Exchange Rate Volatility, Nominal Rigidities, and Persistent Deviations from PPP

It is shown how nominal exchange rate volatility can cause persistent deviations in the real exchange rate. The key to nominal rigidities is a capital market imperfection implying that agents cannot hedge perfectly against consumption risks. As a consequence, nominal changes have real effects by both affecting the ex post real purchasing power of savings and by affecting the ex ante incentives in savings and labor supply. The consequences of exogenous changes in the nominal exchange rate are considered in an OLG version of a two sector small open economy with competitive product and labor markets.J. Japan. Int. Econ.,December 1997,11(4), pp. 584–609. Department of Economics, University of Aarhus, 8000 Aarhus, Denmark.     

Elicitation using multiple price list formats

We examine the properties of a popular method for eliciting choices and values from experimental subjects, the multiple price list format. The main advantage of this format is that it is relatively transparent to subjects and provides simple incentives for truthful revelation. The main disadvantages are that it only elicits interval responses, and could be susceptible to framing effects. We consider extensions to address and evaluate these concerns. We conclude that although there are framing effects, they can be controlled for with a design that allows for them. We also find that the elicitation of risk attitudes is sensitive to procedures, subject pools, and the format of the multiple price list table, but that the qualitative findings that participants are generally risk averse is robust. The elicitation of discount rates appear less sensitive to details of the experimental design. Electronic Supplementary Material Supplementary material is available in the online version of this article at . JEL Classification C9, D81, D91 An erratum to this article is available at .     

Exploring Value‐Based Management Sophistication: The Role of Potential Economic Benefits and Institutional Influence

The complexity of value‐based management (VBM) is often not captured in empirical research. In particular, potential differences in the extent of VBM implementation are not considered. Firms are predominantly classified dichotomously into either VBM “adopters” or “non‐adopters.” In this study, we aim to fill this gap by introducing a framework to assess differences in the extent of VBM implementation (VBM‐sophistication) based on publicly available data. This approach enables us to study determinants of VBM‐sophistication based on a hand‐collected data set comprising 2,683 firm‐year observations from 16 European countries between 2005 and 2014. Specifically, we investigate (i) whether potential economic benefits associated with VBM implementation lead to a higher level of VBM‐sophistication, and (ii) if this relation is influenced by extra‐organizational institutions (e.g., industry norms). Our results indicate that companies exhibit higher VBM‐sophistication if certain firm characteristics that increase the potential economic benefits of VBM are present. Moreover, our study provides evidence that this effect is enhanced by extra‐organizational institutions that pressure and support firms in realizing the potential benefits of higher VBM‐sophistication.     

Cause-related marketing 2.0: Connection,collaboration and commitment

The article aims to explore and revise cause-related marketing (CRM) in light of an emerging concept of the market and the roles assigned to companies and consumers in marketing communication processes. Based on a dialogical reflexive approach to case studies, we take our point of departure in theoretically identifying key CRM constituents and their interrelations, and we show how current theories within CRM build upon axioms of a traditional firm-centric view on value creation and fail to meet the challenges of new market structures and relations. This tension of axioms provides a point of direction for introducing the Pepsi Refresh Project as a case illustration of an alternative CRM practice that redefines CRM from company-driven to community-driven – and points towards relocating CRM from an overt to a covert brand and marketing communication strategy. CRM becomes a joint value- and identity-constructing practice transforming consumer criticism into brand involvement and community commitment. By reflexively merging theoretical and case insights, the contribution of the article lies in the revisiting of existing CRM theories in the context of connected, critical and empowered consumers and the subsequent outlining of what we suggest to be CRM 2.0.     

A relationship strategy perspective on relationship portfolios: Linking customer profitability,commitment, and growth potential to relationship strategy

The paper develops a three-dimensional portfolio model for business relationships which distinguishes among six different categories. Based on assessments of customer profitability, customer commitment, and growth potential, the positioning of a given customer relationship in the portfolio allows managers to determine appropriate customer relationship strategies and appropriate performance indicators. Results from applying the portfolio model are reported and managerial implications and future research are discussed.     

The Moderating Influence of Broad‐Scope Trust on Customer–Seller Relationships

Trust relates not only to customer trust in individual companies (i.e., narrow‐scope trust) but also to the broader business context in which customer–seller relationships may develop (i.e., broad‐scope trust [BST]). Based on two surveys comprising 1155 bank consumers and 817 insurance consumers, respectively, this study investigates the moderating influence of BST on relationships between satisfaction, narrow‐scope trust, and loyalty and also examines the direct influence of BST on these variables. The results indicate that whereas BST negatively moderates relationships between satisfaction and narrow‐scope trust and between narrow‐scope trust and loyalty, BST positively moderates the relationship between satisfaction and loyalty. In addition, it is demonstrated that BST positively influences customer satisfaction and narrow‐scope trust. © 2012 Wiley Periodicals, Inc.     

Exchange Rate Pegs, Fiscal Policy and Credibility

In a fixed exchange rate regime, an exchange rate change can be a swift way to change the real exchange rate in the short run. Fiscal policy also affects relative prices, and fiscal policy response to various types of shocks can therefore be crucial for the credibility of an exchange rate peg. We develop a model within which fiscal policy plays a crucial role for ensuring the viability and thus credibility of an exchange rate peg. We use the insights of this model to take a closer look at Denmark, which has successfully pursued a fixed exchange rate policy since 1982.