The Market Provision of Management Services, Information Asymmetries and Service Quality—Some Market Solutions: an Empirical Example

This article examines the problems of information asymmetry associated with the market provision of managerial services. Such problems are heightened by those characteristics which differentiate services from goods. Two unique, and central, characteristics of services, are intangibility and perishability. These create special problems for the market provision of services. In particular they make for difficulties in assessing quality; whereas the producer may know product quality, the buyer often does not. The asymmetry between sellers and buyers is of two types: Adverse selection and moral hazard. Adverse selection occurs when the buyer cannot observe the relevant characteristics of the seller or the conditions under which they work. The problem of moral hazard is the buyer's inability to observe the action taken by the sellers. If these difficulties are not overcome, the market could collapse as companies withdraw and internalize service provision. However, each market has a number of in-built mechanisms which remedy the harmful effects associated with information-related problems. The institutional arrangements which predominate in particular markets are dependent upon the trust-producing mechanisms within those markets. Consequently, market responses to information asymmetries are far from uniform. The argument is illustrated using the example of the executive recruitment industry. In this respect the paper is a highly focused study of those mechanisms which overcome information asymmetries in one service market.     

The Impact of Question and Respondent Characteristics on Comprehension and Mapping Difficulties

Behavior coding is one technique researchers use to detect problemsin survey questions, but it has been primarily explored as apractical tool rather than a source of insight into the theoreticalunderstanding of the cognitive processes by which respondentsanswer survey questions. The latter is the focus of the currentinvestigation. Using data from a large study in which face-to-faceinterviews were taped and extensive behavior coding was done,we tested whether sets of respondent behavior codes could beused to distinguish respondent difficulties with comprehensionof the question from difficulties associated with mapping ajudgment onto the response format provided, and whether characteristicsof the survey questions and respondents could be used to predictwhen and for whom such difficulties would occur. Sets of behaviorcodes were identified that reflected comprehension and mappingdifficulties, and these two types of difficulties were associatedwith different question and respondent characteristics. Thisevidence suggests that behavior coding shows promise as a toolfor researchers studying the cognitive processes involved inanswering survey questions.     

Goodness‐of‐fit methods for matched case‐control studies

The authors propose graphical and numerical methods for checking the adequacy of the logistic regression model for matched case‐control data. Their approach is based on the cumulative sum of residuals over the covariate or linear predictor. Under the assumed model, the cumulative residual process converges weakly to a centered Gaussian limit whose distribution can be approximated via computer simulation. The observed cumulative residual pattern can then be compared both visually and analytically to a certain number of simulated realizations of the approximate limiting process under the null hypothesis. The proposed techniques allow one to check the functional form of each covariate, the logistic link function as well as the overall model adequacy. The authors assess the performance of the proposed methods through simulation studies and illustrate them using data from a cardiovascular study.     

Domains of convergence for the EM algorithm: a cautionary tale in a location estimation problem

The EM algorithm is a popular method for maximizing a likelihood in the presence of incomplete data. When the likelihood has multiple local maxima, the parameter space can be partitioned into domains of convergence, one for each local maximum. In this paper we investigate these domains for the location family generated by the t-distribution. We show that, perhaps somewhat surprisingly, these domains need not be connected sets. As an extreme case we give an example of a domain which consists of an infinite union of disjoint open intervals. Thus the convergence behaviour of the EM algorithm can be quite sensitive to the starting point.     

Employment growth in high-tech new ventures

We specify and estimate a model of the early employment growth of technology-driven new ventures. Our estimated model is derived from labor demand theory. A data set of 100 German firms is used to conduct this analysis. The study’s findings support the relevance of the theory as applied to these nascent firms. Employment growth is significantly enhanced in ventures exhibiting high profits, experienced founders, formal information processes, and outsourced product distribution. Our findings also confirm aspects of Penrose’s theory of firm growth suggesting that transactions costs associated with larger founder teams may inhibit employment growth.     

TOWARD A SOCIOLOGY OF CULT FILMS: Reading Rocky Horror

This article provides a sociological reading of cult films, in particular, The Rocky Horror Picture Show. Cult films are secular documents, celebrated as sacred texts by audiences and used as shared foci to collectively create rituals and belief systems. They differ from popular re-releases, fad films, films with cult qualities, and critical cult films in that they involve typical people in atypical situations, sympathetic deviance, challenges to traditional authority, reflections of societal strains, and paradoxical and interpretable resolutions. Examination of the Rocky Horror text and the cult activities that occur during its viewing, reveal it as a paradoxical indictment and validation of traditional societal arrangements.     

Culture, Cosmopolitanism, and Risk Management

Most cultural approaches to risk management deal with the connections between the forms of social relations within groups and the risk concerns of those groups. According to these theories, a certain limited set of different relational forms (usually three, four, or five) lead to specific, different and conflicting, risk concerns. In contrast to these theories, cosmopolitanism is an approach to culture that focuses, not on forms of sociality, but on changes among forms—expansions and contractions in the inclusivity of forms and movement by persons from one form of sociality to another. Relative to other cultural theories, cosmopolitanism thus is much more concerned with the solution of risk management problems than with their origins. Cosmopolitanism can be thought of as a cultural continuum, with cosmopolitanism at one end and pluralism at the other. Cosmopolitan persons are more open to cultural change—and thus the solution of risk management problems. In this article, we outline our new theory of cosmopolitanism, describe a method for measuring it and present an experimental study that tests some implications of the theory. Results from the study support the theory by showing that, compared to pluralistic respondents, cosmopolitan respondents are more inclusive in their risk management judgments—that is, they express equal concern for a local and a national issue, whereas the pluralistic respondents express greater concern in the local case. We discuss the risk management implications of a cosmopolitan approach to culture.