Marketing-Mix für Säuglingsnahrung in Großbritannien geschützt wird, nämlich Werbung im Gesundheitsdienst, Informationsmaterial für Mütter, Probepackungen für Mütter, Werbegeschenke an das Krankenhauspersonal, ein Direktberatungsdienst für Mütter sowie Verkaufsförderung in den Geschäften. Im Ergebnis werden damit die internationalen Richtlinien für Großbritannien außer Kraft gesetzt. Der Vergleich der beiden Richtlinien führt zu der Schlußfolgerung, daß die starke Beteiligung der Hersteller bei der Erarbeitung der Richtlinien, so wie sie in Großbritannien üblich ist, zu Richtlinien führt, die unter dem Gesichtspunkt des Verbraucherinteresses zu schwach sind. Das Verfahren erleichtert zwar die Einführung von Richtlinien, sichert aber zugleich den Status quo auf dem einzelnen Markt. Es verhindert dadurch einen angemessenen Ausgleich zwischen den Interessen der Nachfrager und Anbieter.

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Robert Hamilton is a Lecturer in Marketing at the University of Lancaster, Gillow House, University of Lancaster, Bailrigg, Lancaster, UK, LA1 4YX, and Dale Whinnett a Research Assistant at the Trent Business School, Nottingham, UK, NG1 4B4.     

An Essay on When to Fully Disclose in Sales Relationships: Applying Two Practical Guidelines for Addressing Truth-Telling Problems

Salespeople have a moral obligation to prospect/customer, company and self. As such, they continually encounter truth-telling dilemmas. "lgnorance" and "conflict" often block the path to morally correct sales behaviors. Academics and practitioners agree that adoption of ethical codes is the most effective measure for encouraging ethical sales behaviors. Yet no ethical code has been offered which can be conveniently used to overcome the unique circumstances that contribute to the moral dilemmas often encountered in personal selling. An ethical code is developed that charts ethical paths across a variety of sales settings (addressing "ignorance") while illustrating why the cost associated with acting morally is generally reasonable (addressing "conflict"). The code applies the universal transactional notions of customer expectations and salesperson reputation to illustrate why and when salespeople are morally required to tell the truth. In doing so, the code tackles head-on the vexing question of how best to juggle mixed motives - involving self-interests, corporate-concerns, cus-tomer-needs and other influences such as the nature of the transaction. The issue of how mixed motives can be dealt with through moral means is one that ethicists have previously sidestepped (Stark, 1993).     

WHO WINS AND WHO LOSES FROM VOLUNTARY EXPORT RESTRAINTS?:The Case of Footwear

Voluntary export restraints have been a popular resort of industrialcountries faced with increasing competition from exports ofdeveloping countries. As a strategy for circumventing the rulesof the GATT (whose regulations preclude increases in tariffs),these nontariff barriers have been rather successful; whetherthey have been as successful in their aim of protecting andstimulating the industry concerned is another matter. This article looks at what happened when industrial countriesimposed—and then removed—voluntary export restraintson the footwear industry during the 1970s and 1980s. Why didprotectionism spread so fast and then dissipate almost as rapidly,and what effects did this coming and going have on the exportingcountries We suggest that industrial countries removed the restraintsbecause they found ?them either superfluous (the expected employmenteffect failed to materialize) or ineffective (the principalexporters maintained their market share during the height ofthe restrictions), or else because the industry was able toadjust by importing footwear at a profit. Predicting the effect of VERs, and determining how best to managethem, are critical questions for developing countries strugglingto improve their export performance in the 1990s. The resultsof detailed study of a representative industry, summarized here,may assist in the prediction and determination.      

Investing exhaustible resource rents and the path of consumption

Abstract.  We set out dollar‐valued net national product for an economy with a wasting essential stock (oil deposit). We take up 'maintaining capital intact' and locally unchanging consumption. The percentage change in 'net investment' or 'genuine savings,' relative to the market rate of interest, denotes whether current consumption is rising, constant, or declining. JEL classification: O13, Q28, F0     

Class, gender and marriage

This paper estimates the contributions of differential fecundity, social heterogeneity, assortative matching and search frictions to aggregate marriage behavior in 18th century Quebec. The reduced form estimates show that a simple random matching model of the marriage market, in which there are gains to assortative matching and women may leave the marriage market at a higher rate than men, can explain these data. The estimates also show that the marriage market was segmented by social status.     

Capital Accumulation and Resource Depletion: A Hartwick Rule Counterfactual

How much produced capital would resource-abundant countries have today if they had actually followed the Hartwick Rule (invest resource rents in other assets) over the last 30 years? We employ time series data on investment and rents on exhaustible resource extraction for 70 countries to answer this question. The results are striking: Venezuela, Trinidad and Tobago, and Gabon would all have as much produced capital as South Korea, while Nigeria would have five times its current level. A specific rule for sustainability – maintain positive constant genuine investment – is shown to lead to unbounded consumption.     

Efficiency and distributional implications of global restrictions on labour mobility: calculations and policy implications

This paper sets forth a procedure for calculating the annual efficiency gains from alternative changes in existing international immigration restrictions and evaluates the impact of wage rate changes on nonmigrating labor. Data on US gross national product (GNP)/capita across countries are used to infer differences in the marginal productivity both between countries and across major world trading areas. The method assumes that the worldwide labor supply is fixed, that full employment occurs in all regions, and that differences in labor's marginal product across regions arise because of barriers to inward mobility of labor in high-wage countries. When these barriers are removed, labor is assumed to be reallocated and efficiency gains occur. Results of the calculations suggest large gains from the removal of global immigration controls which, in most cases, exceed existing worldwide GNP generated in the presence of labor mobility restrictions. A large portion of the gain is accounted for by labor migration between the aggregated rich and poor countries. Over 40% of the total potential gain is realized when only 10% of the wage differential is eliminated, suggesting that small changes in global migration restrictions have large marginal effects. Wage rates increase in labor-losing regions and decline in labor-receiving regions, dramatizing the incentives for labor unions in high-wage countries to oppose liberalization of immigration restrictions. These results suggest large potential worldwide efficiency gains from a move toward an international labor market free of immigration controls. This issue may be far more important to the North-South debate than a focus on initiatives such as commodity price stabilization, relaxation of trade protection, or increased aid flows.     

The substitution strategy dilemma: substitute selection versus substitute effectiveness

Many brands build market share by acting as a substitute when competitive brands become undesirable or difficult to obtain. Notably, prior research offers competing strategic recommendations for marketers hoping to encourage consumers to engage in substitution. Past research examining substitute selection—measuring consumers’ beliefs about how well one product will substitute for another—suggests that marketers should offer replacements that are similar to the initially preferred product. In contrast, research examining substitute effectiveness—the consequences of substitution—suggests that differentiated brands will enjoy more long-term success. We integrate these two streams of research, explaining why there is a mismatch between substitute selection and substitute effectiveness, replicating and showing boundary conditions for the effects, and testing a managerial intervention that encourages consumers to choose more dissimilar (and more effective) substitutes.