The Impact of Manufacturers' Wholesale Prices on a Retailer's Shelf‐Space and Pricing Decisions*

This article examines shelf‐space allocation and pricing decisions in the marketing channel as the results of a static game played à la Stackelberg between two manufacturers of competing brands and one retailer. The competing manufacturers act as leaders that play a simultaneous and noncooperative game. They fix their transfer prices by taking into account the shelf‐space allocation and price‐markup decisions of their common exclusive dealer. The results indicate that the wholesale prices of brands are strongly linked to their share of the shelf. The main results of our numerical simulations may be summarized as follows: first, the lower the unit cost and/or the greater the price elasticity, the greater the shelf space allocated to that brand. Second, the higher the shelf‐space elasticity, the lower are the wholesale prices and the profits of all channel members.     

Understanding Drivers of Risk‐Adjusted Performance for Service Firms with International Operations*

This article investigates whether international operations of service firms increase performance while reducing risk. The article draws on a longitudinal dataset of 584 internationally operating service firms from the United States. Analysis indicates that international diversification is negatively related to risk‐adjusted performance. However, it is established that international diversification interacts with internationalization and positively influences risk‐adjusted performance. This finding offers significant promise for firms, as it indicates that international operations (if managed well), through exposure to varied foreign markets coupled with adequate global scope, can lead to firms’ increased risk‐adjusted performance. The results provide a mechanism for decision‐makers to better understand international operations of service firms and present a strategy for achieving success in international markets by effectively managing two important levers: internationalization and international market diversification.     

Customer Learning Processes,Strategy Selection,and Performance in Business‐to‐Business Service Firms*

Learning about customers takes place through relevant dialogues with those customers, also known as customer relationship management (CRM). As relationships develop, information about the customer is gathered in the firm's customer information systems (CIS): the content, processes, and assets associated with gathering and moving customer information throughout the firm. This research develops a measure of CIS management capabilities based on learning organization theory and measured by the ability to get, store, move, and use information throughout the business unit. This measure is then used to analyze customer learning processes and associated performance in the context of marketing strategic decision making. This study of 209 business services firms finds that generic marketing strategy positioning (low‐cost and differentiation) and the marketing tactics of personalization and customization are related to CIS development. Customer information systems development in turn is associated with higher levels of customer‐based performance, which in turn is associated with increased business growth. Since the strongest association with customer‐based performance is strategy selection, the long‐term benefits of the knowledge gained from the CIS may be in the ability to assist in measuring customer‐based performance, rather than in the ability to immediately contribute to performance. Finally, for these firms, customization and personalization are not directly associated with performance and thus may not be necessary to support every firm's marketing strategy.     

Keyword Auctions,Unit‐Price Contracts,and the Role of Commitment

Motivated by the enormous growth of keyword advertising, this paper explores the design of performance‐based unit‐price contract auctions, in which bidders bid their unit prices and the winner is chosen based on both their bids and performance levels. The previous literature on unit‐price contract auctions usually considers a static case where bidders' performance levels are fixed. This paper studies a dynamic setting in which bidders with a low performance level can improve their performance at a certain cost. We examine the effect of the performance‐based allocation on overall bidder performance, auction efficiency, and the auctioneer's revenue, and derive the revenue‐maximizing and efficient policies accordingly. Moreover, the possible upgrade in bidders' performance level gives the auctioneer an incentive to modify the auction rules over time, as is confirmed by the practice of Yahoo! and Google. We thus compare the auctioneer's revenue‐maximizing policies when she is fully committed to the auction rule and when she is not, and show that the auctioneer should give less preferential treatment to low‐performance bidders when she is fully committed.     

The Effect of Team Leader Characteristics on Learning,Knowledge Application,and Performance of Cross‐Functional New Product Development Teams

This study examines how leadership characteristics in new product development teams affect the learning, knowledge application, and subsequently the performance of these teams. Using data from a study of 229 members from 52 high‐tech new product projects, we empirically demonstrate that team learning has a strong positive effect on the innovativeness and speed to market of the new products. Moreover, a democratic leadership style, initiation of goal structure by the team leader, and his or her position within the organization were positively related to team learning. Managerial implications of these results are discussed.     

Precision of Information,Sensational Information,and Self‐Efficacy Information as Message‐Level Variables Affecting Risk Perceptions

Studies that investigate how the mass media cover risk issues often assume that certain characteristics of content are related to specific risk perceptions and behavioral intentions. However, these relationships have seldom been empirically assessed. This study tests the influence of three message‐level media variables—risk precision information, sensational information, and self‐efficacy information—on perceptions of risk, individual worry, and behavioral intentions toward a pervasive health risk. Results suggest that more precise risk information leads to increased risk perceptions and that the effect of sensational information is moderated by risk precision information. Greater self‐efficacy information is associated with greater intention to change behavior, but none of the variables influence individual worry. The results provide a quantitative understanding of how specific characteristics of informational media content can influence individuals’ responses to health threats of a global and uncertain nature.     

The Dynamics of Pre‐ and Post‐purchase Service and Consumer Evaluation of Online Retailers: A Comparative Analysis of Dissonance and Disconfirmation Models*

This article explores the theoretical underpinnings of the dissonance framework in online consumer satisfaction formation process. Specifically, we suggest that any discrepancy between pre‐ and post‐purchase service performance would help determine consumers’ evaluations of online vendors. Drawing upon cognitive dissonance theory, a conceptual model is developed and tested in two different studies (preliminary and main studies). Using data from 191 college students collected longitudinally, the preliminary study demonstrates the validity and reliability of the measurements. Using a comparative analysis, the main study then tests our conceptual model as well as various competing models, including the expectation–confirmation model, with a sample of 292 online consumers. The results in both studies support our main prediction that the service encountered in different stages establishes dissonance. Specifically, we find that dissonance explains online consumers’ satisfaction process to a substantial extent, as compared with disconfirmation under the same conditions in online retailers. This study contributes to providing an alternative yet substantial approach for expectation–confirmation theory, reflecting the overarching nature of online shopping.     

Information Technology and Process Performance: An Empirical Investigation of the Interaction Between IT and Non‐IT Resources*

Drawing on the resource‐based view, we propose a configurational perspective of how information technology (IT) assets and capabilities affect firm performance. Our premise is that IT assets and IT managerial capabilities are components in organizational design, and as such, their impact can only be understood by taking into consideration the interactions between those IT assets and capabilities and other non‐IT components. We develop and test a model that assesses the impact of explicit and tacit IT resources by examining their interactions with two non‐IT resources (open communication and business work practices). Our analysis of data collected from a sample of firms in the third‐party logistics industry supports the proposed configurational perspective, showing that IT resources can either enhance (complement) or suppress (by substituting for) the effects of non‐IT resources on process performance. More specifically, we find evidence of complementarities between shared business–IT knowledge and business work practice and between the scope of IT applications and an open communication culture in affecting the performance of the customer‐service process; but there is evidence of substitutability between shared knowledge and open communications. For decision making, our results reinforce the need to account for all dimensions of possible interaction between IT and non‐IT resources when evaluating IT investments.     

Complementary Drivers of New Product Development Performance: Cross‐Functional Coordination,Information System Capability,and Intelligence Quality

Coordination efforts that access and align relevant cross‐functional expertise are regarded as an essential element of innovation success. In recent years, these efforts have been further augmented through complementary investments in information systems, which provide the technological platforms for information sharing and coordination across functional and organizational boundaries. Somewhat overlooked has been the critical mediating role of the intelligence gained through these efforts and capabilities. This study draws on the theory of complementarity to elaborate on the nature of this mediating concept. Theoretical predictions of the model are tested using instrument variable regression analysis of data collected from a sample of publicly traded US manufacturing firms. The findings suggest that the effects of both internal and external coordination on market intelligence and supply‐chain intelligence are moderated by the firm's information system capability. The effect of both types of intelligence quality on new product development performance was contingent with the effects being enhanced (attenuated) when the market conditions were dynamic (stable). The results are robust to common‐method bias, endogeneity concerns, and alternative estimation methods.     

Lower Risk Bounds and Properties of Confidence Sets for Ill‐Posed Estimation Problems with Applications to Spectral Density and Persistence Estimation,Unit Roots,and Estimation of Long Memory Parameters

Important estimation problems in econometrics like estimating the value of a spectral density at frequency zero, which appears in the econometrics literature in the guises of heteroskedasticity and autocorrelation consistent variance estimation and long run variance estimation, are shown to be “ill‐posed” estimation problems. A prototypical result obtained in the paper is that the minimax risk for estimating the value of the spectral density at frequency zero is infinite regardless of sample size, and that confidence sets are close to being uninformative. In this result the maximum risk is over commonly used specifications for the set of feasible data generating processes. The consequences for inference on unit roots and cointegration are discussed. Similar results for persistence estimation and estimation of the long memory parameter are given. All these results are obtained as special cases of a more general theory developed for abstract estimation problems, which readily also allows for the treatment of other ill‐posed estimation problems such as, e.g., nonparametric regression or density estimation.