design and analysis of simulated consumer choice or allocation experiments an approach based on aggregate data the authors integrate concepts in conjoint analysis and discrete choice theory in econometrics to develop a new approach to the design and analysis of controlled consumer choice or resource allocat

utility covariances and context effects in conjoint mnp models experimental conjoint choice analysis is among the most frequently used methods for measuring and analyzing consumer preferences the data from such experiments have been typically analyzed with the multinomial logit mnl model however there are several problems associated with the standard mnl model because it is based on the assumption that the error terms of the underlying random utilities are independent across alternatives choice sets and subjects the multinomial probit model mnp is well known to alleviate this assumption of independence of the error terms accounting for covariances in utilities in modeling choice experiments with the mnp is important because variation of the coefficients in the choice model may occur due to context effects previous research has shown that subjects utilities for alternatives depend on the choice context that is the particular set of alternatives evaluated simonson and tversky s tradeoff contrast principle describes the effect of the choice context on attribute importance and patterns of choice they distinguish local contrast effects which are caused by the alternatives in the offered set only and background contrast effects which are due to the influence of alternatives previously considered in choice experiments these effects are hypothesized to cause correlations in the utilities of alternatives within and across choice sets respectively the purpose of this study is to develop an mnp model for conjoint choice experiments this model is important for a more detailed study of choice patterns in those experiments in developing the mnp model for conjoint choice experiments several hurdles need to be taken related to the identification of the model and to the prediction of holdout profiles to overcome those problems we propose a random coefficients rc model that assumes a multivariate normal distribution of the regression coefficients with a rank one factor structure on the covariance matrix of these regression coefficients the parameters in this covariance matrix can be used to identify which attributes and levels of attributes are potentional sources of dependencies between the alternatives and choice sets in a conjoint choice experiment we present several versions of this model moreover for each of these models we allow utilities to be either correlated or independent across choice sets the independent probit ip model is used as a benchmark given the dimensionality of the integrations involved in computing the choice probabilities the models are estimated with simulated likelihood where simulations are used to approximate the integrals involved in the choice probabilities we apply and compare the models in two conjoint choice experiments in both applications the random coefficients mnp model that allows choices in different choice sets to be correlated rc displays superior fit and predictive validity compared with all other models we hypothesize that the difference in fit occurs because the rc model accommodates correlations among choice sets that are caused by background contrast effects whereas the model that treats choice sets as independent irc accounts for local contrast effects only the irc model shows superior model fit compared with the ip model but its predictions are worse than those of the ip model we find differences in the importance of local and background contrast effects for choice sets containing different numbers of alternatives the background contrast effect may be stronger for smaller choice sets whereas the local contrast effect may be stronger for bigger choice sets we illustrate the differences in simulated market shares that are obtained from the rc irc and ip models in three hypothetical situations product modification product line extension and the introduction of a me too brand in all of those situations substantially different market shares are predicted by the three models which illustrates the extent to which erroneous predictions may be obtained from the misspecified irc and ip models

green market expansion by reducing information asymmetries evidence for labeled organic food products abstract we investigate how the provision of objective information about the environmental and health impact of organic labels by policy makers can influence the willingness to pay of consumers for labeled organic apples in flanders belgium using a stated choice experiment we initially find that flemish consumers are willing to pay a positive price premium of some 33 eurocent per kilogram for labeled organic apples after the provision of information on the actual environmental and health effects of organic apple production this price premium becomes even more pronounced and increases to 57 eurocent per kilogram using a conditional logit model with covariates and a mixed logit model we find evidence of preference heterogeneity also the effect of information provision is more pronounced for certain groups of consumers such as non vegetarians infrequent buyers of organic products and members of a nature protection organization as such this paper illustrates that there is a role for policy makers and csr producers in providing more accurate and reliable information about socially responsible production processes moreover it is important to take the observed preference heterogeneity into account and tailor policies to specific consumer groups

labor market returns to two and four year college the paper examines labor market returns to a two and four year college education analysis of the 1972 national longitudinal survey of youth observation that the average person who attended a two year college earned about 10 percent more than those without any college education comparison with the wages of those who attended a four year college education

sheepskin effects in the returns to education some previous discussions have dismissed screening theories of education partly on the ground that diploma years of education do not confer especially large earnings gains similarly most empirical research on earnings functions has assumed an absence of sheepskin effects we report evidence however of substantial and statistically significant sheepskin effects although this suggests that the previous dismissals of the screening hypothesis were premature our evidence of sheepskin effects is amenable to nonscreening interpretations also according to screening theories of education individuals with more schooling tend to earn more not because or at least not solely because schooling makes them more productive but rather because it credentiates them as more productive a frequently cited article by layard and psacharopoulos 1974 however dismissed the importance of the screening hypothesis on the grounds that several of its refutable predictions were not supported by available evidence one of these was the sheepskin prediction that wages will rise faster with extra years of education when the extra year also conveys a certificate after surveying a number of studies layard and psacharopoulous henceforth lp concluded that rates of return to dropouts are as high as to those who complete a course which refutes the sheepskin version of the screening hypothesis since publication of the lp paper an undergraduate labor economics textbook has cited lp s analysis of sheepskin effects as telling criticism of the screening hypothesis a prominent proponent of the screening hypothesis riley 1979 has accepted lp s summary of the empirical evidence but responded that some versions of the screening hypothesis do not imply sheepskin effects in the meantime the ongoing flood of empirical research on earnings functions typically has continued to treat the natural logarithm of the wage rate as a linear or occasionally quadratic function of years of education with no allowance for discontinuities in diploma years 2 the estimated rates of return used by lp were based on data that did not disaggregate dropouts earnings by how many years of school they had completed lp acknowledged we would have preferred to show the earnings gain associated with each year of the course including the year when it was successfully completed this note presents a reanalysis of sheepskin effects based on the type of data lp wished they had the results contain very strong evidence of sheepskin effects after all the next section describes our analysis and the following section summarizes and discusses our

estimation of consumer demand with stock out based substitution an application to vending machine products the occurrence of temporary stock outs at retail is common in frequently purchased product categories available empirical evidence suggests that when faced with stock outs consumers are often willing to buy substitute items an important implication of this consumer behavior is that observed sales of an item no longer provide a good measure of its core demand rate sales of items that stock out are right censored while sales of other items are inflated because of substitutions knowledge of the true demand rates and substitution rates is important for the retailer for a variety of category management decisions such as the ideal assortment to carry how much to stock of each item and how often to replenish the stock the estimated substitution rates can also be used to infer patterns of competition between items in the category in this paper we propose methods to estimate demand rates and substitution rates in such contexts we develop a model of customer arrivals and choice between goods that explicitly allows for possible product substitution and lost sales when a customer faces a stock out the model is developed in the context of retail vending an industry that accounts for a sizable part of the retail sales of many consumer products we consider the information set available from two kinds of inventory tracking systems in the best case scenario of a perpetual inventory system in which times of stock out occurrence and cumulative sales of all goods up to these times are observed we derive maximum likelihood estimates mles of the demand parameters and show that they are especially simple and intuitive however state of the art inventory systems in retail vend ing provide only periodic data i e data in which times of stock out occurrence are unobserved or missing for these data we show how the expectation maximization em algorithm can be employed to obtain the mles of the demand parameters by treating the stock out times as missing data we show an application of the model to daily sales and stocking data pooled across multiple beverage vending machines in a midwestern u s city the vending machines in the application carry identical assortments of six brands since the number of parameters to be estimated is too large given the available data we discuss possible restrictions of the consumer choice model to accomplish the estimation our results indicate that demand rates estimated naively by using observed sales rates are biased even for items that have very few occurrences of stock outs we also find significant differences among the substitution rates of the six brands the methods proposed in our paper can be modified to apply to many nonvending retail settings in which consumer choices are observed not their preferences and choices are constrained because of unavailability of items in the choice set one such context is in store grocery retailing where similar issues of information availability arise in this context an important issue that would need to be dealt with is changes in the retail environment caused by retail promotions

the investor specific price of renewable energy project risk a choice experiment with incumbent utilities and institutional investors abstract renewable energy investments in germany have recently soared trebling the output of wind and solar power generation in only ten years while incumbent utilities have lagged behind in terms of investment new entrants have significantly contributed to this growth existing literature has primarily focused on explaining the lethargy of incumbents former investments although there is a growing need to investigate recent investment drivers to secure the necessary power plant capacity at a moderate cost from incumbents and new entrants alike to close this gap a choice experiment involving 1 659 investment choices by 52 european professional investors was conducted in significant contrast to the case with altruistic investors this survey underlines the importance of using financial incentives to attract professional investors given full exposure to electricity price risk incumbent utilities would facilitate projects at a 3 04 risk premium whereas institutional investors demand 6 61 generally incumbent utilities and institutional investors are equally attracted by low risk projects however when risk increases institutional investors are more hesitant to become involved while incumbent utilities confidently navigate these higher risk projects

multinational parent companies influence over human resource decisions of affiliates u s firms in mexico this study provides empirical evidence for the relationship between the degree of influence u s parent companies have over the human resource decisions of their mexican affiliates and the affiliates resource dependencies on the parent company both wholly owned and joint venture affiliates are examined resource dependence was the factor most closely related to parent influence over affiliate human resource decisions the importance of an affiliate to a parent company the nationality of affiliate managers and the type of ownership arrangements were also found to affect parent influence but to lesser extents than resource dependencies

promotion signal proxy for a price cut evidence suggests that some consumers react to promotion signals without considering relative price information we adopt petty and cacioppo s elaboration likelihood model elm to explain this behavior in terms of the elm s peripheral route to persuasion in which the promotion signal is taken as a cue for a price cut experimental results show that low need for cognition individuals react to the simple presence of a promotion signal whether or not the price of the promoted brand is reduced but that high need for cognition individuals react to a promotion signal only when it is accompanied by a substantive price reduction

a probabilistic choice model for market segmentation and elasticity structure marketing scholars commonly characterize market structure by studying the patterns of substitution implied by brand switching though the approach is useful it typically ignores the destabilizing

bargaining power ownership and profitability of transnational corporations in developing countries as the bargaining power of the transnational corporations tncs in the sample increased relative to the bargaining power of the host country and as the desire of the tncs for a high level of equity ownership increased the percent equity ownership of the tncs in their subsidiaries increased the relationship between percent equity ownership and subsidiary success from the tncs viewpoint however was j shaped high and low levels of equity ownership were associated with high levels of success control of critical operational variables by the tnc was directly related to success

analyzing public preferences and increasing acceptability for the renewable portfolio standard in korea abstract in order to respond to the challenge of climate change similar to other countries korea has announced various policies to vitalize the development and uptake of renewable energy the renewable portfolio standard rps is the most striking example of a policy in this area this study employs a conjoint survey and bayesian mixed logit model to analyze consumer preferences for specific attributes of the rps policy it analyzes households marginal willingness to pay mwtp for the rps with specific attributes and simulates the degree of household acceptability of the policy through a scenario analysis comparison between costs and benefits of implementing the policy is also attempted by analyzing the households mwtp with the actual transition expense of rps implementation incurred by electricity supply companies the simulation results provide implications for improving rps policy implementation households consider the creation of new jobs as the most important policy attribute followed by increase in electricity prices damage to forests reduction in co 2 emissions and length of power outages moreover the korean household is willing to accept an increase of up to 1 39 in its electricity prices relative to 2012 and the median mwtp of each household for rps implementation is krw 734 99 month usd 0 67 month

decomposition of warm glow for multiple stakeholders stated choice valuation of shellfishery policy a monetary valuation study of marine management in the dutch wadden sea the largest natural area of the netherlands is presented the study is motivated by a conflict between shellfisheries and large populations of birds that forage on cockles different management scenarios are valued using multiple stakeholders namely dutch citizens local residents tourists policy makers and natural scientists a considerable difference in willingness to pay wtp between these groups is found in addition the influence of motivational profiles is examined estimates confirm the presence of two such motivations namely material and moral warm glow these allow for decomposition and correction of the wtp estimates

the choice theory approach to market research this paper surveys economic choice theory stressing developments that permit use of data from psychometric and conjoint experiments to produce market demand forecasts alternatives to the widely used multinomial logit model are summarized and a new method for estimating multinomial probits is described an integration of choice models with attitudinal scaling and perceptual mapping within a latent variable system is described estimation of such systems under either random effects or fixed effects descriptions of heterogeneity across individuals is discussed issues in the use of choice models to describe responses from conjoint experiments are presented new regression diagnostic tests for the consistency of multinomial logit representations are discussed

a model of stochastic variety seeking in this paper we propose and test a stochastic model of consumer choice that incorporates attribute based variety seeking our stochastic variety seeking model svs has nested within it a fixed variety seeking model a zero order model of choice and a first order pure variety model we compare the svs model to alternative models under stochastic variety seeking we examine the nature of the variety sought and provide a test of the satiation hypothesis unlike fixed variety seeking models our model allows variety seeking to vary in intensity and consistency over individuals as well as over purchase occasions we show that the model is equivalent to a random utility model with the features that the attributes of brands relative to those of the brand previously bought influence choice and the extent of variety seeking is random over choice occasions for a given individual the model permits a closed form solution to the conditional switching probabilities parameterized by variety seeking parameters and dependent on brand attributes we apply our model to individual choice data obtained from a field study specifically designed for the purpose at hand

are choice experiments incentive compatible a test with quality differentiated beef steaks this study compares hypothetical and nonhypothetical responses to choice experiment questions we test for hypothetical bias in a choice experiment involving beef ribeye steaks with differing quality attributes in general hypothetical responses predicted higher probabilities of purchasing beef steaks than nonhypothetical responses thus hypothetical choices overestimate total willingness to pay for beef steaks however marginal willingness to pay for a change in steak quality is in general not statistically different across hypothetical and actual payment settings

investigating heterogeneity in brand preferences in logit models for panel data in analyzing panel data the issue of heterogeneity across households is an important consideration if heterogeneity is present but is ignored in the analysis it will result in biased and inconsi

partner contributions as predictors of equity share in international joint ventures the type of expertise that a company contributes to a joint venture may affect the amount of equity that it owns this research observes the ownership patterns associated with four common combinations of partner expertise in international joint ventures the results rank company assets with respect to the contributor s ability to negotiate majority ownership in the original joint venture contract and that company s tendency to buy up equity from the partner later on

audience characteristics and bundling a hedonic analysis of magazine advertising rates abstract increasingly magazines are able to offer potential advertisers all their readers pure bundling only specific reader segments pure components pricing or a combination of the two mixed bundling using data on advertising rates and reader demographics the authors estimate the implicit prices of reader characteristics within a hedonic framework the results suggest that the magnitude of the price and revenue premiums earned by unbundling a magazine s readers can be substantial

extending the bargaining power model explaining bargaining outcomes among nations mnes and ngos participants in international bargaining include different types nation states mnes ngos and multilateral organizations and different numbers of these actors our theoretical contribution is to extend the bargaining power paradigm with a framework that models bargaining in this complex environment as a network the configuration of supports and constraints among all participating actors in the bargaining environment is captured in the structure of the network antecedents of an actor s bargaining influence in the network include the actor s basis of power network position bargaining outcome preferences and motivation to influence bargaining the network bargaining power nbp model uses network theory to build upon and integrate insights from previous literature in a way that allows us to simultaneously apply these different insights to explain bargaining outcomes these insights include effects of coalitions strategies of less powerful actors leveraging more powerful allies integration of international and domestic politics and applicability to mne related issues beyond fdi finally we illustrate nbp in a scenario of privatized utilities in the dominican republic in which the bargaining power outcome predicted by nbp differs from that of the canonical bargaining power perspective

the integration of subsidiary political activities in multinational corporations just as the competitive activities of mnc subsidiaries exhibit differentiation as well as integration so might mnc political activities this paper combines the literatures on international business government interactions and on multinational corporations with resource dependence theory as a foundation we develop and test hypotheses on factors that might influence the degree to which subsidiary political activities are integrated with affiliated organizations we find that subsidiary strategic integration and the economic integration of the host country significantly influence integration of subsidiary political activities

the impact of journals and authors on international business research a citational analysis of jibs articles in this paper we use citational analysis to examine the influence of individuals and disciplines on international business research we collected citational data over the ten year period 1984 to 1993 from every issue of the journal of international business studies we found that management economics marketing and finance disciplines have had significant influence on international business research and identified researchers such as dunning porter vernon casson rugman and hofstede as having made significant contributions to international business research

a probabilistic approach to pricing a bundle of products or services the authors propose a probabilistic approach to optimally price a bundle of products or services that maximizes seller s profits their focus is on situations in which consumer decision making is o

fifty years of methodological trends in jibs why future ib research needs more triangulation we analyze methodological trends in empirical research in jibs from 1970 2019 our results point to the prevalence of the following patterns there has been an increase in the use of 1 large scale longitudinal cross national datasets 2 complex analytical techniques including the incorporation of multiple analytical techniques within the same study but 3 a decline in the diversity of methods in use we relate these trends to the underlying social technical and communicative conventions in the journal during the 50 year period the observed patterns are consistent with theory that posits scientific fields entrench a dominant paradigm over time resulting in a restricted set of methodological options being selected such restrictions jeopardize the quality of research because the study of any phenomenon requires the use of multiple methodological procedures to avoid the systematic biases errors omissions and limitations introduced by any single option therefore we propose the use of triangulation as a strategy for building methodological alternatives into research designs institutionalization of this principle in the field of international business has the potential to enhance both the rigor and scope of inquiry of future research

the risk is in the relationship not the country political risk management in the uranium industry in kazakhstan how do we account for multinational energy companies that are able to operate in risky political environments while traditional risk indices may tell us why a country is considered a difficult operating environment they tell us very little about why some multinationals are neverthelessly able to operate successfully in such countries over long periods of time in fact risk indices by their very nature make success almost impossible to capture due to their sole focus on country behavior in reality when a multinational energy company enters into a given country the firm establishes relationships with a series of stakeholders not a single host country entity further the behaviors of those stakeholders good or bad do not exist in a vacuum but rather are largely influenced by the multinational s own behavior in other words the risk is in the relationship between the firm and the country s stakeholders this article argues that success is therefore a function of the firm s ability to manage relationships among a variety of stakeholders within a given country a case study of cameco a canadian based uranium mining multinational which has been operating in the politically risky country of kazakhstan for two decades bears this out

technical note simplified estimation procedures for mci models structural transformations of the mci model are presented which make the model easily estimated using dummy variables with widely available regression packages the mci model is empirically shown to provide better predictive power than several other models of similar form but ones which do not produce logically consistent market share estimates

research notesole entrant co optor or component supplier optimal end product strategies for manufacturers of proprietary component brands we propose the optimal strategies in the end product market for manufacturers of proprietary component brands mpcbs for short mpcbs can pursue one of three end product roles sole entrant as with 3com that until recently offered its palm operating system only as part of its own palm handheld devices co optor as with canon whose specialty motors go into its own and hp laser printers component supplier as with intel which has refrained from making its own pcs applying extant theoretical and modeling perspectives especially from branding spatial competition and channels we show that although each of the three roles has its unique domain of optimality the co optor role is the most widely optimal for the mpcb it is profit maximizing even when the end products are strong but not perfect substitutes an alternative component is available and the downstream market is saturated optimal prices under the co optor role are higher than under the other roles we provide an illustrative application of the model to three real world settings

environmental and economic dimensions of sustainability and price effects on consumer responses the lack of attention to sustainability as a concept with multiple dimensions has presented a developmental gap in green marketing literature sustainability and marketing literature for decades based on the established premise of customer corporate c c identification in which consumers respond favorably to companies with corporate social responsibility initiatives that they identify with we propose that consumers would respond similarly to companies with sustainability initiatives we postulate that consumers care about protecting and preserving favorable economic environments an economic dimension of sustainability as much as they care about natural environments thus we investigate how two sustainability dimensions i e environmental and economic and price can influence consumer responses using an experimental method we demonstrate that consumers favor sustainability in both dimensions by giving positive evaluations of the company and purchase intent in addition consumers respond more negatively to poor company sustainability than to high company sustainability in comparison consumers respond more negatively to the company s poor commitment to caring for the environment than to the company s poor commitment to economic sustainability we also find that consumers do not respond favorably to low prices when they have information about the firm s poor environmental sustainability finally we find support for an interaction effect between consumer support for sustainability and corporate sustainability that is consumers evaluate a company more favorably if the company shares the consumers social causes overall we conclude from our empirical study support for the idea that consumers do respond to multiple dimensions of sustainability

optimal bundling and pricing under a monopoly contrasting complements and substitutes from independently valued products we develop an analytical model of contingent valuations and address two questions of import to a monopolist i should a given pair of complements or substitutes be sold separately pure components together pure bundling or both mixed bundling and at what prices ii how do optimal bundling and pricing strategies for complements and substitutes differ from those for independently valued products we find that the combination of marginal cost levels and the degree of complementarity or substitutability determines which of the three bundling strategies is optimal complements and substitutes should typically be priced higher than independently valued products

testing the bargaining hypothesis in the manufacturing sector in developing countries the bargaining power model of hc mnc host country multinational corporation interaction conceives of economic nationalism in terms of rational self interest and assumes both inherent conflict and convergent objectives in extractive industries there is strong evidence that outcomes are a function of relative bargaining power and that as power shifts to developing hcs over time the bargain obsolesces a cross national study of the bargaining model using data from 563 subsidiaries of u s manufacturing firms in forty nine developing countries indicates that while the bargaining framework is an accurate model of mnc host country relationships manufacturing is not characterized by the inherent structurally based and secular obsolescence that is found in the natural resource industries shifts in bargaining power to hcs may take place when technology is mature and global integration limited in industries characterized by changing technologies and the spread of global integration the bargain will obsolesce very slowly and the relative power of mncs may even increase over time

preference for the workplace investment in human capital and gender we use a hypothetical choice methodology to estimate preferences for workplace attributes from a sample of high ability undergraduates attending a highly selective university we estimate that women on average have a higher willingness to pay wtp for jobs with greater work flexibility and job stability and men have a higher wtp for jobs with higher earnings growth these job preferences relate to college major choices and to actual job choices reported in a follow up survey four years after graduation the gender differences in preferences explain at least a quarter of the early career gender wage gap

gaussian demand and commodity bundling in an important and widely cited essay adams and yellen 1976 examine the use of package selling as a price discrimination device they consider a monopolist producing two goods with constant unit costs and facing buyers with diverse tastes the marginal utility of a second unit of either good is assumed to be zero for all buyers the two goods are independent in demand for all buyers so that any buyer s reservation price for the first unit of either good is independent of the market price of the other thus the maximum amount any buyer would pay for a bundle consisting of one unit of each good is the sum of the two reservation prices and buyers are completely described by the values of those two prices 2 resale markets are assumed away in order to obtain comparative results for alternative pricing strategies the distribution of reservation prices in the adams yellen framework is assumed to be bivariate normal implications of gaussian demand are explored pure bundling is shown to operate by reducing buyer diversity thus facilitating the capture of consumers surplus it generally makes buyers worse off than unbundled sales it is more profitable if average reservation prices are high enough mixed bundling combines advantages of both pure bundling and unbundled sales and it is generally strictly more profitable than either bundling which treats goods symmetrically seems most attractive under symmetric reservation price distributions i am indebted to severin borenstein for superb research assistance to the ford motor company for research support through a grant to m i t and to the harvard economics department for housing me as a visiting scholar while most of this research was performed of course only i can be held responsible for this essay s shortcomings 1 the first clear recognition of this possibility seems to have been by stigler 1968 but also see burstein 1960 2 paroush and peles 1981 relax the assumption that consumers purchase at most one unit of each good but they consider only two types of buyers both with linear demand functions they retain the assumption that demands are independent for all buyers telser 1979 and phillips 1981 use different frameworks to analyze bundling policies spence 1980 explores the relation between bundling across commodities as here and bundling multiple units of the same

ownership patterns of u s joint ventures abroad and the liberalization of foreign government regulations in the 1980s evidence from the benchmark surveys data from the benchmark surveys of the commerce department show the beginning of a global liberalization in government restrictions on foreign equity in the 1980s this was manifested in a small but unmistakable across the board reduction in the share of 50 50 and minority affiliates out of all u s affiliates in a country across countries there remains a huge variation in this proportion and the second part of the paper seeks to statistically explain this variation in a cross sectional regression analysis

government intervention in the venezuelan petroleum industry an empirical investigation of political risk two important aspects of political risk analysis that have not received much attention in the literature are a the reasons why multinational firms experience different types of intervention and b the timing of intervention in order to address these issues this research develops a conceptual model of political risk based on the premise that host government intervention is related to specific objectives of the government vis a vis multinational firms information reflecting the attainment of objectives motivates the government to intervene in a given manner the application of this model to the case of the venezuelan petroleum industry from years 1947 to 1976 provides some support for this model and gives insight into the timing of specific types of intervention

government intervention in less developed countries the experience of multinational companies it is a fact of international business that governments intervene in the operations of foreign direct investors these government actions create a high level of uncertainty in international planning and are very costly to the foreign investor it appears however that not all firms experience the same degree of intervention within almost all nations the government appears to intervene in some foreign companies more than in others at one extreme some firms are forced out of the nation while at the other extreme firms tend to grow and prosper the purpose of this paper is first to explain these different experiences of foreign firms and then to address the question how can foreign firms reduce the amount of intervention they experience the conclusions are based on the intervention histories of more than 100 firms

tourist preferences for rural house stays evidence from discrete choice modelling in spain abstract although the appeal of rural houses for tourists lies mainly in the natural surroundings and their intrinsic rural characteristics there are other factors which are also important such as their size type of building quality of equipment services and activities offered to evaluate the tourists preferences for these potential or effective attributes a stated preference experiment was conducted in the northwest area of the region of murcia and the data are analysed using discrete choice modelling methodology consistent specifications for multinomial logit and mixed logit models that consider variations in tastes within tourists preferences are found the results could be of use to promoters and owners of rural houses when planning marketing and promotional campaigns or when taking effective investment decisions

public preferences for carbon tax attributes the impacts of climate change are already visible throughout the world recognizing the threats posed by climate change the durban platform the 17th session of the conference of parties cop 17 underscores that the global nature of climate change calls for the widest possible cooperation and ambitious action by all countries a crucial starting point for the design of effective and publicly acceptable policies is to explore public preferences for climate policy instruments using a choice experiment this study investigates public preferences for carbon tax attributes in a developing country context the results account for heterogeneity in preferences and show that turkish people prefer a carbon tax with a progressive cost distribution rather than one with a regressive cost distribution the private cost has a negative effect on the probability of choosing the tax earmarking carbon tax revenues increases the public acceptability of the tax moreover there is a preference for a carbon tax that promotes public awareness of climate change

products with branded components an approach for premium pricing and partner selection an increasing number of products are being sold with components that themselves are brand names examples are personal computers with intel microprocessors and diet soft drinks that use the nutrasweet formulation branded components may alter consumers valuation of the bundle necessitating changes in the ways firms identify and price such bundled products surprisingly the existing marketing literature is silent on this issue the purpose of our paper is to propose an analytical approach that helps marketers of products with branded components make optimal pricing and partner selection decisions our managerial objectives are twofold a to the seller of the bundled product we suggest the optimal bundled product offering optimal selling prices of alternative products revenues and profits and b to the branded component manufacturers we indicate the most favorable alliance partners and payoff gains losses of aligning with other branded components instead of unbranded alternatives our analytical approach is also likely to be helpful to academics researching bundling and ingredient branding issues the specific problem modeled assumes the bundled product has two components that are consumed jointly furthermore each component can be either a brand name or unbranded in this model the consumer has no control over the choice of the components in the bundle the seller decides what form of bundle components i e branded or unbranded to offer we assume that the product that is marketed eventually enjoys a monopoly drawing from research in signaling and brand alliance we posit each branded component may either enrich or suppress the value of the partnering component in the bundle as perceived by the consumers our approach has three methodological stages first we build an individual level model to assess the valuation of alternative products and their principal components at the level of a randomly drawn consumer to do so we rely primarily on the theory of reservation prices and weber s theory on price value changes second we aggregate such valuation across consumers to assess the market s overall valuation for this purpose we invoke parametric distributions based on integral transform theory third we develop payoff functions based on market valuation of alternative products and supply side costs the managerial objectives are met based on results from this stage our approach was successfully applied to the context of a university bookstore that intends to sell windows based laptop computers the two principal components of the laptop computer bundle are the microprocessor chip and the personal computer platform on which the chip is implanted the seller may choose either compaq with intel inside or a simpler bundle featuring one of these with an unbranded complementary component or an entirely unbranded bundle we used data collected from 192 potential consumers via a survey included in the survey were measures of consumers perceptions of functional aspects of the components and their reservation prices for alternative bundled products the approach identified the most profitable bundle for the seller and its optimal price it also provided estimates of the revenue impact of the gain or loss for each branded component by partnering the other branded component instead of the unbranded alternative as such the model facilitates the determination of the optimal price price premium and profits for products with branded components as well as the identification of the ideal partner for each branded component manufacturer it is apt to caution that products with branded components need not always lead to price premiums or lead to win win outcomes reasons such as incongruity between the branded components or domination of one of the components over the other may drive potential consumers away thus hurting profits implications of the results to negotiate component prices are discussed in the paper the study limitations and directions for future research are also presented

accounting for heterogeneity and nonstationarity in a cross sectional model of consumer purchase behavior when calibrating a brand choice model cross sectionally a measure of brand loyalty is often introduced into the utility function to account for differences in utility across households and over time one of the most widely used measures of brand loyalty proposed by guadagni and little 1983 is an exponential smoothing model of past choice behavior by the household in this study we argue that the exponential smoothing model of brand loyalty cannot properly distinguish between sources of variation in utility due to heterogeneity across households and sources of variation due to nonstationarity within household over time we introduce a new measure of brand loyalty derived from a nonstationary dirichlet multinomial choice model in which heterogeneity and nonstationarity are handled distinctly

enhancing the obsolescing bargain theory a longitudinal study of foreign ownership of u s and european multinationals this research attempts to enhance the obsolescing bargain theory for manufacturing companies by statistically testing the effects of nine explanatory variables on the static and dynamic manifestations of bargaining success with longitudinal firm level data in order to highlight those effects it develops a conceptual framework that provides a broader context in which the primary variables operate it demonstrates that the obsolescing bargain took effect in india over a fifteen year period following restrictive legislation unlike previous research this study measures the effect of benefits received by multinationals from the host government in exchange for equity dilution american companies are found to retain a smaller share of their foreign ownership over time than british and other european multinationals some explanatory variables that have previously been found to influence level of foreign ownership static bargaining success are found to be less important or have a different effect in explaining proportion of foreign ownership retained dynamic bargaining success

return on roller coasters a model to guide investments in theme park attractions despite the economic significance of the theme park industry and the huge investments needed to set up new attractions no marketing models exist to guide these investment decisions this study addresses this gap in the literature by estimating a response model for theme park attendance the model not only determines the contribution of each attraction to attendance but also how this contribution is distributed within and across years the model accommodates saturation effects which imply that the impact of a new attraction is smaller if similar attractions are already present it also captures reinforcement effects meaning that a new attraction may reinforce the drawing power of similar extant attractions especially when these were introduced recently the model is calibrated on 25 years of weekly attendance data from the efteling a leading european theme park our return on investment calculations show that it is more profitable to invest in multiple smaller attractions than in one big one this finding is in remarkable contrast with the current arms race in the industry furthermore even though thrill rides tend to be more effective than theme rides there are conditions under which one should consider to switch to the latter

banning controversial sponsors understanding equilibrium outcomes when sports sponsorships are viewed as two sided matches this article applies a two sided matching model to investigate the consequences of banning controversial sponsors using a data set containing the shirt sponsorships from 43 english football clubs between 1990 and 2010 the authors estimates suggest assortative matching between a club s attendance and a sponsor s revenue in addition sponsorships become less valuable as the distance between the club and the sponsor s head office grows particularly for low performing clubs and smaller domestic sponsors the authors use these estimates to simulate the consequences of banning alcohol and gambling sponsors their estimates of counterfactual outcomes suggest that such bans may not have the largest impact on the clubs particularly the relatively successful clubs that currently have alcohol and gambling sponsors instead clubs with low attendance and clubs in low income areas will be most affected by a ban more generally the results demonstrate that when marketing relationships are viewed as the result o

umbrella branding as a signal of new product quality an example of signalling by posting a bond i present a signalling model in which a multiproduct firm can use its reputation as a bond for quality by using a brand name for an established product when it introduces a new experience good as out of equilibrium beliefs are specified a false signal may be taken to imply that both the established and the new product are of low quality in contrast the absence of a signal leaves open the possibility that one of the two products is of high quality hence the signal can be credible without excessive sunk costs as long as the bond posted is sufficiently large

environmental risks and joint venture sharing arrangements multinational enterprises mnes have responded to the open door policies of socialist countries in recent years by investing in their economies through joint ventures mnes must formulate their investment strategies to control and manage the environmental risks peculiar to a traditional centrally planned economy cpe in which contextual and transactional environments are blurred joint venture sharing arrangements may be structured to control exposures to uncertainties and to align the interests of transactional parties mostly state owned enterprises to those of the venture this study tests the hypothesis that a foreign investor s share in a joint venture in a cpe is inversely correlated with 1 the amount of uncertainties and risks and 2 the external dependency of the venture on the contextual and transactional relationships of the host country the hypothesis is supported by empirical evidence from data on american joint ventures in china

conjoint analysis of price premiums for hotel amenities over the past decade or so conjoint analysis green and rao 1971 johnson 1974 appears to have become one of industry s most widely applied marketing research techniques for estimating consumer s multi attribute utility functions cattin and wittink 1982 however a continuing problem in application of conjoint analysis is how to handle the price attribute in the construction of stimulus profiles for presentation to respondents in many cases of practical interest the price level will be highly correlated with other product attribute levels if the researcher ignores this correlation by allowing the price levels to vary independently of other attributes the resulting profiles may appear sufficiently unrealistic to result in respondents discounting each profile s attractiveness thus reducing the validity of the results a related problem which adds to the complexity of new product pricing research is the bundling issue in the context of conjoint analysis the question is whether one can predict a respondent s evaluation of a bundle of product attributes and price as a simple linear function of the summed part worths of the entities making up the bundle when each entity is presented with its actual price metric hybrid conjoint models have received a fair amount of industry application to date the purpose of these models is to reduce data collection time while still retaining individual differences in part worth functions the present paper extends this class of models to include categorical conjoint analysis in which the criterion variable is classificatory this model is applied to an extremely large conjoint problem involving over 40 attributes and over 100 attribute levels the study results support the viability of the model for dealing with extremely large conjoint problems the study also shows evidence of the inability of simple functions of self explicated utilities for components of a bundle of hotel amenities to predict respondents preferences for the total bundle journal of business 1984 vol 57 no 1 pt 2 1984 by the university of chicago all rights reserved 0021 9398 84 5712 0019 0 1 50

developed country mnes investing in developing economies progress and prospect this study reviews research from 1970 through 2016 on developed country multinational enterprises dmnes entering and competing in developing economies to identify the current state of knowledge of this research and push it further we review the literature using bibliometric and qualitative content analyses covering leading journals and books we articulate frontier issues that are understudied yet critical to both theorization and practice of dmnes in developing economies we discuss the findings and conclusions from prior research along five key areas 1 entering developing economies 2 organizing local activities 3 managing alliances and joint ventures 4 competing in dynamic environments and 5 dealing with institutions governments and society we offer prospective insights into future agenda that have important implications for mne strategies and decisions and propose frontier directions that encompass strategic localization reverse transfer and adaptation co evolution with local business ecosystems reorganizing and restructuring and strategic responses to institutional and market complexity

the contribution of associate s degree holders to u s earnings labor quality productivity and overall economic growth there is substantial evidence on the importance of education as a driver of earnings productivity and economic growth however knowledge of the specific role of associate s degrees in u s economic growth is limited we analyze the sources of u s economic growth and identify the contribution of associate s degree holders to improvements in earnings labor quality productivity and overall economic growth we find evidence that substitution toward workers with associate s degrees has increased u s earnings aggregate labor quality and productivity and that these effects are concentrated in the health care trade and government sectors while the average educational attainment of people entering the labor force has plateaued our results suggest that shifting workers from some college to associate degrees could improve earnings the quality of the workforce productivity and growth potentially without more time spent in school

multiproduct monopoly commodity bundling and correlation of values through what selling strategy can a multiproduct monopolist maximize his profits when his knowledge about individual consumers preferences is limited one possibility extensively studied in the context of a single good monopoly is to use quantity dependent pricing as a means of discriminating among customers with differing tastes see for example oi 1971 and maskin and riley 1984 an alternative technique for price discrimination first suggested by stigler 1968 and analyzed further by adams and yellen 1976 is for the monopolist to package two or more products in bundles rather than selling them separately through a series of examples adams and yellen illustrate that bundling can serve as a useful price discrimination device even when all consumers willingnesses to pay for each of the goods individually are unaffected by whether they are also consuming the other product a typical example is illustrated in figure i adapted from figure iv in adams and yellen where there are two goods three consumers ab c who consume at most one unit of each good with reservation values for each good that are independent of whether the other good is consumed and zero costs of production there a bundle offered at a price of 100 fully extracts all potential surplus which would be impossible pricing the goods independently unfortunately though these authors do not provide any general characterization of the circumstances in which bundling is actually a multiproduct monopolist s optimal strategy their examples however such as figure i create the impression that the profitable use of bundling

liberalizing foreign direct investment regimes the vestigial screen abstract governments throughout the developing world are widely viewed to be liberalizing their foreign investment regimes this paper reports on a study that assesses the progress governments have made in implementing new investment regimes by comparing changes in the policies of governments toward foreign investment with changes in the structures and processes they use to screen foreign investment the data suggest that the implementation of new investment regimes has been slowed by political compromises among units within governments the paper points to the critical importance of strong central administrations that can muster the will to push liberalization efforts and provides recommendations on how governments can implement effectively policies of investment liberalization

predictive testing of consumer choice models not subject to independence of irrelevant alternatives the probabilistic modeling of the relationship between objective or perceived characteristics of multiattribute alternatives and consumer choice is receiving increased attention in marketing and ot

sheepskin effects in the returns to education an examination of women and minorities recent confirmation of sheepskin effects in the returns to education for prime age white males has been taken as evidence of screening or signaling in the labor market the authors report evidence of sheepskin effects among women and minority males and demonstrate that they are somewhat smaller for lower diploma years but larger for higher diploma years than those of white males these are among the first broad based results confirming the frequent contention derived from signaling models that minorities have smaller returns to low productivity signals but larger returns to high productivity signals copyright 1991 by mit press

a general choice model for bundles with multiple category products application to market segmentation and optimal pricing for bundles abstract the attribute based approach to study customer choices cannot deal with bundles of heterogeneous components which are usually drawn from different product categories the authors develop the comparability based balance model which is a unified framework for modeling bundle choices the model can be employed for any bundle regardless of the heterogeneity of bundle components under a pure bundling strategy the conjoint model and balance model are special cases of the general model the authors use mixture distributions in a hierarchical bayesian framework to incorporate consumer heterogeneity in a more flexible manner than the extant approaches such as latent class and random coefficient models the empirical tests of the model show that most attribute effects are significant and consistent with the model s predictions the model is superior to those that do not consider the issues of comparability of attributes latent class structure and heterogeneity among respondents the authors show how