The importance of consumer multihoming (joint purchases) for market performance: Mergers and entry in media markets

Consumer “multihoming” (watching two TV channels, or buying two news magazines) has surprisingly important effects on market equilibrium and performance in (two‐sided) media markets. We show this by introducing consumer multihoming and advertising finance into the classic circle model of product differentiation. When consumers multihome (attend more than one platform), media platforms can charge only incremental value prices to advertisers. Entry or merger leaves consumer prices unchanged under consumer multihoming, but leaves advertiser prices unchanged under single‐homing: Multihoming flips the side of the market on which platforms compete. In contrast to standard circle results, equilibrium product variety can be insufficient under multihoming.     

Lobbying as a potent political marketing tool for firm performance: A closer look

This study endeavors to enhance political marketing literature about the impact of lobbying on firm performance. Our sample is composed of 140 U.S. firms and spans the years 2007–2014 to encompass the 2007–2009 recession and the subsequent recovery period. Our findings indicate that lobbying expenses positively contribute to firm performance. Also, government contracts in both ways, dollar amount and number of government contracts, act as mediators between lobbying expenses and firm performance. In addition, organizational slack moderates the relationship between lobbying expenses and government contracts. The managerial implications suggest that lobbying expenses can be leveraged as a potent tool for firm performance. Firms with larger lobbying efforts acquired both, higher dollar amounts and a greater number of government contracts.     

The Impact of Institutional Differences on Derivatives Usage: a Comparative Study of US and Dutch Firms

This paper examines the influence of institutional differences on corporate risk management practices in the USA and the Netherlands. We compare results to surveys in each country using a strategy that corrects for differences over industry and size classes across the Dutch and US samples. We document several differences in the firms’ uses and attitudes towards derivatives and attempt to attribute them to the differences in the institutional environments between the USA and the Netherlands. We find that institutional differences appear to have an important impact on risk management practices and derivatives use across US and Dutch firms.     

Exchange rate exposure and foreign exchange derivatives: do ineffective hedgers modify future derivatives use?

Recent studies examining the relationship between stock returns and exchange rate changes have provided evidence that the exchange rate exposure of non-financial companies is reduced by the use of foreign exchange derivatives. Building on such research, this study investigates whether past ineffective derivative hedging contributes to explaining future derivatives use. To the extent that companies monitor the effectiveness of their currency risk management practices, past ineffective hedgers can be expected to modify their future use of foreign exchange derivatives accordingly. In our study of 94 non-financial US multinationals, we provide evidence that the change in derivatives use from 1996–1998 to 1998–2000 can be explained in part by the ineffective hedging of currency risk in 1996–1998, controlling for variables associated with theories of optimal hedging. Additional analyses confirm that such primary results are robust to firm size, the level of foreign operations, and the use of derivatives to partially hedge currency risk. Our results imply that as exchange markets and risk management practices change, the use of derivatives to manage exchange rate risk also changes. Our contribution to this field of study is that we find evidence that past ineffective hedgers tend to increase their future use of FXDs.     

Bank Monitoring and Environmental Risk

Abstract:  Loan announcement effects for 152 Canadian companies are examined to investigate the efficiency of monitoring by banks facing lender environmental liability. Market reaction to the announcement of bank debt to 'environmental' firms is more positive and significant than for 'non-environmental' firms and, for firms in industries with a higher likelihood of experiencing spill events, is more positive and significant, reinforcing earlier results that establish a relationship between specific loan/borrower characteristics and announcement period excess returns and providing further evidence on the 'uniqueness' of bank loans by demonstrating the superior ability of banks to monitor corporate borrowers exposed to environmental liability.     

The behavioral perspective model of purchase and consumption: From consumer theory to marketing practice

The Behavioral Perspective Model of purchase and consumption (BPM) portrays the rate at which consumer behaviors take place as a function of the relative openness of the setting in which they occur and the informational and hedonic reinforcement available in or promised by the setting. Each of eight combinations of contingencies based on these explanatory variables is uniquely related to a specific mode of observed consumer behavior. By providing an environmental perspective on consumer behavior, the model makes a critical contribution to the development of contemporary consumer research that frequently decontextualizes its subject matter. It also presents an innovative conceptualization of the nature of marketing strategies.     

Global instability in experimental general equilibrium: the Scarf example

Scarf (Int. Econ. Rev. 1 (1960) 157) proposed a model of dynamic adjustment in which the standard tatonnement price adjustment process orbits around, rather than converges to, the competitive equilibrium. Hirota (Int. Econ. Rev. 22 (1981) 461) characterized the price paths. We explore the predictions of Scarf's model in a non-tatonnement experimental double auction. The average transaction prices in each period do follow the path predicted by the Scarf and Hirota models. When the model predicts convergence the data converge; when the model predicts orbits, the data orbit in the direction predicted by the model. Moreover, we observe a weak tendency for prices within a period to follow the path predicted by the model.     

An interview with Rhonda Anderson. Interview by Connie R. Curran

Nurse executives working in a hospital system experience varied and challenging opportunities to enhance the quality of patient care as well as the success of their professional careers. In this interview, Rhonda Anderson, MPA, RN, CNAA, discusses the hospital system, the managed care environment, and the importance of developing nurse managers.