Corporate Board Composition, Protocols, and Voting Behavior: Experimental Evidence

We examine voting by a board designed to mitigate conflicts of interest between privately informed insiders and owners. Our model demonstrates that, as argued by researchers and the business press, boards with a majority of trustworthy but uninformed “watchdogs” can implement institutionally preferred policies. Our laboratory experiments strongly support this conclusion. Our model also highlights the necessity of penalties on insiders when there is dissension among board members. However, penalties for dissent appeared to have little impact on the experimental outcomes.     

Comparing a Traditional IRA and a Roth IRA: Theory Versus Practice

Financial planners often advise their clients to first take advantage of employer‐sponsored 401(k) plans, especially those with matching employer contributions. They often recommend next that clients consider a traditional or Roth IRA, depending on their current eligibility and tax bracket. Generally, the traditional IRA tends to be preferable to the Roth IRA if one expects to be in a lower tax bracket during the retirement versus the contribution years. This preference could be impacted by the theoretical or the practical assumptions one could make as to the tax bracket effect, minimum distribution requirements, and the impact of withdrawals on the amount of Social Security benefits taxed. This research compares the traditional and the Roth IRA, examining both the theoretical and practical assumptions of client behavior. The results indicate that the best choice between the types of IRAs depends on whether the investor's actual behavior is consistent with theory or practice.     

PERIODIC SEQUENCES OF ARBITRAGE: A TALE OF FOUR CURRENCIES

This paper investigates arbitrage chains involving four currencies and four foreign exchange trader‐arbitrageurs. In contrast with the three‐currency case, we find that arbitrage operations when four currencies are present may appear periodic in nature, and not involve smooth convergence to a ‘balanced’ ensemble of exchange rates in which the law of one price holds. The goal of this article is to understand some interesting features of sequences of arbitrage operations, features which might well be relevant in other contexts in finance and economics.     

Restricted Visions of Multiracial Identity in Advertising

Mixed-race representations have become increasingly evident in marketing communications through the use of celebrity spokespersons like Misty Copeland and Halle Berry. This study explores the sociocultural ramifications of the ways in which marketers represent multiracial identity. Through an interdisciplinary review of pertinent literature, the authors create a theoretical framework for understanding the limitations of visual representations. A temporal model for discerning visual representations of the multiracial identity emerged by combining critical discourse analysis (CDA) techniques to investigate multiracial advertising depictions in eight popular U.S. magazines with interviews of multiracial women and advertising professionals. Findings suggest that marketers use mixed-race representations as cultural currency by mythologizing mixed-race bodies as the new beauty standard and as representing a racial bridge, physically and culturally tailored to ameliorate perceived racial divides. While visual representations in marketing communication have served to legitimatize and normalize mixed-race identity, these images generally ignore mundane consumption practices, obscure the relationships and processes that bring about multiracial bodies, and are devoid of sociopolitical context. The authors offer a framework through which scholars can systematically analyze the sociocultural significance of a wide range of identity coordinates utilized in advertisements and other forms of marketing communication.     

Who is considered an ‘older worker'? Extending our conceptualisation of ‘older’ from an organisational decision maker perspective

A refinement of the construct of age, specifically ‘older’, is recognised as a critical measurement concern for experts in both ageing research and policy formation. In this context, we set out to both chronologically define an ‘older worker’ and to identify on what basis the age of ‘older’ is determined. In doing so, we draw on open‐ended survey data (collected in 2011) from a sample of 407 organisational decision makers across all industries in Ireland. Our focus was specifically on the perspective of organisational decision makers because these individuals will be instrumental in facing the challenges associated with workforce ageing. The results show that workers are considered as ‘older’ at a younger age than might be expected and that decision makers conceptualise workers as ‘older’ using various approaches in the organisational context. Our findings contribute to the literature in three ways: firstly, by providing an important empirically derived understanding of the term ‘older worker’; secondly, by empirically examining previously suggested ‘possible’ indicators of age; and thirdly, by demonstrating that these indicators are conceptually and empirically distinct, advancing theory on the concept of age in the workplace.     

Customer-centric pricing: The surprising secret for profitability

Companies spend enormous amounts of energy and capital in creating value for customers, but less regard is given to actually capturing the value they have created. Segmentation based on buying behavior uncovers a tremendous differential in willingness to pay for subjective product attributes such as convenience, status, and quality. Purchase decisions are made through an assessment of a myriad of factors balancing perceptions of value components against price in a subtle, complex, and often sub-conscious decision matrix. Customer-centric pricing requires the simultaneous and continuous assessment of product attributes, customer perceptions, and the circumstances of time and place by listening to customers' actions. It is a means of assuring that companies assess the value they create for customers and extract that value from the marketplace.     

Autotelic need for touch,haptics, and persuasion: The role of involvement

Previous research has shown that a touch or haptic element attached to a persuasive appeal can increase persuasion, particularly for individuals who have a clear preference for touch to enjoy its sensory feedback (high autotelics). This research extends previous work by including involvement in the context of an appeal by a nonprofit. We find, in an experiment where we manipulate involvement, that when a haptic element is present, high autotelics are more persuaded regardless of their involvement with the message. However, for low autotelics, a haptic element increases persuasion under conditions of low versus high involvement with the message. A second experiment measures involvement and finds that again, under low involvement conditions, both high and low autotelics are persuaded by a touch element. Finally, a field study with a local symphony orchestra is conducted in which involvement with the message is low but involvement with the company is high. In this case, a touch element is only persuasive for high autotelics. © 2011 Wiley Periodicals, Inc.     

How Do Investors Interpret Announcements of Earnings Delays?

Unlike in the case of delays of 10‐K or 10‐Q filings, the SEC does not require managers to disclose delays of earnings announcements to the public. Thus, for companies that are unable to report earnings by their expected date, managers face a decision: remain silent or announce the delay. Prior research has investigated all earnings delays, whether or not they are accompanied by announcements of the delay announcement, and found that the market reaction is slightly negative, on average, for companies that allow their expected earnings dates to pass without disclosing results. It's not clear, however, whether this negative reaction was due to the absence of news or to the information contained in the announcements of the earnings delays. The authors' recent study documents that earnings delay announcements are associated with an average one‐day abnormal stock return of a negative 6%. This statistically as well as economically significant reduction in value is consistent with anecdotal evidence in the popular business press as well as predictions of disclosure theories, in particular the explanation that concerns about legal liability and managerial reputation motivate managers to disclose bad news. The study also shows that almost all managers who announce earnings delays attempt to influence the market reaction by disclosing the underlying cause. Finally, the study shows that the market reaction to earnings delay announcements is positively related to future earnings changes, consistent with the role of these disclosures in providing a signal of deteriorating financial performance.