is approval voting an unmitigated evil a response to brams fishburn and merrill brams fishburn and merrill 1988 contend that the indeterminacy of approval voting av introduced in our paper 1988 is not a vice but a surpassing virtue of av they do not compare the negative versus the positive features of av so their assertion remains a conjecture our response emphasizes the need to determine the costs of av and to evaluate them against any merits moreover by correcting and answering bfm s comments the argument against av becomes much stronger this is because we show that av s region of indeterminacy is quite large it includes most profiles some of the consequences of this instability are that the av outcome can negate the voter s true wishes that the av outcome can be volatile even to minor fluctuations of voter s decisions and that av is one of the most susceptible systems to manipulation by small groups of voters for example small maverick groups could determine the av outcome under specific circumstances av may be appropriate to identify these situations we propose the more accurate name of the unsophisticated voter system

prices and the winner s curse we usually assume that increases in supply allocation by rationing and exclusion of potential buyers reduce prices but all these activities raise the expected price in an important set of cases when common value assets are sold furthermore when we make the assumptions needed to rule out these anomalies for symmetric buyers small asymmetries among the buyers necessarily cause the anomalies to reappear our results help explain rationing in initial public offerings and outcomes of spectrum auctions we illustrate our results in the wallet game and in another new game we introduce the maximum game

a qualitative study of managerial challenges facing small business geographic expansion abstract geographic expansion is a common growth strategy used by small entrepreneurial firms yet despite the importance of geographic expansion as a growth strategy it is a neglected area of small business research to date research in the area of small business growth has focused on broad issues such as the common obstacles to firm growth and the relationship between firm growth and firm profitability whereas this literature is suggestive it does not provide specific prescriptive advice to small business managers pursuing geographic expansion as a growth strategy as a first step in generating prescriptive advice in this area this study examined the managerial challenges that faced one small firm during the early stages of its efforts to expand geographically the subject organization referred to as the local advertising company lac operated in a single location from 1968 to 1990 as a means to initiate firm growth the owners of the company opened eight new locations in 1991 and eight more in 1992 however problems ensued this study used a qualitative research methodology to conduct an assessment of the managerial challenges facing the lac during its geographic expansion effort seventeen key employees of lac were interviewed for the study the qualitative case study methodology used provided an opportunity to gather in depth information from informants regarding their individual assessment of the managerial challenges encountered by lac during its geographic expansion collectively the respondents identified a number of specific management issues that became problematic during lac s geographic expansion effort through a content analysis technique these issues were organized into 15 thematic categories including training recruitment and selection the relationship between the field staff and the original owners and 12 others each of these categories represents the separate managerial challenges faced by the company during its geographic expansion the study provides a descriptive analysis of each of the 15 categories of managerial challenges that emerged the research results suggest that the successful management of a geographic expansion growth strategy requires managers to deal with a unique set of issues for example the training of new employees may become problematic when the most experienced personnel in the firm reside in the home office and the new trainees are located in widely dispersed geographic locations in addition the results of the study provide an extension to both practical and theoretical knowledge in three distinct areas planning for growth managing growth and the reasons for growth first the results of the study support the importance of planning for growth but suggest that planning must be complemented by learning and a willingness to evolve one s plan as growth progresses in terms of the management of growth the case shows that running a small business and growing a small business do not include the same skill set the owners of lac had been quite successful managing their single location for 22 years however this ability to run a business did not complement the need to anticipate start up problems in new remote sites which is inherent in a strategy of geographic expansion in addition the case demonstrated that the management of growth requires a cognizance on the part of the original owners of a firm to delegate control finally with regard to the reasons for growth researchers generally characterize firm growth as being motivated by either economic e g economies of scale or emotional reasons e g employing family members the owners of lac initiated firm growth for the purpose of wealth creation to fund their retirements this illustrates that firm growth can be motivated by a combination of both economic e g wealth creation and personal e g retirement security reasons

equilibrium in auctions with entry the authors model entry incentives in auctions with risk neutral bidders and characterize a symmetric equilibrium in which the number of entrants is stochastic the presence of too many potential bidders raises coordination costs that detract from welfare the authors show that the seller and society can benefit from policies that reduce market thickness i e the relative abundance of buyers their analysis extends well known revenue equivalence and ranking theorems but also demonstrates that variations in the auction environment affect optimal policies e g reservation prices in ways not anticipated by models that ignore entry copyright 1994 by american economic association

first price auctions with resale abstract we present a simple model of first price auction with two bidders whose valuations are not identically distributed and where resale is possible between the bidders and given an explicit expression for the equilibrium strategies

the source of some paradoxes from social choice and probability abstract an elementary argument is developed to explain and unite several paradoxes coming from probability and from social choice this geometric approach is illustrated with new results about the intransitivities of election rankings over subsets of alternatives agenda manipulation conditional probability and waiting times

optimal auctions revisited in symmetric privately known values oral auctions with costly entry for bidders the seller can do no better than by committing ex ante to a reservation price and entry fees or subsidies which result in no fewer and at most one more bidders than a reservation price equal to the seller s value would in the absence of entry fees or subsidies journal of economic literature classification numbers d44 c72

a dictionary for voting paradoxes abstract a sonnenschein mantel debreu kind of characterization is found for positional voting procedures namely for n 2 candidates once the voting procedures and a profile are specified the rankings of all possible subsets of candidates are uniquely determined by varying over all profiles one obtains a dictionary of all possible coordinated election outcomes this is done for all positional voting procedures as with excess demand functions anything can happen voting paradoxes can be very complicated only borda s method avoids many paradoxes use of this dictionary is illustrated by significantly extending several well known paradoxes and by obtaining new results about runoff and agenda elections strategic behavior etc

on the justice of decision rules which decision rules are the most efficient which are the best in terms of maximin or maximax we study these questions for the case of a group of individuals faced with a collective choice from a set of alternatives a key message from our results is that the set of optimal decision rules is well defined particularly simple and well known the class of scoring rules we provide the optimal scoring rules for the three different ideals of justice under consideration utilitarianism efficiency maximin and maximax the optimal utilitarian scoring rule depends crucially on the probability distribution of the utilities the optimal maximin respectively maximax scoring rule takes the optimal utilitarian scoring rule and applies a factor that shifts it towards negative voting respectively plurality voting

employment change in independent owner managed high technology firms in great britain there is a growing volume of literature that points to the potential for small technology based firms to achieve substantial employment growth as a direct consequence of such work this sector of any economy has attracted increasing attention from national and local governments concerned with finding ways of revitalising economically deprived localities and creating employment opportunities this paper provides up to date empirical evidence surrounding the ability of small high technology firms to create additional jobs in great britain in addition key founder and business characteristics are isolated which are significantly associated with employment change in growing high technology firms over the 1986 to 1992 period with respect to factors influencing these high levels of employment growth a high firm size in 1986 was found to act positively on employment growth as was a graduate level education for the key founder on the finance side firms which had access to and used a multiplicity of sources of start up finance tended to grow faster futher on the basis of our results we would suggest and recommend a government policy which at the firm level actively encourages high technology firm start ups who record higher rates of survival than firms in more conventional sectors as well as providing support for existing high technology firms who have already demonstrated the inclination and ability to grow in employment size

explaining all three alternative voting outcomes abstract a theory is developed to explain all possible three alternative single profile pairwise and positional voting outcomes this includes all preference aggregation paradoxes cycles conflict between the borda and condorcet winners differences among positional outcomes e g the plurality and antiplurality methods and differences among procedures using these outcomes e g runoffs kemeny s rule and copeland s method it is shown how to identify interpret and construct all profiles supporting each paradox among new conclusions it is shown why a standard for the field the condorcet winner is seriously flawed journal of economic literature classification numbers d72 d71

the problem of indeterminacy in approval multiple and truncated voting systems it is well known that a plurality election need not reflect the true sentiments of the electorate some of the proposed reform procedures such as approval and cumulative voting share the characteristics that there are several ways to tally each voter s preferences voting systems that permit truncated ballots share this feature it is shown that the election results for any such procedure can be highly indeterminate all possible election results can occur with the same choice of sincere voters this conclusion of indeterminacy holds even when measures of voters sentiments such as the existence of a condorcet winner or even much stronger measures indicate there is considerable agreement among the voters then multiple systems are compared with all standard tallying procedures for instance a corollary asserts it is probable for the plurality voting method to elect the condorcet winner while approval voting has an indeterminate outcome

partial pooling at the reserve price in auctions with resale opportunities abstract two features common to many auctions are the use of reserve prices and the existence of secondary markets for the goods being sold even in simple symmetric settings the combination of these features can preclude existence of an equilibrium in symmetric separating bidding strategies with a reserve price sufficiently far below the maximum endogenous valuation a symmetric equilibrium still exists but with some types pooling at the reserve the optimal reserve price depends not only on the joint distribution of bidders information before and after the auction but also on how surplus is divided in the secondary market journal of economic literature classification numbers d44 c7 l1 d82

discontinuance among new firms in retail the influence of initial resources strategy and gender abstract women owned businesses represent one of the fastest growing segments of the u s economy their rate has increased more than six fold since 1970 despite this growth rate the number of firms owned by women still lags behind that of men and the sales and income of women owned firms are significantly lower than those of men owned firms the discrepancy between the number of businesses owned by women and men and their economic success has been a popular theme among researchers some have suggested that performance differentials result from disparate structural positions women and men occupy in work and society whereas others attribute the differences to deep rooted interpersonal orientations this study examines whether the performance differences can be explained by variations in initial resources and founding strategy we test whether women have fewer start up resources and if they do whether they can compensate for these deficiencies through their founding strategy recent work in social psychology argues that strategic choice is shaped by experiences to which individuals have been subjected and that women and men have fundamentally different socialization experiences we test the assumption that if the strategy that women owners adopt exploits the unique capabilities they derive from their socialization they can improve the performance of their firms and ward off discontinuance we examine the discontinuance pattern of 203 new firms in the retail industry this industry was selected because women entrepreneurs often choose to operate in this industry giving us a basis for comparing women owned and men owned firms we classify the firms into six strategy archetypes the arche types range from a broad focus where founders emphasize multiple strategic foci simultaneously to narrowly targeted differentiation strategies we assume that the experiential base of women entrepreneurs limits their successfully executing pricing strategies we hypothesize that women led firms decrease the odds of discontinuing by adopting one of two strategy types 1 narrow differentiation strategies that seek to satisfy a narrow segment of the market and that do not rely on pricing or 2 broad generalists strategies that emphasize service and quality but not pricing and take advantage of women s capability for handling multiple stakeholders simultaneously the results offer support for using an integrative model to explain the performance of women owned firms women owned firms have higher odds of discontinuing than men owned firms and women appear to have fewer resources to start their businesses women owners were less likely to have instrumental experience from working in the retail industry and start their businesses on a smaller scale then men but were no less likely then their male counterparts to have access to credit from formal financial institutions or to be disadvantaged by starting fewer other new businesses despite some apparent situational disadvantage resource deficiencies do not appear to affect the odds of women owned businesses discontinuing as much as they do men owned initiatives the findings indicate support for the supposition that women owners can use founding strategy to decrease the odds of discontinuing business a broad generalists strategy that represents a multi focused approach was found to benefit women owned businesses most overall the results suggest that men use prior business experience and human capital to affect the survival status of their businesses women appear to find strategic choice more beneficial future research is recommended to further elaborate the integrative model special attention should be given to developing alternatives to measures traditionally used in gender research many researchers charge that those typically used reflect male derived measures similarly greater attention should be given to understanding why the scale of women owned businesses at start up is substantially smaller than that of men since scale has been shown to be related to subsequent growth and survival

susceptibility to manipulation all positional voting procedures can be manipulated so it is natural to question whether some of these systems are more susceptible to being manipulated than others in this essay this susceptibility factor is measured for strategic action involving small groups it is shown that the system least susceptible to micro manipulations for n 3 candidates is the borda count bc the optimal choice changes with n but the analysis shows that the bc always fares fairly well on the other hand the plurality and anti plurality vote as well as multiple voting systems such as approval voting and cumulative voting always fare quite poorly with respect to susceptibility finally it is shown why it is possible to justify any voting method by choosing an appropriate measure of susceptibility and imposing the appropriate assumptions on the profiles of voters this statement emphasizes the importance of the basic assumptions of neutrality used throughout this essay

auctions with an inexpert bidder abstract we consider an auction in which the behavior of one potential bidder departs mildly from full rationality we show that the presence of such an inexpert bidder can be enough to discourage all of an infinitely large population of fully rational potential bidders from entering an auction furthermore this departure from full rationality does not reduce the inexpert bidder s payoff

analysis of renewable energies in european union abstract the paper s main research objective is to analyse the renewable energy sector in the european union member states the first step of the research was to generate clusters of countries based on the share of renewables in total energy produced and the countries energy dependence in order to generate the clusters we applied the k means clustering method based on the data obtained from eurostat by using the statistical package for the social sciences three clusters of countries have been generated in the next step the eu states were ranked based on the following criteria share of renewable energy sources share of renewable electricity share of renewable heating and cooling and share of renewable energy in transport then the main characteristics of the renewable energy policy in each member state have been highlighted

implementing the borda outcome via truncated scoring rules a computational study this study is an attempt to empirically understand the likelihood of choosing the borda outcome through a truncated scoring rule when n voters are asked to report only part of their linear preferences over m alternatives we run monte carlo simulations through a grid search algorithm as we employ an impartial culture model to sample voters preferences given the range of parameter values we consider we report the truncated scoring rules that maximize the likelihood of implementing the borda outcome and how the maximum likelihood changes with m and n we also present our results on the relative performances of some popular truncated voting rules such as plurality and approval voting in implementing the borda outcome and demonstrate that two level approval voting performs significantly better than the plurality rule moreover we propose the expected borda rule as a good proxy for the best implementor of the borda rule among all truncated rules

gray marketing as an alternative market penetration strategy for entrepreneurs conceptual model and case evidence abstract gray marketing is said to occur when authentic branded products reach the consumer through marketing channels other than that of the authorized distributor weigand 1991 free riding was first offered by tan et al 1995 tan et al 1997 as an alternative explanation for the occurrence of gray marketing we extend the authors work to show that free riding can be an alternative strategy to niching for entrepreneurs contemplating entry into established markets almost exclusively the existing literature on gray marketing treats the phenomenon as a pricing problem and fails to recognize it as a market entry opportunity for start up entrepreneurs the gray marketing strategy is appropriate for start up entrepreneurs in view of their resource limitations and the risk of being a first mover in market development we show in this paper that an entrepreneur can successfully penetrate an established market by following a gray marketing strategy this is because it can be optimal for the incumbent supplier to accommodate the entrepreneur gray marketer even if the former could force the latter out of the market through aggressive counter actions we developed a conceptual model using game theoretic concepts to aid entrepreneurs in understanding the strategic interactions amongst parties involved in gray marketing and to identify the conditions under which entrepreneurs can successfully penetrate a market via gray marketing the deductive or game theoretic approach we feel is most appropriate because gray marketing involves multiple party interactions and conflicts of interests as moorthy 1985 showed the game theoretic methodology is most suited to analyzing the behavior of market participants in such a situation this paper identifies the conditions under which gray marketing would be profitable and sustainable for entrepreneurs first by targeting markets that are already well established by the larger firms the entrepreneurs risk of failure due to demand uncertainty is reduced in addition they need not incur substantial costs for market developmental efforts furthermore the free riding strategy provides entrepreneurs with the opportunity to enter profitable markets that are currently supplied by larger firms instead of being restricted to markets ignored or disdained by the latter second entrepreneurs are able to benefit from the second mover advantages in following the free riding strategy as late entrants into the market entrepreneurs could learn from the experiences of the larger firms and avoid costly mistakes by imitating the product strategy of the larger firm entrepreneurs could also achieve cost savings in r d and product development costs all these effectively reduce the entrepreneur s cost of entry into the market hence even with limited resource at their disposal entrepreneurs could still enter the market successfully finally by following the free riding strategy entrepreneurs are able to nibble at the market shares of the larger firms this is possible because of the difficulties and costs faced by the larger firms in countering entries made by the entrepreneurs thus the larger firms are left with little choice but to accommodate the entry of the entrepreneurs into the market when the costs of countering the entrepreneurs entry are sufficiently large the free riding strategy becomes feasible for entrepreneurs even if they do not posses competitive advantages over the larger firms our paper thus demonstrates that entrepreneurs do have an alternative market entry strategy besides the commonly prescribed niching strategy it also shows them when such a free riding strategy would be most beneficial and most likely to succeed these are further illustrated and supported through two real life cases involving companies in the luxury cars and cosmetics industries in singapore

the importance of focus to market entrants abstract one of the most difficult questions facing entrepreneurs is how broadly to serve a heterogeneous market that is whether it is better to serve a narrow segment of the market hoping to flourish by gaining a relatively high and increasing market share within that segment or whether it is better to attempt to appeal to a broader cross section of the market thereby allowing the firm to succeed with a lower market share among the customers whom it is targeting a narrower focus permits more concentrated use of fixed resources facilitates the building of customer loyalty and lowers the threat of retaliation from generalist incumbents but requires a much higher market share within the firms target market to succeed porter 1980 has identified three generic strategies available to firms low cost differentiation and focus by focus he means that the firm should develop the ability to serve a particular target customer group very well often at the expense of other potential customer groups implicit in the firm s choice to adopt a focus strategy is that it must address the question of how broadly to focus in terms of any given product attribute given its resources and opportunities a fundamental element of the firm s choice of focus is that it is affected by and in turn affects that of its rivals that is focus is a strategic variable in the sense of the word strategic meant by game theorists each firm s optimal choice of action depends on the actions taken by other firms the literature on the optimal degree of focus for new ventures has reached very mixed conclusions the early authors looking at the question were fairly consistent in their recommendation that a highly focused or niche strategy was generally most appropriate later authors recommended that new ventures should enter markets aggressively facing larger incumbents head on the latest studies develop what we describe as a contingency approach arguing that the best approach depends on industry conditions we think that this literature is now at a point where we can advance our understanding by looking at specific industries in some detail as our understanding expands broader empirical work is becoming increasingly difficult because of the number of factors that must be built into any cross sectional model of new venture performance we hope then to develop an understanding of one industry that is generally similar in nature to many other industries from this understanding conclusions of interest to both researchers and practitioners can be drawn future studies of other industries with different fundamental structures will provide similar benefits more specifically this paper is an empirical inquiry into the microbrewery segment of the u s brewing industry designed to investigate the relative merits of specialist firms different degrees of focus the question addressed is whether focus affects specialist firms short run performance in an industry where there are entrenched generalists as well as many new entrpreneurial specialist entrants the analysis confirms several widely held beliefs of industry participants and observers that microbreweries are far more likely to attempt to serve too broad a market segment than to focus too narrowly that microbreweries are in direct competition with imports and that microbreweries benefit from having many microbrewery rivals within the same state furthermore there appear to be some small learning and or reputation effects in the operation of microbreweries as well as a minor novelty factor that benefits recently opened establishments we must note however that the majority of the variation in the performance of microbreweries stems from differences in the management organization or market of individual breweries not captured explicitly by other variables included in the study this finding perhaps should not be surprising given the huge variation in the backgrounds skills and outlooks of microbrewery owners during the segment s early days the lessons learned from this research are of obvious importance to entrepreneurs in many industries it is a very common situation for an entrepreneur to enter a stable industry in which established firms are already in place serving a broad cross section of the market our findings show that in such circumstances a narrowly focused approach to the market is best we can think of numerous examples of where entrepreneurs have either succeeded by focussing on a particular segment of the market or failed by not doing so in fact there are many cases in which firms have done first one and then the other for example and people express airlines at first flourished by focussing on the needs of budget conscious leisure travellers and then collapsed in part because it began to try to serve business travelers and others who are less price sensitive on certain routes one of the hallmarks of an entrepreneurial business is that it suffers severe resource constraints because the entrepreneur s choice of breadth of focus will have profound effects on the resource requirements of the business it is clear that the choice of which segment or segments of the market on which to focus is a fundamental decision made by all entrepreneurs this paper serves to illustrate the importance of this focus decision and to provide some guidance for entrepreneurs concerning the appropriate degree of focus to adopt in entering an established market

capital market myopia abstract the purpose in writing this article is to focus attention on a phenomenon we call capital market myopia a situation in which participants in the capital markets ignore the logical implications of their individual investment decisions viewed in isolation each decision seems to make sense when taken together however they are a prescription for disaster capital market myopia leads to overfunding of industries and unsustainable levels of valuation in the stock market we use the winchester disk drive industry to elucidate the phenomenon we argue that capital market participants should have seen the problem coming they should have known that valuation levels were absurd based in large part on the greater fool theory the data necessary to anticipate the problem were readily available before the industry shakeout began and stock prices collapsed there are several lessons which we believe can be learned by careful examination of the disk drive experience in the period under study these include taking the broad view of the industry is the key to profitable investment the investment mania visited on the hard disk industry contained inherent assumptions about long run industry size and profitability and about the future growth profitability and access to capital for each individual company these assumptions had they been stated explicitly would not have been acceptable to the rational investor certainly there are valuations which arise which cannot be justified under any circumstance these are the times for the manager to raise money from the public capital markets those managers who took advantage of unsustainable valuation levels now have a chance to survive the shakeout growth is not equivalent to profitability the high growth rate in the industry made it the focus of considerable managerial investor and technological attention the industry attracted so many resources that the growth had high probability of being unprofitable excesses in the capital market turned an opportunity into a disaster profits for some are not equivalent to a good business many players made high profits by investing in the hard disk drive business including the investment bankers and certain of the venture capital groups which invested early enough to catch the wave of euphoria in the stock market and still sell under rule 144 many others rode the cycle up and down without liquidity for many buyers of disk drive stocks in 1983 losses were massive short term successes of some gave the illusion of long term profitability for all investors should not be fooled by such invevitably ephemeral successes market instability can be all bad news very rapid change often creates entrepreneurial opportunity it also creates risk analysis of the hard disk drive industry reveals the dark side of rapid technological evolution and of customer instability early players are often preempted by changes in technology and in customer needs early birds are not always winners in product markets but late comers are almost always losers recognizing the chain one of the more important lessons to be learned from the tale of the disk drive industry is that all players entreprenuers venture capitalists investment bankers industry analysts and investors must recognize the chains involved in such a process first there was a technological chain a series of bets on technological advances in disk drive components disk drive designs and end user designs then there was a financial chain a series of related bets on the internal financial health of each player in the technological chain and on the nature of access to capital in the private and public markets the likelihood that any player in the disk drive industry would prosper without a serious setback due to a weak link was effectively zero indeed weaknesses in the chain were created by exactly the same people whose financial success depended on an unbroken series of favorable outcomes during this same period the public capital markets were also a large supplier of funds to the disk drive industry the total amount of money raised in public offerings of common stocks for participants in the industry was over 800 million during the middle part of 1983 the capital markets assigned a value in excess of 5 billion to 12 publicly traded venture capital backed hard disk drive manufacturers the strong market valuation of these companies paralleled the boom in other high technology stocks and rising valuation levels in the stock market in general table 2 contains data on stock prices and valuation levels for some disk drive manufacturers and table 3 provides general data on the economy and capital markets

corporate versus independent new ventures resource strategy and performance differences abstract this study examines differences between independent ventures ivs which are established by individual entrepreneurs and corporate ventures cvs which are controlled by larger companies it focuses on differences between these ventures related to the resources strategies and performance of firms in the computer and communications equipment manufacturing industries thus the findings increase the understanding of the different challenges faced by each venture type and provide insight into how each venture type should be managed the study finds that managers of cvs and ivs emphasized different resources and strategies specifically cvs emphasized the following resources internal capital sources proprietary knowledge and marketing expertise ivs emphasized external capital sources technical expertise and development of brand identification they also differed in their strategies ivs pursued greater strategic breadth more customer service and focused more on specialty products the findings that cvs had less strategic breadth was surprising in that cvs emphasized resources such as internal capital sources which could make pursuing broad strategies more feasible for cvs it is possible that some cvs do not pursue broad strategies because they may be infringing upon someone else s turf within the corporation and thus may be discouraged in spite of finding significant strategy and resource differences the study found that ivs and cvs did not differ in performance and that resources were not directly related to performance based on the concept of equifinality it follows that both venture types can be equally successful even if they follow different roads to success success may be less a function of the different resources ivs and cvs have and more a function of what strategies the firms choose based upon their resources strategy variables did relate to performance a low cost strategy lowered performance regardless of venture type and the influence of an aggressive strategy i e wide strategic breadth on performance depended upon venture origin managers pursuing a low cost strategy may have had lower performance if they became penny wise and pound foolish missing opportunities in their efforts to lower costs this suggests that regardless of venture type managers of new ventures in these industries and perhaps in other volatile industries may need to be opportunistic this study indicates that pursuing broad strategies increased the performance of ivs and decreased the performance of cvs this finding was surprising in that cvs had greater resources which one might think would lead to successful implementation of aggressive strategies in securing enough resources to pursue aggressive strategies from their parents cvs may lose the freedom of action they need to cope with the dynamism of high technology industries this suggests that managers of cvs within the computer and communications equipment manufacturing industries should either not pursue broad strategies or if pursuing broad strategy they should maintain their flexibility in contrast ivs that pursued broad strategies achieved higher performance indicating that perhaps ivs unencumbered by the bureaucracy that characterizes cvs may be able to pursue aggressive strategies while simultaneously maintaining flexibility thus this study offers iv and cv managers several valuable insights first it argues that managers of each type of venture may need to pursue different strategies to increase venture performance and make optimal use of their unique resources furthermore it suggests that cv managers encounter difficulties in applying resources to strategies and not in accessing resources whereas political obstacles may occur cv managers may primarily encounter these difficulties when trying to implement strategies rather than when accumulating resources from the parent suggesting a pitfall that managers of cvs and their parents need to avoid although this study has indicated that both venture types can be equally successful it suggests that they may face different obstacles and follow different roads to success

dealing with resource disadvantage generic strategies for smes this paper identifies three generic strategies for smes taking into account explicitly their resource disadvantage in addition to the much advocated niching strategy we show that smes can free ride on the bigger firm s market development efforts and or they can form strategic alliances to force accommodation by the bigger rivals contrary to conventional arguments we show that success in niching is not conditional upon the continued ignorance of the niche by the bigger firms it is also not true that the smes must have a cost advantage vis a vis the bigger firms in order to niche or to free ride successfully the bigger firms faced with entry into their markets by smes encounter the classical chain store paradox the three generic strategies proposed here are designed to force accommodation by the bigger firms

ameliorating majority decisiveness through expression of preference intensity in pairwise voting when a simple majority rule produces a winner that winner is robust to the minority s preferences the typical means of protecting the minority from the decisiveness of the majority is by increasing the required majority or by augmenting the simple majority rule with constitutional constraints in the former case the required majority q becomes larger than one half and this implies that the q majority rule becomes biased in favor of one of the alternatives usually the status quo in the latter case the augmented rule becomes biased in favor of the minority the main issue examined in this paper is whether the amelioration of majority decisiveness can be attained by unbiased voting rules that allow some restricted expression of preference intensities our results clarify that the use of scoring rules provides a positive answer to the above question when voters resort to variable degrees of coordinated strategic voting the results are illustrated in the special cases of the plurality and the borda rules

strategies of high performing new and small firms a reexamination of the niche concept abstract entrepreneurs seeking to position new or small firms in industries populated by well established competitors are frequently advised to seek the protection of a market niche there shielded by market characteristics which render the niche uninteresting to larger rivals small firms are urged to compete at the fringe of the market this article challenges this conventional wisdom citing industry and firm characteristics which under certain conditions create opportunities for successful direct competition by some small or new firms against much larger and established competitors however the authors caution that the conditions which created the opportunity may erode in time rendering the successful challenger vulnerable either to retaliation by the larger firm or challenge from subsequent entrants examples of successful direct confrontation by relatively small competitors are drawn from mature low tech industries a rapidly growing high tech industry and the service sector

auctions with resale markets an application to u s forest service timber sales when bidders anticipate an opportunity for resale trade the value of winning an auction is determined in part by the option values of buying and selling in the secondary market one implication is that a bidder s willingness to pay at an auction increases with the expected level of competition between resale buyers empirical evidence from auctions of timber contracts supports this prediction and rejects standard models that ignore resale the estimated effect is smaller after policy changes expected to diminish the prevalence of resale additional evidence supports the predicted presence of a common value element introduced by the resale opportunity

the internationalization of new and small firms a resource based view abstract this paper seeks to enhance understanding of the internationalization of small and medium sized enterprises smes the study focuses upon the following issues can the characteristics of principal founders businesses and the external environment at one point in time be used to explain at a later date whether a firm is still an exporter or a nonexporter whether exporting firms are larger in size than nonexporting firms whether exporting firms report superior performance than nonexporting firms and whether exporting firms are more likely to survive than nonexporting firms to address these questions this study draws upon a sample of 621 manufacturing construction and services businesses located in twelve contrasting environments in great britain surveyed first in 1990 91 and then re interviewed in 1997 a resource based view is reviewed to identify the range of factors encouraging some owner managed smes to enter export markets four categories of human and financial capital are examined general human capital resources the principal founder s management know how the principal founder s specific industry know how and a principal founder s ability to obtain financial resources that can act as a buffer against random shocks variables relating to resource availability in the external environment were also collected and considered control variables previous studies have highlighted substantial industry differences in the propensity for businesses to enter export markets as well as to survive the principal industrial activity of each business in 1990 91 was therefore considered a control variable variables collected during the 1990 91 survey were selected to explain variations in the propensity to export reported by surviving independent firms in 1997 after elimination of missing values the working sample was reduced to 116 independent firms for this study 86 nonexporters and 30 exporters in 1997 in addition the 21 variables were selected to explain variations in business size in 1997 profit performance relative to competitors reported in 1997 changes in employment over the 1990 91 to 1997 period and business survival over the 1990 91 to 1997 period 213 survivors and 395 nonsurvivors multivariate statistical analysis confirmed that previous experience of selling goods or services abroad is a key influence encouraging firms to export businesses with older principal founders with more resources denser information and contact networks and considerable management know how are significantly more likely to be exporters further businesses with principal founders that had considerable industry specific knowledge are markedly more likely to be exporters businesses principally engaged in the service sectors and those located in urban areas are significantly less likely to be exporters a key finding of this study is that the explanatory variables significantly associated with the propensity to export sales abroad are not the same as those significantly associated with selected size and performance measures the resource based explanatory variables selected fail to significantly detect employment growing firms over the 1990 91 to 1997 period they also fail to significantly distinguish surviving independent firms from nonsurviving firms results from this study will provide policy makers and practitioners with additional insights into the key resource based factors associated with the decision by new and small independent firms to export sales abroad practitioners and policy makers can focus upon the characteristics of principal founders businesses and the external environment to predict the subsequent propensity of an independent firm to be an exporter policy makers and practitioners who want more new and small firms to export outside their local areas may prefer to target their resources and assistance to the relatively smaller proportion of firms that have the business and principal founder profiles that are significantly associated with a firm being an exporter

rationalizing choice with multi self models this paper studies a class of multi self decision making models proposed in economics psychology and marketing in this class choices arise from the set dependent aggregation of a collection of utility functions where the aggregation procedure satises some simple properties we propose a method for characterizing the extent of irrationality in a choice behavior and use this measure to provide a lower bound on the set of choice behaviors that can be rationalized with n utility functions under an additional assumption scale invariance we show that generically at most ve reasons are needed for every mistake

modeling new venture performance an analysis of new venture strategy industry structure and venture origin abstract this study examined the relative role of strategy industry structure and origin independent vs corporate or parental venture on the profitability and growth of 247 new ventures in two segments of the information processing industry computer related and communications related equipment manufacturing each of the 247 ventures was eight years old or less most previous research examining the role of these three factors in new venture performance has examined them singularly or in limited combinations with very few firms in their sample the theoretical agenda in this study was to advance this research stream by simultaneously examining origin strategy and industry structure as well as the interaction between strategy and industry structure using a large sample of new ventures the applications agenda in the study was to uncover patterns in the interactive role of strategy structure and origin that might provide meaningful insights to aid strategic decisions in new ventures from the theoretical perspective the study found that variability in new venture performance was better accounted for when all three factors were included in a statistical model overall these results suggested that new venture strategy and industry structure and their interaction are essential for understanding new venture performance while origin is secondary more important in explaining market share growth than higher profitability several study findings may be of interest to the practicing new venture strategist the study uncovered eight basic strategy patterns across the 247 firms a detailed description of these eight distinct patterns is provided in appendix a of this article overall performance results suggest that no one strategy is always the best new venture strategy but when we examined the fit of different strategies with different industry structures we were able to distinguish high from low performing new ventures dramatically in other words specific new venture strategies were very effective in some industry settings and ineffective in others for example new venture entrepreneurs were able to successfully enter and compete in high barrier industries by employing strategies emphasizing superior product quality and higher customer service alternatively when entry barriers were low strong marketing skills offered the best advantage the key to the success of these marketing oriented ventures was the establishment of a distribution system in which products were pulled through by their strong brand identification and name recognition these venture managers supported brand identification and name recognition with a high level of advertising and promotion experience and gave constant attention to adding new channels of distribution although earlier studies suggested that parented new ventures are more effective in achieving profitability origin was not a significant explainer of profitability for the new ventures in this study much has been written recently that argues for creating an entrepreneurial climate in a corporation many corporations have wholeheartedly embraced efforts to foster an independent spirit among parented ventures so much so that many corporations have attempted to replicate an independent climate in their corporate sponsored start ups rather than an origin difference between new ventures perhaps it is the difference in the climate or spirit of the venture or more specifically the manner in which the corporation manages the start up that accounts for profitability differences

filling the institutional void the social behavior and performance of family vs non family technology firms in emerging markets family businesses fbs are said to treat their employees with unusual consideration to form a cohesive internal community they are also claimed to develop deeper more extensive connections or relationships with outside stakeholders both behaviors may increase the viability of a business intended to support an owning family and its later generations such social linkages we believe may compensate for the lack of capital product and labor institutional infrastructures in dynamic emerging economies this survey study of a most challenging emerging market sector namely korean hightechnology businesses argues three major points 1 relationships of community and connection will be more common in fbs than in non fbs 2 these relationships will enhance performance in emerging market hightechnology sectors which because of their competitive complex and everchanging nature rely on significant expert knowledge and social capital within and outside the organizational community 3 the performance of fbs will benefit more from these community and connection relationships than the performance of non fbs because in these personally intimate settings employees and external partners will be especially likely to return the generosity of a visibly active owning family or to penalize its selfishness significant empirical support was found for most of these hypotheses

exclusive dealing through resellers in auctions with stochastic bidder participation this paper demonstrates that a seller prefers to exclude final consumers from an auction and sell only to resellers when these resellers can gain access at a cost to a sufficiently bigger market than the seller himself the intuition is that resellers recoup their expenses for marketing the item by reselling it to final consumers if some consumers participate in the first auction and are outbid by the resellers then their values for the item are relatively low outbidding part of their customer base is bad news for the resellers and this depresses their bids when consumers compete with them the socially optimal and revenue maximizing choices of auction format may not coincide restricting participation of consumers may be socially optimal but privately suboptimal and vice versa the results suggest that i the exclusion of final consumers in some auctions may not be driven by transaction cost considerations and ii sellers should not necessarily sell directly to consumers even though new technologies allow them to do so at essentially zero cost unless they can access a sufficiently large portion of the market

the responsiveness of approval voting comments on saari and van newenhizen saari and van newenhizen 1987 misinterpret their findings about the indeterminacy of voting systems far from being a vice indeterminacy is a virtue in allowing voters to be more responsive to and robbing them of the incentive to misrepresent their preferences the responsiveness of approval voting in particular means that the cardinal utilities that voters have for candidates can be reflected in voters strategy choices which ultimately translate into better social choices empirical data from a recent election support these claims showing among other things that the borda system a determinate voting system favored by saari and van newenhizen is highly vulnerable to manipulation by strategic voters

patterns of growth competitive technology and financial strategies in young ventures abstract young independent technology based ventures have an increasingly complex array of strategic choices about how they can grow while simultaneously competing on the basis of their technological capacity and skills in their markets given the central importance of these choices to the success of the venture there should be a close integral relationship among them similarly financial strategy choices also enter this relationship growth and competition place tremendous resource demands on the young technology based venture and financial strategy choices therefore must also be factored into the choice taking process the choice taking perspective is basic to this inquiry as other researchers have pointed out young entrepreneurial ventures typically do not utilize highly formalized strategic planning processes robinson and pearce 1983 strategy formation in such firms tends to be informal and episodic strategy may be revealed best through the pattern or set of choices taken at a point in time and over time from a choice taking perspective then the critical questions become the following a are there identifiable patterns of growth technology and financial choices b what factors shape or determine which choices are taken and c are these patterns related to venture performance these questions were explored by using data from a survey of 100 ceos of young independent technology based firms across three industries the results generally support the idea that patterns of choices can be identified several of these patterns are related to the ventures demographic characteristics such as form of ownership and scope of sales importantly stage of development was not related to those patterns nor to the performance of the ventures the highest performing ventures were found to be pursuing internal innovation through r d for product breakthroughs this finding is surprising since young ventures at the stage at which most were found in this sample would traditionally be expected to emphasize product extensions and modifications we need to better understand why young ventures would choose to innovate internally for breakthroughs in their growth stages and how well they are able to do so a major implication of this research is that the ceos of young technology based ventures are being presented with a much larger menu or array of choices at many points in time than conventional stage based models of venture development have postulated one explanation of this possibility is that the firm life cycle is being compressed by relatively new conditions such as the availability of more and earlier capital through joint venturing and alliances and shorter product life cycles indeed a follow up survey a year later with 77 ceos from this sample confirmed that joint ventures and alliances were the number one choice being pursued to gain access to distribution channels and new markets what is troubling about this possibility is that the skills and capacities of these young ventures may be limited in comparison with the richness and complexity of the available choices in the follow up survey the sources of information that were by far the most relied upon for strategic decision making were other internal senior managers and board members outsiders such as lawyers ranking distantly behind the leaders of these ventures need to be fully supported in evaluating negotiating and managing these often highly complex relationships