Eliciting preferences and the construction of indifference maps: A comparative empirical evaluation of two measurement methodologies

The paper reports results of experiments conducted to evaluate the following methods of preference measurement: (a) the method of eliciting certainty equivalents to gambles, for obtaining a von Neumann Morgenstern utility function; and (b) the dominance method for obtaining indifference maps. The following attributes were used for method comparison: (1) test-retest consistency; (2) linearity of trade-offs; (3) confidence in the method; (4) ease of judgment required by method; and (5) goodness of method predictions. The study also investigated the associations between method reliability and several behavioural and experimental factors such as subjects' acceptance of rationality axioms, propensities of subjects for judicial modes of evaluation, perceived realism of scenarios and subjects' discrimination bands for probabilities.     

Venture capital: Investor and investee perspectives

The venture capitalist plays a crucial role in, the startup and growth phases of entrepreneurial firms. Yet, the burgeoning but still relatively modest venture capital research literature continues to be characterized by isolated studies of how venture capitalists raise capital and select investments; little effort has been made to consolidate and integrate these findings. In particular, little is known about the impact of the venture capitalist's decision upon the entrepreneurial process.This paper has two objectives: The first is to review the available material and literature on venture capital decision-making and its impact on entrepreneurship. The second objective is to elucidate a research methodology which involves three different units of analysis as they relate to venture capital decision-making: the venture capitalist, the deal which was funded, and the proposal which was denied. Results from these three inter-related studies by the authors are reported.     

Insider Trading in the Hong Kong Stock Market

Many previous studies on insider trading are based ondata in the U.S. capital market and conclude thatinsiders can earn abnormal profits. This paperexamines abnormal price performance associated withinsider trading in the Hong Kong stock market. We findthat abnormal profits associated with insider tradingare all concentrated on small firms. Trading volumedoes matter in determining the magnitude of thoseabnormal profits. Our results show that insiders ofmedium-sized and large firms do not earn abnormalprofits. Finally, it is found that outsiders who mimicthe information of insider trades associated withmedium-sized and large firms cannot earn abnormalprofits.     

Marking high-technology market evolution through the foci of market stories: the case of local area networks

Previous research suggests that changing consumer and producer knowledge structures play a role in market evolution and that the sociocognitive processes of product markets are revealed in the sensemaking stories of market actors that are rebroadcasted in commercial publications. In this article, the authors lend further support to the story-based nature of market sensemaking and the use of the sociocognitive approach in explaining the evolution of high-technology markets. They examine the content (i.e., subject matter or topic) and volume (i.e., the number) of market stories and the extent to which content and volume of market stories evolve as a technology emerges. Data were obtained from a content analysis of 10,412 article abstracts, published in key trade journals, pertaining to Local Area Network (LAN) technologies and spanning the period 1981 to 2000. Hypotheses concerning the evolving nature (content and volume) of market stories in technology evolution are tested. The analysis identified four categories of market stories—technical, product availability, product adoption, and product discontinuation. The findings show that the emerging technology passes initially through a 'technical-intensive' phase whereby technology related stories dominate, through a 'supply-push' phase, in which stories presenting products embracing the technology tend to exceed technical stories while there is a rise in the number of product adoption reference stories, to a 'product-focus' phase, with stories predominantly focusing on product availability. Overall story volume declines when a technology matures as the need for sensemaking reduces. When stories about product discontinuation surface, these signal the decline of current technology. New technologies that fail to maintain the 'product-focus' stage also reflect limited market acceptance. The article also discusses the theoretical and managerial implications of the study's findings.     

Technologies, products and firms' strategies part 2-analysis of three cases

This article is in two parts, Part I having been published in an earlier issue of this journal. It examines the character. and significance of 'strategies' fomtulated within the R&D function of a business, and their relationship to the broader business strategy of the parent company. The discussion i n Part 1 formed a basis for the analysis of case-studies of three large UK companies, ,wh.ich are presented here as Part 2 of the article. Part 1 ident$ed the three foci of innovation studies: the innovations themselves; patterns of innovation within discrete industrial sectors, the in:novatingjmns and their strategies. In Part 2 the substance of the case studies are presented and the lessons which they reveal are reviewed. The case studies were conducted in three large UK companies, one in the automotive component industry, another in the precious metals industry, with special reference to ceramic colours and pigment blending, and the third in the chemical industry. Use of the analytical devices produces intrwrting case study material, and indications for future research. In particular the need to explore further the separation of technology and products as objects of R&D study; further exploration of Pavitt's 1984 taxonomy, and an improvement in the understanding of strategy fornulation using a processual and interpretivist framework.     

Liquidity constraints and the hedging role of futures spreads

This paper examines the behavior of the competitive firm under price uncertainty in general and the hedging role of futures spreads in particular. The firm has access to a commodity futures market where unbiased nearby and distant futures contracts are transacted. A liquidity constraint is imposed on the firm such that the firm is forced to prematurely close its distant futures position whenever the net interim loss due to its nearby and distant futures positions exceeds a threshold level. This paper shows that the liquidity constrained firm optimally opts for a long nearby futures position and a short distant futures position should the firm be prudent, thereby rendering the optimality of using futures spreads for hedging purposes. This paper further shows that the firm's production decision is adversely affected by the presence of the liquidity constraint. © 2004 Wiley Periodicals, Inc. Jrl Fut Mark 24:909–921, 2004     

Stimulating the flow of innovations to the U.S. automotive industry

This is a report of a study of barriers, facilitators, and incentives to innovation among suppliers to the U.S. automotive industry. It follows and is integrated with two earlier studies on this subject by one or both of the present authors. One gathered data on a sample of innovations from a number of suppliers to identify the kinds of barriers and facilitators they encountered in their attempts to innovate for the automotive industry. The second focused on possible incentives for research aimed at increasing and improving the technology base for the automotive industry. The current study combined both aspects and probed, in more depth than was possible in the first set of case studies, the possibility of government incentives helping to ease or eliminate barriers to innovation at the project level.Twenty-eight innovation project cases were examined in three large automobile supplier companies. Data were gathered by a combination of face-to-face interviews, telephone interviews, and one mailed questionnaire. The barriers mentioned most frequently in connection with this sample of projects were 1) problems in selling and developing products for automotive market, 2) government actions, 3) cost (e.g., development, capital), 4) high-volume product requirements, and 5) general historical trends (e.g., resistance to change). On the other hand, respondents mentioned the following facilitators most frequently as stimulating innovation to the auto industry: 1) the nature of the automotive market and the customer, 2) the capabilities of the supplier and recent trends in the supplier's environment, 3) government actions, and 4) competition.Respondents' suggestions of a number of potential government actions were combined and analyzed with the results of the two earlier studies, and five general classes of incentives were selected as possible experimental variables in a proposed set of administrative experiments to be conducted among suppliers to the automotive industry. The five experimental or independent variables (incentives) were 1) cooperative research, 2) research grants and contracts, 3) technical information, 4) cost sharing, and 5) demonstrations. In addition, a large set of behavioral or decision events, derived from the first study in this series, was presented and candidates for dependent or outcome (performance) variables to be measured for specific experiments were discussed.