Technology-enabled interactions in digital environments:a conceptual foundation for current and future research

Journal of the Academy of Marketing Science -     

Interactive Technologies and Retailing Strategy: A Review,Conceptual Framework and Future Research Directions

During the past decade, a number of interactive technologies, including the Internet, have fundamentally transformed how retailers compete in the marketplace. In a similar vein, emerging interactive technologies can be expected to significantly alter the retailing landscape through their impact on retailing strategy and operations. Furthermore, it is conceivable that certain emerging interactive technologies will be perceived by some retailers as enablers (tools to more effectively compete in the marketplace) and by other retailers as disruptors of the present ways of doing business. Interactive technologies can either be generic, a technology that is readily available from an information technology (IT) vendor and is widely adopted by retailers, or proprietary. An interactive technology that is proprietary can enable a firm to generate economic rents from the innovation for an extended duration of time. Investing in a generic interactive technology, however, may be perceived as a cost of doing business for a retailer, and not a potential source of sustainable competitive advantage. However, a retailer's complementary resource endowments may enable the retailer to more effectively leverage a generic technology relative to its competitors and thereby achieve a sustainable competitive advantage. In this paper, we review the related literature, develop a process model delineating the mechanisms by which an interactive technology can affect and necessitate changes in retailers' strategies and identify directions for future research.     

First-and second-best allocations under economic and environmental uncertainty

This paper uses a micro-founded DSGE model to compare second-best optimal environmental policy, and the resulting Ramsey allocation, to first-best allocation. The focus is on the source and size of uncertainty, and how this affects optimal choices and the comparison between second- and first-best. While higher economic volatility is bad for social welfare in all cases studied, the welfare effects of higher environmental volatility depend on its size and the effectiveness of public abatement policy. The Ramsey environmental tax is pro-cyclical when there is an economic shock, while it is counter-cyclical when there is an environmental shock.     

Environmental Ramsey Policy and Sustainable Balanced Growth

We study the link among economic growth, renewable natural resources and environmental policy. The context is a general equilibrium model of endogenous growth and environmental policy. We examine the conditions under which sustainable growth is both feasible and optimal, where the latter takes the form of second‐best optimal environmental Ramsey policies. We also investigate the conditions for an inverted U‐shaped relation between environmental policies and sustainable growth. We show that the combination of environmental production externalities and second‐best optimal Ramsey policies can lead to both local and global indeterminacy. The introduction of environmental policy, although well‐intentioned and designed to correct for market inefficiencies, triggers an expectations coordination problem; thereby differences in environmental quality and economic growth can be explained among countries with the same fundamentals.     

Exploring the interaction between stock price index and exchange rates: an asymmetric threshold approach

This article examines the impact of stock market news on the foreign exchange markets of USA, Canada and UK, employing an innovative extension of the asymmetric threshold model of Apergis and Miller (2006). Under this framework we can disentangle the reaction of foreign exchange market to bad or good news and small or large news of stock returns. Our comprehensive daily data-set spans the period from January 1990 to June 2014. Using a cointegration and error correction model, we document the existence of a causal relationship between stock market and foreign exchange markets. Most interestingly, our results derived from the asymmetric threshold model confirm that the relationship between stock and foreign exchange markets is sensitive to short-term good or bad news and short-term small or large news. Our findings entail significant implications for policymakers, governments, risk managers and international investors.     

Choosing the size of the public sector under rent seeking from state coffers

This paper incorporates rent seeking from state coffers into a general equilibrium model of economic growth and endogenous policy. Self-interested individuals try to extract, for personal benefit, part of tax revenues that could be used to finance public investment. We solve for a non-cooperative Nash equilibrium in individual agents' behavior. The determinants of rent seeking in general equilibrium are identified and we consider the efficient size of public sector given the rent-seeking activity. Cross-country data from 108 rich and developing countries provide support for our predictions.     

From consumer response to active consumer: Measuring the effectiveness of interactive media

Traditional measures of the effectiveness of marketing communications suggest a specific process by which marketing actions influence consumers. This article offers a broader philosophical perspective on measuring the effectiveness of marketing communications that focuses on interaction as the unit of analysis, rather than the behavior of either the marketer or the consumer. Structuration theory is discussed and offered as a viable foundation for the identification, selection, and evaluation of new measures of effectiveness in an interactive context among active, goal-driven consumers and marketers. Structuration theory focuses on the emergency and evolution of the structure of interaction, which is posited as a critical factor in devising, selecting, and evaluating new measures of the effectiveness of marketing communications. This view broadens the potential set of measures of effectiveness of interactive marketing communications, implying alternative meanings for measures under different interaction structures and combinations of goal states. David W. Stewart is the Robert E. Brooker Professor of Marketing and the deputy dean of the Marshall School of Business at the University of Southern California. He is also the immediate past editor of theJournal of Marketing. His research has examined a wide range of issues, including marketing strategy, the analysis of markets, consumer information search and decision making, effectiveness of marketing communications, and methodological approaches to the analysis of marketing data. Paul A. Pavlou is a Ph.D. candidate of information systems at the Marshall School of Business at the University of Southern California. His research focuses on business-to-business and business-to-consumer electronic commerce, new product development, institutional trust, interactive marketing, communications, and e-government. He has more than 25 publications in journals, books, and refereed conference proceedings. His research has appeared (or scheduled to appear) inMIS Quarterly, Electronic Markets, International Journal of Electronic Commerce, Journal of Strategic Information Systems, Journal of Logistics Information Management, andJournal of Interactive Advertising, among others. He has recently won the Best Interactive Paper Award at the 2002 Academy of Management Conference.     

Foreign direct investment in vertically related markets

We study an MNE's choice of FDI mode in a vertically related market with local input sourcing. We show how the market's vertical structure and trading features affect this choice. An MNE's incentives to expand through cross-border acquisition rather than through greenfield investment are stronger in markets with higher upstream bargaining power, upstream concentration and unobservable contract terms. The opposite holds in markets in which wholesale price contracts, instead of two-part tariffs, are used. Our welfare analysis suggests that the host country should not always welcome FDI and should discourage FDI through acquisition.     

How elections affect fiscal policy and growth: revisiting the mechanism

This paper reconsiders the popular result that the lower is the probability of reelection, the greater is the incentive of incumbent politicians to choose short-sighted, inefficient policies. The set-up is a general equilibrium model of economic growth, in which fiscal policy is endogenously chosen under electoral uncertainty. Political parties can value possible economic benefits differently depending on whether they are in or out of power, and—by contrast with the literature—the relevant preference coefficient is a choice variable rather than an exogenous taste parameter. The main result is that, when political parties choose both economic policy instruments and preference coefficients, the fundamental reason for short-sighted policy is the extra rents from being in power per se.     

The social cost of rent seeking in Europe

Direct measurement of the social cost of rent seeking is impeded by non-observable and non-reported activities. We use a dynamic stochastic general equilibrium model to compute the social cost of rent seeking in Europe. Our estimate is based on competition among interest groups for privileges provided by governments, including income transfers, subsidies, and preferential tax treatment. The model, which is calibrated to the euro area as a whole and also to individual euro member countries for 1980–2003, performs well vis-à-vis the data. We find that significant proportions of GDP are extracted as rents available to be sought by rent seekers.