Escalation bias: Does it extend to marketing?

Escalation bias implies that managers favor reinvestments in projects that are doing poorly over those doing well. We tested this implication in a marketing context by conducting experiments on advertising and product-design decisions. Each situation was varied to reflect either a long-term or a short-term decision. Besides these four conditions, we conducted three replications. We found little evidence of escalation bias by 365 subjects in the seven experimental comparisons. J. Scott Armstrong has been a professor at The Wharton School since 1968. During this time he has also been a visiting professor in Sweden, Switzerland, Thailand, Australia, New Zealand, and Argentina. He is a founder and past editor of the Journal of Forecasting and the International Journal of Forecasting. In addition to forecasting, he has published research on strategic planning, the scientific method, social responsibility, and survey research methods. holds an M.Sc. (Technology Management) and B.Comm. (Marketing) from the University of Saskatchewan, Canada. Nicole’s dissertation research focuses on the internationalization process of software developers. In particular, she examines “deviations” in international linkage development by small firms, with a focus on marketing management issues. Her other research interests relate to entrepreneurial growth, the marketing/manufacturing interface, and strategic planning processes. Barbara Safranek worked as a marketing consultant in Japan and was then co-president of the Friends of Japan (Tokyo, Japan) for three years. Currently she is vice-president of Japanese Equities-Sales at S.G. Warburg & Co.     

On the trait antecedents and outcomes of service worker job resourcefulness: A hierarchical model approach

In a series of three studies, a four-level hierarchical model of personality was employed to identify the antecedents and three validating criteria of a newly developed trait labeledjob resourcefulness (JR). JR is defined as an enduring disposition to garner scarce resources and overcome obstacles in pursuit of job-related goals. Across three service contexts, JR was shown to predict customer orientation, self-rated performance, and supervisor-rated performance. The results also revealed that the hierarchical model accounted for more variance in performance ratings than one version of the 5-Factor Model of personality. Results are discussed in terms of their implications for selecting high-performing service employees. Jane W. Licata (jwlicata@sosu.edu) is an associate professor of marketing at Southeastern Oklahoma State University. She has published articles in theJournal of Public Policy and Marketing, theJournal of Marketing Research, and theJournal of Business Research. John C. Mowen (jcmmkt@okstate.edu) is Regents Professor and holds the Noble Chair of Marketing Strategy at Oklahoma State University. He has published articles in numerous journals, including theJournal of the Academy of Marketing Sciences, theJournal of Marketing Research, theJournal of Marketing, Decisions Sciences, theJournal of Applied Psychology, and theJournal of Personality and Social Psychology. Eric G. Harris (eharris@lklnd.usf.edu) is an assistant professor of marketing at the University of South Florida. He has published articles inPsychology & Marketing and theJournal of Marketing Management. Tom J. Brown (tomb@okstate.edu) is an associate professor of marketing at Oklahoma State University. He has published in numerous journals, including theJournal of Marketing, theJournal of Marketing Research, and theJournal of Consumer Research.     

What's Left for ‘Social Europe’? Brexit and Transnational Labour Market Regulation in the UK-1 and the EU-27

The paper examines UK government positions on the regulation of transnational labour in the context of Brexit. Through an analysis of EU regulations on posted workers – the practice whereby a company based in one EU member state sends workers to carry out a service in another EU member state – the paper argues that the UK has consistently advocated further liberalisation of transnational labour markets in EU level decision-making, a position consistent with promoting increasingly ‘flexible’ labour markets at home. Brexit marks a turning point. Demands from British workers for stronger protection against liberalising pressure help explain the UK's recent shift towards relaxing its opposition to ‘market-correcting’ EU initiatives like the revised posted worker directive. Brexit provides a window of opportunity for the revitalisation of ‘Social Europe’ in the EU-27, without a longstanding veto player at the bargaining table, but one more likely focused more on upholding national labour protections than initiating new supranational policies.     

Crises,Liquidity Shocks,and Fire Sales at Commercial Banks

If liquidity shortages cause financial crises, a lender of last resort can provide funds to banks facing potential fire sales. However, if funding problems primarily occur at banks with existing solvency problems, then government liquidity programs may not spur bank lending. We find that commercial bank funding does not typically dry up in a crisis, not even during the subprime crisis. Rather, weak banks are more likely to borrow less. Furthermore, banks rely more on deposits and newly issued equity than fire sales. When they do sell assets, they cherry pick assets in order to alleviate pressure from capital regulations.     

Skills Required of Managers in Livestock Production: Evidence from Focus Group Research

Identification of skill sets required of managers and supervisors in livestock production is necessary to guide selection, training, task assignment, and promotion. Management roles in livestock production differ from those in other industries, given the unique work environment and task attributes of production agriculture. Based on focus group discussions with pork operation managers, iterative code development resulted in five management skill sets: Change Agent, Counselor, Model Employee, Motivator, and Housekeeper. These skill sets were compared with a data set of dairy operation managers and with research in other industries based on the Competing Values Framework for managerial leadership.     

Smallholder Supply Response to Marketing Board Activities in a Dual Channel Marketing System: The Case of Zambia

In recent years, parastatal grain marketing boards have re‐emerged as important elements of grain markets in eastern and southern Africa, yet little is known about how farmers are responding to their scaled up activities. This article develops a conceptual model of farmers’ production decisions in the context of dual output marketing channels (government and private sector) when output prices at harvest time and the availability of one of the marketing channels are unknown at planting time. It then applies the model to the case of Zambia and uses nationally representative household‐level panel survey data to estimate the effects of the Food Reserve Agency (FRA), the government parastatal maize marketing board, on smallholder crop production and fallow land. The FRA buys maize from smallholders at a pan‐territorial price that typically exceeds market prices in major maize producing areas. Results suggest that increases in the farmgate FRA maize price raise farmer maize price expectations, which induces a supply response. Smallholders respond to an increase in the FRA price by extensifying their maize production. On average, a 1% increase in the FRA price is associated with 0.06% increases in smallholders’ maize area planted and quantity harvested. There is also some evidence that farmers reduce the area of land under fallow in response to FRA incentives but there is no evidence of reductions in the area planted to other crops.     

PORTFOLIO OPTIMIZATION WITH JUMPS AND UNOBSERVABLE INTENSITY PROCESS

We consider a financial market with one bond and one stock. The dynamics of the stock price process allow jumps which occur according to a Markov-modulated Poisson process. We assume that there is an investor who is only able to observe the stock price process and not the driving Markov chain. The investor's aim is to maximize the expected utility of terminal wealth. Using a classical result from filter theory it is possible to reduce this problem with partial observation to one with complete observation. With the help of a generalized Hamilton–Jacobi–Bellman equation where we replace the derivative by Clarke's generalized gradient, we identify an optimal portfolio strategy. Finally, we discuss some special cases of this model and prove several properties of the optimal portfolio strategy. In particular, we derive bounds and discuss the influence of uncertainty on the optimal portfolio strategy.