Certifiable Pre‐Play Communication: Full Disclosure

This article asks when communication with certifiable information leads to complete information revelation. We consider Bayesian games augmented by a pre‐play communication phase in which announcements are made publicly. We first characterize the augmented games in which there exists a fully revealing sequential equilibrium with extremal beliefs (i.e., any deviation is attributed to a single type of the deviator). Next, we define a class of games for which existence of a fully revealing equilibrium is equivalent to a richness property of the evidence structure. This characterization enables us to provide different sets of sufficient conditions for full information disclosure that encompass and extend all known results in the literature, and are easily applicable. We use these conditions to obtain new insights in games with strategic complementarities, voting with deliberation, and persuasion games with multidimensional types.     

Optimal Inventory Control with Retail Pre‐Packs

A pre‐pack is a collection of items used in retail distribution. By grouping multiple units of one or more stock keeping units (SKU), distribution and handling costs can be reduced; however, ordering flexibility at the retail outlet is limited. This paper studies an inventory system at a retail level where both pre‐packs and individual items (at additional handling cost) can be ordered. For a single‐SKU, single‐period problem, we show that the optimal policy is to order into a “band” with as few individual units as possible. For the multi‐period problem with modular demand, the band policy is still optimal, and the steady‐state distribution of the target inventory position possesses a semi‐uniform structure, which greatly facilitates the computation of optimal policies and approximations under general demand. For the multi‐SKU case, the optimal policy has a generalized band structure. Our numerical results show that pre‐pack use is beneficial when facing stable and complementary demands, and substantial handling savings at the distribution center. The cost premium of using simple policies, such as strict base‐stock and batch‐ordering (pre‐packs only), can be substantial for medium parameter ranges.     

Pre‐Orders for New To‐be‐Released Products Considering Consumer Loss Aversion

Advance selling through pre‐orders is a strategy to transfer inventory risk from a retailer to consumers. A newsvendor retailer can have three strategies to choose from: no advance selling allowed (NAS), moderate advance selling with a moderate discount for pre‐orders (MAS), and deep advance selling with a deep discount for pre‐orders (DAS). This research studies how a retailer could design an advance selling strategy to maximize her own profits. We find some interesting results. For example, there exist two thresholds for the selling season profit margin and two thresholds for consumer's expected valuation. For products with higher profit margin than the high threshold on profit margin, a retailer should always use DAS. For products with medium profit margin within the two thresholds, a retailer should adopt MAS if consumer's expected valuation is lower than the high threshold and use DAS otherwise. For products with lower profit margin than the low threshold, a retailer should use NAS, DAS, or MAS, respectively, if consumer's expected valuation is lower than the low threshold, higher than the high threshold, or between the two thresholds, respectively. Through sensitivity analyses, we also show the effects of multiple consumer characteristics on a retailer's optimal advance selling strategy.     

Labour‐market Institutions and Macroeconomic Shocks

Abstract. Macroeconomic shocks and labour‐market institutions jointly determine employment growth and economic performance. The effect of shocks depends on the nature of these institutions and the effect of institutional change depends on the macroeconomic environment. It follows that a given set of institutions may be appropriate in one epoch and not in another. We derive a dynamic model of labour demand in which the effect of firing costs on labour demand depends on the macroeconomic environment: when the level of macroeconomic activity is expected to drop and/or the trend rate of productivity growth is small, a rise in firing costs affects mainly (and adversely) the hiring decision and not the layoff decision. This makes firing costs harmful to employment when it may appear most appropriate. In contrast, firing costs can raise employment during periods of high growth and positive shocks. Our hypothesis is supported by empirical results using OECD data.     

A Resource‐Process Framework of New Service Development

Motivated by the increasing attention given to the operational importance of developing new services, this paper offers a theoretical framework that integrates both process‐ and resource‐oriented perspectives of new service development (NSD) by defining and organizing 45 practice constructs for NSD‐related practices and activities that occur in contemporary service firms. We employ a rigorous procedure whereby both quantitative and qualitative data were gathered through multiple rounds of interviews and card‐sorting exercises with senior service managers. This iterative refinement process helps ensure that the construct domains and definitions are consistent and that they are applicable across multiple service sectors. A primary contribution of this research is to provide precise operational definitions of theoretically important NSD practice constructs. Importantly, this study expands on the NSD literature by including both resource‐ and process‐centric perspectives within a single framework. A second contribution is to illustrate a general methodology for developing clear, concise, and consistent construct definitions that may be generally useful for production and operations management scholars interested in new construct development for emerging areas. Empirical results suggest that the resource‐process framework can help guide and organize future research on, and provide insight into, a more comprehensive view of new service development.     

Informal Institutions and Internet-based Equity Crowdfunding

Equity-based crowdfunding is emerging as an increasingly important source of entrepreneurial financing. This paper examines the effects of informal institutions on entrepreneurs' ability and willingness to engage in efforts to raise equity crowdfunding. It also investigates how informal institutions are linked to investors' response to ECF. Also reviewed are the differences in the effects of informal institutions on equity crowdfunding vis-à-vis other forms of crowdfunding. The paper also delves into factors that are likely to lead to the development of favorable informal institutions from the standpoint of equity crowdfunding. It utilizes inductive theory-building approach.     

Concerning Workload Control and Order Release: The Pre‐Shop Pool Sequencing Decision

Every production planning concept that incorporates controlled order release will initially withhold jobs from the shop floor and create a pre‐shop pool. Order release is a key component of the Workload Control concept that aims to maintain work‐in‐process within limits while ensuring due dates are met. Order release includes two decisions: (i) a sequencing decision that establishes the order in which jobs are considered for release; and, (ii) a selection decision that determines the criteria for choosing jobs for release. While selection has received much research attention, sequencing has been largely neglected. Using simulation, this study uncovers the potential for performance improvement in the sequencing decision and improves our understanding of how order release methods should be designed. Although most prior studies apply time‐oriented sequencing rules and load‐oriented selection rules, analysis reveals that load balancing considerations should also be incorporated in the sequencing decision. But an exclusive focus on load balancing is shown to increase mean tardiness and, paradoxically, require high workloads. A new sequencing rule is developed that only balances loads when multiple orders become urgent. It avoids high mean tardiness and allows the shop to operate at a low workload level. At the same time, the percentage tardy is reduced by up to 50% compared to a purely time‐oriented rule. The findings have implications not only for Workload Control but for any concept that features order release control, such as ConWIP and Drum‐Buffer‐Rope.     

Robust Estimation and Inference for Jumps in Noisy High Frequency Data: A Local‐to‐Continuity Theory for the Pre‐Averaging Method

We develop an asymptotic theory for the pre‐averaging estimator when asset price jumps are weakly identified, here modeled as local to zero. The theory unifies the conventional asymptotic theory for continuous and discontinuous semimartingales as two polar cases with a continuum of local asymptotics, and explains the breakdown of the conventional procedures under weak identification. We propose simple bias‐corrected estimators for jump power variations, and construct robust confidence sets with valid asymptotic size in a uniform sense. The method is also robust to certain forms of microstructure noise.     

Subnational Institutions and Location Choice of Emerging Market Firms

I examine how subnational institutions of emerging markets affect the location choice of emerging market firms. I argue that the weak institutions in emerging markets push firms to acquire the skills needed for survival in unfavorable institutional environments. When they start their international venturing, such knowledge, skills, and capabilities will become their unique advantage, which makes them more resilient to red tape, nepotism, and corruption in the host countries. Using a sample of 143 outward FDI events of Chinese multinationals, I test the relationship between subnational institutions at home and firm propensity to enter a target market with weak institutional systems and found robust empirical support for the use of different estimation strategies. Further, my results demonstrate that the effect of subnational institutions at home on location choice is more pronounced in private enterprises compared to state-owned enterprises. This study reveals the importance of home country effects in location choice research and tests empirically the existence of institutional advantage.     

Examining the Impact of Pre‐Implementation Expectations on Post‐Implementation Use of Enterprise Systems: A Longitudinal Study

This article builds upon the technology acceptance model and theories of technology sensemaking to explore pre‐enterprise system adoption expectations and post‐enterprise system adoption outcomes in a longitudinal setting. Building on the exploitation and exploration paradigm, we propose that task productivity and task innovation expectations are the key drivers of users’ pre‐adoption enterprise system usage intention. Further, we argue that the enterprise system facilitates generation of a common knowledge base that may encourage a more integrated organizational culture and promote shared understanding among employees. Considering the distinction between mandatory and voluntary contexts, we propose that user acceptance of the enterprise system at the pre‐ and post‐adoption stages will mediate these relationships in a mandatory context. The results show that the influence of pre‐adoption expectations regarding task productivity and task innovation on intention to use an enterprise system is mediated by user acceptance of the enterprise system. Intention to use an enterprise system is positively related to actual use. At the post‐adoption stage, the influence of actual use on shared understanding is mediated by user acceptance of an enterprise system and enterprise system use has a direct negative impact on task efficiency in the initial period after implementation. Overall, the results highlight that user acceptance at both pre‐ and post‐adoption stages are critical factors when usage is mandatory. These findings suggest a number of important implications for research and for managerial action.     

Institutions and the Diversity and Prevalence of Multinationals’ Knowledge‐Augmenting Subsidiaries

Multinational corporations (MNCs) increasingly seek to gain access to, and exploit, locationally specific sources of advanced knowledge and technological capabilities, creating a need to explain (1) the diversity among these facilities and (2) how institutions influence MNCs’ abilities to invest in different subsidiary types. Extending debates on firms’ knowledge‐augmenting activities, the authors integrate institutions into their analytical framework to a greater extent than previous work has done. Moreover, existing contributions provide typologies of R&D subsidiaries. In contrast, the authors focus on a particular subset of subsidiaries, knowledge‐augmenting ones, and put forward a theory to explain their variety and their prevalence, enabling them to identify previously neglected subsidiary types that have important managerial and policy implications. By downplaying the diversity of these subsidiaries, existing work has not been able to capture the full range of managerial challenges as well as the costs and benefits of different subsidiary types to host countries. The authors, therefore, problematize firms’ abilities to gain access to foreign knowledge‐generating assets, highlight the importance of institutional environments, provide policy recommendations and identify areas for future research.     

Employment‐protecting Labour Market Institutions and Inward Foreign Direct Investments

Abstract. This paper proposes labour market institutional arrangements as a strategic device to induce or deter export‐substituting inward foreign direct investments (FDI) — in either instance protecting domestic employment. In a union‐oligopoly context it is shown that, if the FDI‐associated unit costs (FC) are not high enough, then employment‐neutral (‐enhancing) inward FDI will emerge in equilibrium if the domestic wage setting is credibly centralized and the unemployment benefit is sufficiently high (low), each instance arising for a different range of — intermediate — FC values. If however the FC values are sufficiently high, then the centralized structure of wage setting along with a low enough unemployment benefit will deter employment‐reducing inward FDI.     

Supply Chains in Sub‐Saharan Africa: A Decision Support System for Small‐Scale Seed Entrepreneurs*

It is necessary to infuse a consistent supply of improved seed varieties into local sub‐Saharan African crop production to improve low crop yields. The best distribution channel for the improved seed varieties may be small‐scale commercial seed companies, but local entrepreneurs struggle to determine whether such businesses are viable. Using a multi‐echelon supply chain approach, a decision support system (DSS) was designed to help African seed entrepreneurs make informed decisions about small‐scale seed chain businesses. Specifically, entrepreneurs make decisions about where to locate seed enterprises, with which farmers to contract, and where to store seed. Optimization and simulation modeling are used to evaluate infrastructure variables such as distance, transportation cost, and storage loss and cost in three development level areas. Currently, the decision tool is used in Mozambique, Malawi, Kenya, and Tanzania. The model has supported the start‐up of at least 17 small seed companies that are now introducing improved seed varieties into villages and farms. The DSS applies decision science research in a humanitarian application and offers important managerial implications about supply chain infrastructure to nongovernmental organizations and humanitarian groups. Such applications are vital as groups such as USAID, the Gates Foundation, and the International Crops Research Institute for the Semi‐Arid Tropics (ICRISAT) continue to move toward micro‐enterprise, value chain, and market‐oriented development programs.     

Financial Reporting,Private Disclosure and the Corporate Governance Role of Financial Institutions

This paper explores how large UK financial institutions (FIs) pursued a private corporate governance agenda with their portfolio companies. It also investigates the role of financial reporting in private and public corporate governance. The case financial institutions argued that the limited quality of public information, especially in financial reports, was a major constraint on their ability to act in fund management and corporate governance roles. However, the financial reporting cycle determined a private institutional and company meeting cycle and this created opportunities for private information collection and for governance influence by FIs. In addition, the perceived limitations of public governance mechanisms such as voting encouraged private governance approaches. As a result, the case financial institutions had the incentive and the means to improve the quality of their sources of corporate information and to obtain a competitive edge over other financial institutions and the market through their direct contact with companies. Despite the limitations of public information, the paper reveals how public disclosure in financial statements and the financial reporting cycle played a central role in corporate governance. Public sources of information were combined with private sources to create a financial institutional knowledge advantage. The institutions used this knowledge to diagnose problem areas in strategy, management quality, and the effectiveness of the board, and their impact on financial performance. The financial reporting cycle meant that the quasi insider financial institution had the access opportunity and the joint public/private insight to influence companies across a wide corporate governance agenda and in a range of corporate circumstances. The case institutions exploited these private access and knowledge advantages for investment purposes and for Cadbury style corporate governance purposes. Thus, the private governance process was critically dependent on the FI knowledge advantage, which in turn relied on both financial reports and private disclosure. This wide ranging governance behaviour by institutions corresponds to recommendations subsequently made by the Hampel report in 1998 concerning UK corporate governance. The paper ends by exploring how the private institutional and company meeting agenda can suggest new directions for financial reporting and public disclosure and how this can further improve public and private corporate governance.     

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.     

Human Resource Development in Sub-Saharan Africa

The need for skills development and training in Sub-Saharan Africa is increasing in an area where unstable economies and high unemployment create challenges on many levels. Sub-Saharan Africa is faced with great poverty, skills migration, and HIV/AIDS, which are depleting the region of skilled workers in their prime working years. The region is facing numerous challenges in the development of skills and the ability to make use of the available human resources. It can be argued that the Sub-Saharan African region needs to increase the skilled labour pool and to develop communities. Perhaps most importantly, there is an urgent need for the region to face the impact of globalization on its own terms. This involves the fusion of African philosophy and management styles with the traditional Western theories with human resource development (HRD) strategies and policies that will be suitable for the developing economies in the region.     

A necessary dialogue: a South African case study exploring the role of national HRD in HIV/AIDS non-government organizations

This article makes the case for a coordinated and multi-faceted national level response to the HIV/AIDS crisis in South Africa from the field of human resource development (HRD), arguing that national policy debate on this issue must include the development of human resources in HIV/AIDS non-governmental organizations (NGOs). An exploration of potential connections between HIV/AIDS and HRD was conducted with a qualitative case study in Port Elizabeth, South Africa. Through this study, four major thematic categories emerged in connection to the work of NGOs involved in the management of HIV/AIDS, government policy, and the emerging theory and practice of national human resource development (NHRD). In addition, findings pointed to the need for HRD research to be conducted in HIV/AIDS related NGOs given their front-line roles in both policy and practice. Initial suggestions for dialogue between NGOs involved with managing HIV/AIDS and the HRD research and practice community are made along with recommendations for stronger linkages between NHRD and HIV/AIDs.     

Context‐Specific,Scenario‐Based Risk Scales

Reacting to an emergency requires quick decisions under stressful and dynamic conditions. To react effectively, responders need to know the right actions to take given the risks posed by the emergency. While existing research on risk scales focuses primarily on decision making in static environments with known risks, these scales may be inappropriate for conditions where the decision maker's time and mental resources are limited and may be infeasible if the actual risk probabilities are unknown. In this article, we propose a method to develop context‐specific, scenario‐based risk scales designed for emergency response training. Emergency scenarios are used as scale points, reducing our dependence on known probabilities; these are drawn from the targeted emergency context, reducing the mental resources required to interpret the scale. The scale is developed by asking trainers/trainees to rank order a range of risk scenarios and then aggregating these orderings using a Kemeny ranking. We propose measures to assess this aggregated scale's internal consistency, reliability, and validity, and we discuss how to use the scale effectively. We demonstrate our process by developing a risk scale for subsurface coal mine emergencies and test the reliability of the scale by repeating the process, with some methodological variations, several months later.     

基于双层网络的第三方支付机构与商业银行竞合演化机理研究

本文以中国第三方支付机构和商业银行为研究对象,借鉴演化博弈论思想和双层网络演化博弈仿真方法,剖析两类企业竞合互动的演化规律以及相关因素对演化稳定策略的影响。研究发现,第三方支付机构与商业银行竞合的演化稳定策略存在不确定性,合作收益的提升、合作成本的降低、违约惩罚的提高以及利益分配的合理性有助于提高两类企业的合作水平,推动两群体向合作主导演化。细化研究发现,两类企业体现出显著的异质性,第三方支付机构对相关因素的变化更为敏感,对利益的要求更低。同时各群体内部收益差距明显,实力较强的大型第三方支付机构和商业银行能够获得较高的合作收益和较多的合作机会,而中小第三方支付机构和商业银行难以从竞合中获得理想收益。