Modeling social interactions: Identification, empirical methods and policy implications

Social interactions occur when agents in a network affect other agents’ choices directly, as opposed to via the intermediation of markets. The study of such interactions and the resultant outcomes has long been an area of interest across a wide variety of social sciences. With the advent of electronic media that facilitate and record such interactions, this interest has grown sharply in the business world as well. In this paper, we provide a brief summary of what is known so far, discuss the main challenges for researchers interested in this area, and provide a common vocabulary that will hopefully engender future (cross disciplinary) research. The paper considers the challenges of distinguishing actual causal social interactions from other phenomena that may lead to a false inference of causality. Further, we distinguish between two broadly defined types of social interactions that relate to how strongly interactions spread through a network. We also provide a very selective review of how insights from other disciplines can improve and inform modeling choices. Finally, we discuss how models of social interaction can be used to provide guidelines for marketing policy and conclude with thoughts on future research directions.     

Board Pay and the Separation of Ownership from Control in U.K. SMEs

This paper examines Board pay for a sample of 571 U.K. SMEs from 1991 to 1995. Approximately half of the sample were closely-held (i.e., owner-managed) firms which allowed empirical testing of models of the relationship between Board pay and ownership from control characteristics. Consistent with their need to align shareholder and manager incentives, the results indicate that the change in nonclosely-held SME Board pay is significantly related to both external market pay comparisons and “benchmark” profits. This contrasts with the empirical results for the closely-held firms where Board pay awards are typically highly sensitive to current total profits but wholly unrelated to external market pay levels.     

When do B2B brands influence the decision making of organizational buyers? An examination of the relationship between purchase risk and brand sensitivity

The dominant perspective on organizational buying behavior suggests that buyers tend to rely on objective criteria when making product choice decisions and that the potential influence of subjective cues, such as brands, on buyer decision making decreases with increasing risk. An alternative perspective, confirmed in this study by in-depth interviews with various managers, suggests that brands serve as a risk-reduction heuristic, whereby the influence of brands on decision making increases as a function of risk. Building on risk and information processing theories, this research builds on these complementary perspectives to propose that risk and brand sensitivity relate in a U-shaped manner, where brand sensitivity is highest in relatively low- or high-risk situations. The results of scenario- and survey-based field studies—involving 206 and 180 members of buying centers, respectively—suggest that both perspectives have merit and support the proposed nonlinear relationship. Moreover, the findings reveal that the risk-brand sensitivity relationship is moderated by competitive intensity, such that the linear (negative) and quadratic (positive) effects are stronger when competitive intensity is low.     

Pattern of childhood falls in a low-income setting: a cross-sectional study in Dar es Salaam

The objective was to determine patterns and circumstances of childhood falls in a low-income setting in Dar es Salaam, Tanzania. This cross sectional study is based on a household survey conducted in July 2009. A total of 3927 children up to age 18 from 1928 households in 15 sampled wards were surveyed through a structured questionnaire. The current study includes information regarding fall occurrence, socio-demographic and economic factors. Data were analysed using chi-square, t-test and logistic regression. Male children had 42% higher odds of falls compared to females, and rural residents had more than two times higher odds compared to urban residents. Falls occurred three times more among age group 1-4 and two times more among age group 5-9 compared to those between 15 and 18 years. Most falls occurred outdoors (62%) while playing (51%) with boys being over-represented. Females and children aged 1-4 years fell more from stairs whereas most infants fell from furniture. Male gender, younger age groups and rural residence were significant factors for fall injuries. The circumstances in which these falls occur also differ significantly. Intervention efforts should emphasise these patterns.     

High Natural Gas Prices in California, 2000–2001: Causes and Lessons

The market prices of natural gas delivered to California rose to unprecedented levels in late 2000 and remained well above levels elsewhere in the country until the summer of 2001 (Figure 1). In addition to the direct impact on natural gas consumers, the high natural gas prices were also a major cause of the high electricity costs suffered by California and other western states in the June 2000–June 2001 period. This paper describes the market and regulatory circumstances that led to such high prices over such an extended period. Lessons are drawn from this experience for other regions wishing to understand and avoid such problems in natural gas markets.     

An Empirical Investigation of Trade Credit Demand

This paper investigates the motivations for a firm's demand for trade credit. Demand for credit is modelled as a function of transaction costs motivations, financing motivations, operational considerations, seller compliance issues and supplier marketing, whilst controlling for the firm's business environment and for firm characteristics such as size and industry. This paper builds on previous studies by considering a wider range of factors that can affect trade credit demand holistically on a single sample. It appears that the use of trade credit is widespread, and that it is generally perceived as an important short term financing option, although the availability of trade credit is not a major influence on supplier choice. The level of a firm's trade credit demand is found to be significantly influenced by transaction costs, financing, operational issues, marketing activities by suppliers, the firm's investment in trade debtors and firm size.     

Nondiscretionary residential water use: the impact of habits and water‐efficient technologies

Several studies published in the last few decades have demonstrated a low price‐elasticity for residential water use. In particular, it has been shown that there is a quantity of water demanded that remains constant regardless of prices and other economic factors. In this research, we characterise residential water demand based on a Stone‐Geary utility function. This specification is not only theory‐compatible but can also explicitly model a minimum level of consumption not dependent on prices or income. This is described as minimum threshold or nondiscretionary water use. Additionally, the Stone‐Geary framework is used to model the subsistence level of water consumption that is dependent on the temporal evolution of consumer habits and stock of physical capital. The main aim of this study is to analyse the impact of water‐saving habits and water‐efficient technologies on residential water demand, while additionally focusing attention on nondiscretionary uses. This is informed by an empirical application using data from a survey conducted among residents of Brisbane City Council, Australia. The results will be especially useful in the design of water tariffs and other water‐saving policies.     

The Big Family: Informal Financing of Small‐ and Medium‐Sized Businesses by Guanxi

Guanxi facilitates interaction between companies and people in Confucian societies. Does this type of social construct still play the key role, when the entrepreneurs live in Western societies? The objective of this article is to verify the impact of Guanxi on the capacity of small and medium‐sized businesses accessing financial resources informally. To this end, data collected from small Chinese entrepreneurs active in the principal business center of Brazil were used. From nonparametric tests, the results suggest that: (1) different levels of Guanxi allow small and medium‐sized businesses to access informal financial resources; (2) different types of informal financing are mostly used, or judged to be more significant, depending on the level of Guanxi of the entrepreneur in terms of parental and nonfamily ties; and (3) unlike the Western literature on the financial cycles of start‐ups, this type of informal financing can extend beyond the initial stage of the business. © 2014 Wiley Periodicals, Inc.     

The proletarianisation of academic labour

This article looks at industrial relations changes, conflict and control in higher education, particularly among university academics. It suggests a tendency towards proletarianisation, and a focus on the academic labour process is useful in explaining growing conflict. An apparent HRM agenda and (reluctantly) increasing managerialism are forms, not causes, of change which is driven by funding pressures similar to those affecting other HE systems.     

Measuring Employment Security in Europe Using Surveys of Employers

Using results from surveys in which employers were questioned about their freedom to shed staff, we develop a measure of employment security in Europe. We seek to identify which institutional factors are correlated with the responses of employers and find that they appear to reflect the strength of legal restrictions and trade unions and the prevalence of atypical employment. Our results are used to compile an index of employment security that has both a temporal and a cross‐country dimension.