Sealed bid auctions versus ascending bid auctions: an experimental study

This paper considers two multi-item auction formats (ascending and sealed bid) which both identify the minimum Walrasian equilibrium prices and where truthful preference revelation constitutes an equilibrium. Even though these auction formats share many theoretical properties, there are behavioral aspects that are not easily captured. To explore this issue in more detail, this paper experimentally investigates what role the design of the auction format has for its outcome. The results suggest that the sealed bid mechanism performs weakly better in all of the investigated measures (consistent reporting, efficiency etc.). In addition, we find that the performance of the ascending auction is increasing over time, whereas the sealed bid auction shows no such tendency.     

Toward Understanding Persuasion Expressions: The Activation of Attitudes

In response to sales representatives’ closing expressions, consumers’ stored attitudes are activated spontaneously from memory and influence product evaluations. Studies 1a and 1b examined the levels of favorability associated with several persuasive expressions. Study 2 then examined whether a sales representative's use of a more (Authority) or a less (Scarcity) favorable persuasive expression would affect consumers’ subsequent product and advertisement evaluations. The expressions were found to work differently depending upon two moderator variables: Need for Cognition and argument quality. The effect of Scarcity heightened subsequent product evaluation as Need for Cognition decreased, whereas the effect of Authority heightened subsequent product evaluation as Need for Cognition increased. The Scarcity statement did not affect product evaluations given strong or weak message claims in the advertisement, whereas the Authority statement produced more favorable product evaluations given strong versus weak messages claims. Cognitive response analyses and mediation patterns also indicated that the two persuasive expressions were distinct based upon individuals’ Need for Cognition. Implications for both sales representatives and consumers are drawn from these findings.     

Divergent and convergent logic of firms: Barriers and enablers for development and commercialization of innovations

This paper describes and discusses similarities and differences in the priorities, interests, and interactional goals of companies involved in the development and commercialization of innovation. We refer to such priorities, interests, and interactional goals as the logic of firms, and point to how differences among companies in these regards may enable or inhibit the development and commercialization of innovation. A case study in drug development, from a Taiwanese biopharmaceutical, illustrates two types of innovations: generic and novel drug development. Findings suggest how logic places focus on how certain actors may be more motivated toward innovation, but also on how the logic portrayed by actors can promote certain types of innovations (in this case generic ones), while inhibiting others (novel innovations). The paper concludes that companies need to have convergent logic (i.e. have the same priorities and similar or complementary interests and interaction goals) if an innovation process is to be successful. The focus on priorities, interests, and interactional goals of companies in innovation processes complements previous research that has primarily focused on the actual interaction, not what motivates it. The construct of shared logic nets as a means of analyzing convergent logic and gaps between different types of logic help to understand enablers and barriers to innovation.     

An Experimental Study of Influences of Performance-Related Payments on Timing of Delegated Stock Purchases

Performance-related bonuses are important tools for investment organizations to incentivize stock traders. Yet, two experiments indicate that bonuses rewarding short-term performance may lead to worse timing of purchases. The authors propose that hyperbolic time discounting makes participants set lower aspired purchase prices for short-term (decreasing percentage) bonuses than for long-term (increasing percentage) bonuses. For this reason purchases are made earlier for decreasing than increasing percentage bonuses, earlier for decreasing than random prices, and earlier for high price volatility than for low price volatility. Neither purchases at the lowest price or highest bonus are attained. Hyperbolic time discounting may account for bubbles observed in experimental double-auction markets.     

Exchange Rates and Income-Sensitive Capital Flows

Capital flows have recently been sensitive to income expectations, as well as to interest rates. This article considers some implications of this for policy.