Scheduling sales force training: Theory and evidence

To have a productive sales force, firms must provide their salespeople with sales training. But from a profit-maximizing perspective, there are also reasons to limit training: training is expensive, it has diminishing returns, and trained salespeople need to be compensated at a higher level since their value in the outside labor market has increased. Due to these reasons, the following inter-related questions are not straightforward to answer: (1) How much training should be provided and how should training be scheduled over time? (2) How should compensation vary with training? (3) Should salespeople be asked to pay for some or all of their training? An analytical model is developed and analyzed using optimal control theory to provide answers to these questions. Thereafter, an empirical investigation is undertaken that broadly corroborates the analytical findings.     

Perspectives on Multiple Category Choice

Multiple category choice is a decision process in which an individualselects a number of goods, all of which are nonsubstitutable with respect toconsumption. Choices can be made either simultaneously or sequentially. Thekey feature of multiple category choice is the treatment of the choices asinterrelated because each item in the final collection of goods contributesto the achievement of a common behavioral goal. We discuss current andpotential applications of psychology, economics and consumer choice theoryin developing models of multiple category choice.     

The Structure of Licensing Contracts

Industrial organization theory has explored several issues related to licensing, but empirical analyses are extremely rare. We amass a new and detailed dataset on licensing contracts, and use it to present some simple 'facts' concerning licensing behavior. Our analysis reveals robust cross-industries differences in several contractual features, such as exclusivity, cross-licensing, ex-ante versus ex-post technology transfers, and licensing to related versus unrelated parties. We offer an interpretation of these facts based on cross-industry variation in the strength of intellectual property rights.     

Financing the Provision of Global Public Goods

This paper examines the concept of global public goods (GPGs) and in that context explores the extent of aid (ODA) presently being diverted to GPG provision and whether such diversion skews aid‐flows towards some recipients. These are examined on the basis of OECD data for the late 1990s. The main argument of this paper is that ODA should not be used for financing GPG provision by developing countries. Instead, it is suggested that other sources of financing the provision of GPGs should be developed keeping in view the various technologies by which the GPGs can be produced and design principles for supra‐national institutions. Various arguments from Sandler, Barrett and Kanbur are considered. In particular, Kanbur's suggestion of two tensions involving the principles of economies of scale, subsidiarity, economies of scope and specialisation, is explored further.     

Financial Distress and Bank Lending Relationships

We use a unique data set of bank loans to examine the wealth effects on lead lending banks when their borrowers suffer financial distress. We find a significant negative announcement return for the lead lending bank when a major corporate borrower announces default or bankruptcy. Banks with higher exposure to the distressed firm have larger negative announcement-period returns. The existence of a past lending relationship with the distressed firm results in larger wealth declines for the bank shareholders. Finally, financial distress also has a significant negative effect on borrower's returns.     

Context-general and Context-specific Determinants of Online Satisfaction and Loyalty for Commerce and Content Sites

We use the context-general and context-specific factor approach to examine the generalizability of satisfaction and loyalty models across two disparate online contexts—online retailing and content site browsing. Our conceptual models include the moderating effects of user-characteristic Web expertise, besides main effects of Web site factors and Web expertise. Results indicate that satisfaction and loyalty judgments are sensitive to both context-general and context-specific determinants, as well as to some interactions between them. Among context-general determinants, ease of use and customer service are positively related to satisfaction, Web community to loyalty, and Web expertise to both satisfaction and loyalty. Flow, a context-specific determinant, has a significant positive effect on satisfaction alone; security affects loyalty alone; and fulfillment/reliability and information quality are significant predictors of both satisfaction and loyalty. The results show that Web expertise moderates the effect of ease of use on satisfaction. The study contributes to marketing theory and practice by identifying satisfaction and loyalty mechanisms that are potentially generalizable across the two online contexts and providing a guiding framework for simultaneous consideration of context-specific and context-general factors in future research.     

Filling in the blanks: network structure and interbank contagion

The network pattern of financial linkages is important in many areas of banking and finance. Yet, bilateral linkages are often unobserved, and maximum entropy serves as the leading method for estimating counterparty exposures. This paper proposes an efficient alternative that combines information-theoretic arguments with economic incentives to produce more realistic interbank networks that preserve important characteristics of the original interbank market. The method loads the most probable links with the largest exposures consistent with the total lending and borrowing of each bank, yielding networks with minimum density. When used in a stress-testing context, the minimum-density solution overestimates contagion, whereas maximum entropy underestimates it. Using the two benchmarks side-by-side defines a useful range that bounds the cost of contagion in the true interbank network when counterparty exposures are unknown.