impact of adverse selection on managers project evaluation decisions agency theory can be used to explain decisions to continue a failing project the results of a decision making experiment provide empirical support for the proposition that when the conditions for adverse selection exist an agent has private information and an incentive to shirk such decisions apparently irrational from a principal s perspective may be rational from the agent s perspective the traditional approach to rational decision making derived from economic theory assumes a firm s managers will reach decisions that maximize the profitability of their firms managers should invest resources in the projects projected to provide the greatest profits to a firm and then periodically evaluate the economic performance of those projects they should continue the projects projected to be profitable and to avoid losses discontinue those projected to be unprofitable horngren foster 1991 366 380 1 prior research has provided empirical support for the proposition that managers who initiate projects that become unprofitable are more likely to continue supporting those projects than managers who did not initiate them arkes blumer 1985 staw 1976 1981 staw fox 1977 staw ross 1978 the rationale given for this seemingly irrational behavior is that the

national and organizational culture differences and international joint venture performance this study examines the effect of dimensions of national and organizational culture differences on international joint venture ijv performance based on data from a survey of executives from joint ventures between indian partners and partners from other countries we found that the presumed negative effect from culture distance on ijv performance originates more from differences in organizational culture than from differences in national culture

delay and settlement in litigation delay in litigation is a policy concern in many jurisdictions little evidence is available on the causes of such delay however we present a version of spier s 1992 bargaining model of litigation and derive directly a functional form for the conditional probability of case settlement we then estimate this and test predictions about the effects of legal costs and uncertainty over damages and liability on the conditional probability of settlement using data from negligence claims against several nhs trusts our results provide a direct test of the model and shed light on the causes of settlement delay in england

the supply of charity services by nonprofit hospitals motives and market structure this article studies provision of charity care by private nonprofit hospitals we demonstrate that in the absence of large positive income effects on charity care supply convex preferences for the nonprofit hospital imply crowding out by other private or government hospitals extending our model to include impure altruism rivalry provides a possible explanation for the previously reported empirical result that both crowding out and income effects on indigent care supply are often weak or insignificant empirical analysis of data for hospitals in maryland provides evidence of rivalry on the supply of charity care

hospital ownership and performance this study compares the performance of three ownership forms of hospitals for profit private nonprofit and public further classified according to whether or not the hospital is run by a hospital chain data come from a 1979 national survey of u s hospitals the authors find that hospital cost is quite similar among alternative ownership forms as is profitability the results do not provide much empirical support for standard property rights theory several reasons are suggested why this may be so

implicit understandings in channels of distribution formal agreements can be used to achieve coordination among channel members these agreements work by exerting explicit control over the members who make the agreements however implicit understandings can be used as a partial substitute for more formal agreements in this paper we show that implicit understandings can develop as channel members learn about each other s behavior we show that this learning leads to the use of the implicit influence each channel member has over the other s behavior the learning leading to an implicit understanding requires some form of experimentation or historical observation this learning results in an oscillating retail price when only one channel member learns the other s behavior both channel members obtain greater profits than when neither member learns and both channel members obtain less profits than when both members learn however the member who does not learn obtains more profits than the member who learns we also show that implicit understandings r

management ownership and market valuation an empirical analysis we investigate the relationship between management ownership and market valuation of the firm as measured by tobin s q in a 1980 cross section of 371 fortune 500 firms we find evidence of a significant nonmonotonic relationship tobin s q first increases then declines and finally rises slightly as ownership by the board of directors rises for older firms there is evidence that q is lower when the firm is run by a member of the founding family than when it is run by an officer unrelated to the founder

an econometric analysis of the european commission s merger decisions abstract using a sample of 96 mergers notified to the european commission and logit regression techniques we analyse the commission s decision process we find that the probability of a phase 2 investigation and of a prohibition of the merger increases with the parties market shares the probabilities increase also when the commission finds high entry barriers or that the post merger market structure is conducive to collusion we do not find significant effects of political variables such as the nationality of the merging firms

strategy and control in supplier distributor relationships an agency perspective this paper examines the influence of competitive strategy on the relationship between suppliers and their distribution networks drawing on agency theory hypotheses are developed specifying the appropriate match between manufacturer strategies and systems of control within distribution channels cluster analysis is used to show distinct differences in channel management and structure for the three generic strategies of cost leadership differentiation and focus results suggest that variation in control relationships may be explained by the demands posed by manufacturers competitive strategies this study therefore extends the applicability of porter s typology to the specific structure of distribution channels and shows that agency theory can provide insights into the economic basis of interorganizational relationships

quantifying the effects from horizontal mergers in european competition policy this paper starts from a recent case to study how merger analysis in europe may be potentially improved starting from the geographic market definition in the merger decision we formulate and estimate an oligopoly model with differentiated products based on the estimates we compare several alternative market power tests a hypothetical market power test an actual market power test and a comparative market power test our comparison of these alternative tests illustrates that the recently introduced empirical techniques need not be in conflict with traditional policy practices in europe but should be seen as a natural extension of commonly accepted principles furthermore we emphasize the importance of our dynamic comparative market power test in the european context according to this test the relevant point of comparison when assessing a merger is not the status quo but rather a relevant alternative merger scenario that is likely to happen in the event the merger is rejected in a european context the choice is often to accept a sequence of regionally based mergers or rather a sequence of pan european mergers finally we also emphasize the importance of constructing confidence intervals when computing the predicted merger effects especially if one is interested in testing the hypothesis that a merger has no effects

buyer seller negotiations around the pacific rim differences in fundamental exchange processes the determinants of buyer seller negotiations in four cultures are investigated in a laboratory simulation one hundred thirty eight american 54 chinese 42 japanese and 38 korean business people participated in a two person buyer seller intracultural negotiation simulation in negotiations between americans the use of more problem solving bargaining strategies positively influenced negotiation outcomes in negotiations between chinese more competitive strategies led to better results in japanese and korean negotiations buyers achieved higher economic rewards than sellers in all four cultures bargainers were more satisfied with negotiation outcomes when partners were rated more attractive

the marketing channel as an equilibrium set of contracts nash bargaining theory and recent developments in economic contract theory are employed in the analysis of the marketing channels individual dyadic contracts involving payment schedules between members of a simple 3 level channel are investigated with particular reference to monitoring problems and intrachannel power relations the interrelations between individual contracts are examined and the equilibrium set of contracts constituting the channel derived the performance of the channel in terms of risk sharing allocative efficiency and the distribution of gains is then evaluated it is found that the risk aversion of channel members and the cost of monitoring and enforcement affect channel efficiency and that under certain types of interdependencies and externalities the nature of the power structure is crucial to channel efficiency

managing channel profits a channel of distribution consists of different channel members each having his own decision variables however each channel member s decisions do affect the other channel members profits and as a consequence actions a lack of coordination of these decisions can lead to undesirable consequences for example in the simple manufacturer retailer consumer channel uncoordinated and independent channel members decisions over margins result in a higher price paid by the consumer than if those decisions were coordinated in addition the ensuing suboptimal volume leads to lower profits for both the manufacturer and the retailer this paper explores the problems inherent in channel coordination we address the following questions what is the effect of channel coordination what causes a lack of coordination in the channel how difficult is it to achieve channel coordination what mechanisms exist which can achieve channel coordination what are the strengths and weaknesses of these mechanism what is the role of nonprice variables e g manufacturer advertising retailer shelf space in coordination does the lack of coordination affect normative implications from in store experimentation can quantity discounts be a coordination mechanism are some marketing practices actually disguised quantity discounts we review the literature and present a simple formulation illustrating the roots of the coordination problem we then derive the form of the quantity discount schedule that results in optimum channel profits this article was originally published in marketing science volume 2 issue 3 pages 239 272 in 1983

abnormal returns and the regulation of nonprofit hospital sales and conversions during the 1990s concerns that nonprofit np hospitals were being sold at below market prices to investor owned io chains helped to prompt the widespread adoption of state laws regulating the sale and conversion of nonprofits in this paper we provide a simple test of under pricing using the io acquirer s abnormal stock market returns at the time of the acquisition prior to regulation we find that io chains did not earn abnormal returns from their acquisitions of nps and earned greater returns from purchasing other io and privately owned hospitals in states that subsequently adopted regulations acquisition activity slowed significantly and acquirer returns became negative efficient markets theory suggests that absent regulation expected merger synergies were already being transferred to the np target and that regulation may have reduced expected synergies or increased the costs of acquiring np hospitals

cross cultural interaction the international comparison fallacy international management studies have been based primarily on the comparison of managerial behavior in countries around the world often these studies have implied that business people behave similarly with their domestic colleagues as with their foreign counterparts in questioning that assumption this study tests whether intra cultural behavior accurately predicts cross cultural behavior using a negotiation simulation and a sample of 462 japanese american and canadian businesspeople behaviors in cross cultural negotiations were found to differ in some important ways from those in intra cultural negotiations

the social role of not for profit organizations hospital provision of charity care during the 1980s the state of new york shifted from a straight block grant to a matching grant method for reimbursing hospitals with the matching rate varying from 0 to 75 percent across years these changes allow estimation of pure income and price effects for hospitals supply of uncompensated care charity and bad debts the price efrect is positive and significant but no income effect was found hospitals in more concentrated markets provide more charity care as do teaching hospitals and the presence of public hospitals in a market reduces private hospitals provision of charity care

the revealed objective functions of nonprofit firms although assertions have often been made about the objectives underlying the behavior of nonprofit firms there has been no empirical confirmation of these assertions this article proposes a way to infer a nonprofit organization s objective function by estimating the marginal donative product of its fundraising panel data estimates derived by using hildreth and houck s 1968 random coefficients model suggest that welfare education and arts firms are service maximizers that health firms are budget maximizers and that the objective of research firms cannot be ascertained within the family of objective functions considered

do firms learn to create value the case of alliances we investigate whether firms learn to manage interfirm alliances as experience accumulates we use contract specific experience measures in a data set of over 2000 joint ventures and licensing agreements and value creation measures derived from the abnormal stock returns surrounding alliance announcements learning effects are identified from the effects of unobserved heterogeneity in alliance capabilities we find evidence of large learning effects in managing joint ventures but no such evidence for licensing contracts the effects of learning on value creation are strongest for research joint ventures and weakest for marketing joint ventures these results are consistent with the view that learning effects are more important in situations characterized by greater contractual ambiguity copyright 2000 john wiley sons ltd

litigation and settlement an empirical approach litigants in civil lawsuits involving monetary damages often find an out of court settlement preferable to a trial most theoretical models of settlement choice employ an expected utility maximizing framework that emphasizes the importance of risk preferences litigation costs and the distribution of trial awards an empirical model of settlement choice is used to examine whether the variables prominent in the theoretical literature are statistically useful in explaining the occurrence and monetary value of settlements estimates from a sample of civil filings provide new empirical evidence of how the legal system affects the behavior of litigants during the settlement process copyright 1989 by mit press

bargaining with incomplete information an infinite horizon model with two sided uncertainty the resolution of any bargaining conflict depends crucially on the relative urgency of the agents to reach agreement and the information each agent has about the others preferences this paper explores within the context of an infinite horizon bargaining model with two sided uncertainty how timing and information affect the rational behaviour of agents when commitment is not possible since the bargainers are uncertain about whether trade is desirable they must communicate some of their private information before an agreement can be reached this need for learning due to incomplete information about preferences results in bargaining inefficiencies trade often occurs after costly delay thus the model provides an explanation for the inefficient bargaining behaviour that appears to occur often in practice

a typology of management studies involving culture as a methodological review this paper delineates 6 approaches to researching cross cultural management issues parochial ethnocentric polycentric comparative geocentric and synergistic for each approach assumptions are discussed concerning the similarity and difference across cultures and the extent to which management phenomena are or are not universal the primary types of management questions which can be addressed using each approach are clarified main methodological issues which must be addressed are listed

plea bargaining and prosecutorial discretion a model of plea bargaining with asymmetric information is presented the prosecutor s private information consists of the strength of the case while the defendant s private information consists of h is guilt or innocence in equilibrium a fraction of cases are dismis sed because they are too likely to involve an innocent defendant in the remaining cases the prosecutor s offer of a sentence in exchange for a plea of guilty reveals the strength of the case it is shown t hat unlimited prosecutorial discretion may be socially disadvantageou s since it carries with it the requirement of sequential rationality copyright 1988 by american economic association

the timing of out of court settlements parties to a lawsuit will frequently delay litigation even in circumstances where a voluntary agreement is eventually reached this article is concerned with what causes legal disputes to be prolonged over time we discuss dynamic models of litigation to illustrate how changes in the bargaining environment might generate empirical hazard functions comparative statics results are then corroborated with empirical estimates of a hazard function adjusted to account for both the heterogeneity of lawsuits and the nonproportional time dependence suggested by theory

exploring relationship satisfaction between global professional service firms and local clients in emerging markets extending the perspective of agency theory this study incorporates both professional and local knowledge asymmetry into a model of relationship satisfaction between global professional service firms and their local clients the model also includes learning orientation and adaptation that are theorized to regulate the impact of knowledge asymmetry on goal incongruence which ultimately affects relationship satisfaction china was selected as the setting of the study because it is the largest emerging market has seen double digit growth of advertising expenditures for the past two decades and is home to many multinational advertising agencies that have increasingly pursued local clients as revenue sources multiple informants from 177 domestic chinese firms and their multinational advertising agencies were personally interviewed and the dyadic data were used to test the model results show that both types of knowledge asymmetry lead to goal incongruence which causes client dissatisfaction the role of learning orientation varies as does the role of adaptation in moderating the impact of knowledge asymmetry on goal incongruence and the impact of goal incongruence on relationship satisfaction theoretical and managerial implications of the findings are discussed along with the limitations of the study and future research directions

managing foreign subsidiaries agents of headquarters or an interdependent network in this study two different theoretical perspectives are used to develop sets of hypotheses regarding the mechanisms used to manage foreign subsidiaries of multinational corporations first agency theory serves as the basis for a model that predicts the use of monitoring mechanisms and incentive compensation then it is argued that these mechanisms are insufficient for managing subsidiaries characterized by high levels of intra firm international interdependence the management of which is critical to many of today s complex global firms a second set of hypotheses is argued linking international interdependence to several social control mechanisms primary and secondary data from u s based multinational corporations were used to test both sets of hypotheses the results indicate that agency theory although a useful foundation for studies of control within mncs is limited in its ability to explain fully the phenomenon of foreign subsidiary control however the model based on intra firm interdependence had much greater predictive ability copyright 2000 john wiley sons ltd

escalation errors and the sunk cost effect an explanation based on reputation and information asymmetries this paper is concerned with explaining a paradox of human behavior consider the following example a department manager makes a large investment in new production equipment and soon after learns of different equipment that could perform the same operations at lower cost incremental analysis favors switching but the manager refuses saying he does not want to waste the investment already made such real world examples have been extensively documented and studied by social scientists see thaler 1980 and staw 1981 in these examples the decision maker having commited to a course of action subsequently discovers new information that indicates that continuing the earlier commitment would likely result in worse consequences than switching in spite of this he clings to and even escalates his earlier

the dynamics of pretrial negotiation it is shown that many cases proceed to court despite ample opportunity for interaction and much of the settlement takes place on the courthouse steps the deadline effect when fixed costs of bargaining are introduced a u shaped pattern of settlement appears with a greater chance of settlement at the beginning and at the end of negotiations than in the middle these characteristics persist even as the time between offers approaches zero the theoretical predictions are consistent with the stylized facts a large proportion of the lawsuits that are settled out of court are settled very close to the trial date or in the first several days of the trial 3 although the deadline effect appears in many other settings as well it has little theoretical support 4

early settlement in european merger control we analyse the determinants of early settlement between merging parties and the european commission over remedies that remove concerns of anticompetitive effects this extends the previously narrow range of econometric literature on early settlement consistent with the theory of early settlement our results confirm the importance of delay costs and of uncertainty measured by the complexity of the economic analysis required for each merger we also find a non monotonic effect of agency resourcing which raises questions about the commission s efficiency in times of high case load econometrically we select a sample of merger decisions in which the european commission intervened due to concerns of anticompetitive effects and our selection model provides estimates of the factors determining intervention by the commission conclusions are drawn for public policy

the influence of retail management s use of social power on corporate ethical values employee commitment and performance recent cases in retailing reflect that ethics have a major impact on brands and performance in turn demonstrating that brand owners employees and consumers focus on ethical values in this study we analyze how various sources of social power affect corporate ethical values retailer s commitment to the retail organization and ultimately sales and service quality multi source data based on a sample of 225 retailers indicated a strong link between power ethics and commitment and that these affected output performance

the study of international business a plea for a more interdisciplinary approach scholastic efforts to study and teach international business is entirely dependent on our capability to marshal and organise the necessary human and other assets so as to supply a range of end products which are acceptable to the academic community of which we are part our paymasters and the main purchasers of our products viz the business community of course the determinants of success of the practice and study of ib are interrelated and in our particular pursuit for excellence there is no unique or sure fire recipe for success but i observe that in an ever increasingly complex world of international business which is dominated by rapid and far reaching changes in technology and by environmental turbulence this is no less true of successful practitioners rarely in seeking to identify the reasons for business achievement is one able to find a single common denominator sometimes excellence is primarily based on innovatory ingenuity sometimes on the access to or control of key inputs or markets sometimes on aggressive or novel methods of advertising and marketing sometimes on super efficient capital budgeting sometimes on dynamic and imaginative entrepreneurship sometimes on the diversity of operational experiences and capabilities and sometimes on an unusual aptitude to manage human relationships but in most cases success is founded on some amalgam of these and it is the way in which these discrete though increasingly interdependent advantages are ombined with each other and with complementary assets in different countries and cultures which contemporary research suggests is the key competitive advantages of international firms call it what you will e g

customer involvement and service firm internationalization performance an integrative framework to overcome the costs of doing business abroad researchers have suggested either legitimacy or efficiency based solutions however both types of solutions still treat host country customers as external to the theory we highlight the role of customers in the international professional business service setting and argue that customer involvement is positively related to the perceived internationalization performance of multinational corporations mncs mncs with managers who perceive higher legitimacy pressures and greater needs for local knowledge tend to undertake greater efforts to build customer involvement furthermore we develop a configuration framework between perceived strategic needs and mncs capabilities specifically mncs that match relational capability with legitimacy needs and absorptive capacity with knowledge needs are more likely to engage in customer involvement our survey of 175 chinese mncs provides evidence that customer involvement is positively related to perceived internationalization performance when mncs relational capabilities are stronger the positive relationship between legitimacy pressure and customer involvement increases by contrast mncs with greater perceived market ambiguity improve customer involvement only when they have stronger absorptive capacity we conclude that mncs may simultaneously reduce legitimacy and efficiency costs through customer involvement after considering the fit between perceived environmental pressures and firm capabilities

claim efficiencies or offer remedies an analysis of litigation strategies in ec mergers efficiency defence and merger remedies are key components in most merger control regimes although in many jurisdictions both the provision of efficiency related evidence and remedy offers are at the merging firms discretion most previous works have only analysed them separately this paper is an attempt to empirically model the system of decisions that firms face in merger litigation where they are allowed to choose what combination of efficiency claims and settlement offers to make the main novelty of this work is the use of data from company reports on the merger generated synergy expectations signalled to shareholders which allows the direct empirical testing of some of the assumptions and findings from previous works evidence is presented that the current ec merger control regime is incapable of extracting information from firms on their efficiency expectations and the identity and experience of the legal advisor plays a key role in this that pre merger synergy expectations enhance the willingness to offer remedies and finally that the cost of delay plays a central role in designing firms litigation strategy especially when these costs exceed the cost of the remedy

diagnosing measurement equivalence in cross national research many researchers have pointed out that it is necessary to ensure measurement equivalence in cross national comparative research three aspects of measurement equivalence translation metric and calibration equivalence are necessary to establish the cross national reliability and validity of items used to measure theoretical constructs this paper discusses these issues and proposes two recently developed empirical techniques multiple group lisrel and optimal scaling for use in diagnosing cross national measurement equivalence these techniques are illustrated by reanalysis of a pioneering u s and japanese study the two techniques yield convergent results indicating measurement equivalence for some but not all ordinal level items under consideration the findings demonstrate that the proposed methods are useful diagnostic tools for exploring measurement equivalence several suggestions for reducing the likelihood of problems with measurement equivalence and a number of methods for dealing with items where lack of equivalence persists are also discussed

does it matter who your buyer is the role of nonprofit mission in the market for corporate control of hospitals abstract the hospital industry is one of this country s largest mixed industries with for profit nonprofit and government hospitals operating in the same local markets but how do ownership types differ previous studies have compared costs among different hospitals however these studies have not been entirely successful because costs cannot be meaningfully compared without controlling for hard to measure quality of service in this study we look to the market for corporate control or takeovers for evidence of ownership related differences we find that nonprofit and for profit firms pay different prices and that these differences relate to the nonprofit s mission specifically nonprofits and for profits pay the same price when buying for profits but nonprofits pay less when buying a like minded nonprofit so religious nonprofits pay less for other religious nonprofits for example the resulting dual price equilibrium suggests that nonprofits have a different objective than do for profits but

religiosity and state welfare abstract the catholic sex abuse scandals reduced both membership and religiosity in the catholic church because government spending on welfare may substitute for the religious provision of social services we consider whether this plausibly exogenous decline in religiosity affected several measures of the public taste toward government and spending on welfare between 1990 and 2008 in places where there were more scandals individuals state a preference for less government provision of social services in contrast a higher level of abuse is also associated with an increase in voting for democratic candidates for president state legislatures and the us house of representatives and an increase in per capita government welfare spending although this increase is insufficient to replace the decrease in catholic provided charity

fighting city hall entry deterrence and technology upgrades in cable tv markets this article investigates how private firms respond to potential entry from public firms this paper uses a data set of over 3 000 u s cable tv systems to present evidence consistent with entry deterrence incumbent cable tv firms upgrade faster when located in markets with a potential municipal entrant however the same systems are then slower to offer new products enabled by the upgrade suggesting upgrades in these markets occur for strategic reasons incumbent cable systems also upgrade faster in response to municipal entry threats than to private entry threats understanding how private firms respond to potential entry from public firms is especially important in light of recent u s government entry into several industries this paper was accepted by bruno cassiman business strategy

modes of foreign entry a transaction cost analysis and propositions a frontier issue in international marketing is the appropriate choice of entry mode in foreign markets the objective of this paper is to offer a transaction cost framework for investigating the entry mode decision this framework provides 1 a theoretical basis for systematically interrelating the literature into propositions 2 propositions about interactions which resolve the apparently contradictory arguments advanced to date specifically the paper illustrates the feasibility of clustering 17 entry modes into the degree of control the mode provides the entrant proposes that the most appropriate i e most efficient entry mode is a function of the tradeoff between control and the cost of resource commitment advances testable propositions delimiting the circumstances under which each mode maximizes long term efficiency

circadian rhythms the effects of global market integration in the currency trading industry this essay assesses the impact of global market integration in the currency trading industry as the market interfaces with states with firms and with individuals and raises questions for research from a variety of disciplines issues discussed include the question of state control in global markets the impact of globalization on firm structures and processes how firms can derive competitive advantage from global circadian rhythms and the influences of the circadian rhythms of the global market on the individuals who work in this industry

brazilian japanese and american business negotiations the determinants of the outcomes of business negotiations in 3 cultures are investigated in a laboratory experiment the outcomes of negotiations between japanese businessmen result primarily from a situational constraint the role of the negotiator buyer or seller representational problem solving oriented bargaining strategies a measure of the process of the interaction is the most important variable in american negotiations in negotiations between brazilian business people deceptive bargaining strategies also a process measure is the key variable affecting outcomes

the hunt vitell general theoryof marketing ethics can it enhance our understanding of principal agent relationships in channels of distribution this paper advances the hunt vitell general theory of marketing ethics as a framework for enriching current understanding of both long term marketing relationships in general and principal agent associations specifically under economic models of agency theory manufacturer distributor relationships are conceptualized as principal agent associations where both parties are assumed be motivated exclusively by short term financial self interest within the logical constraints of zero sum game conditions as a general model of ethical decision making and behavior in marketing the hunt vitell theory illustrates how ethical decisions are predicated not only upon estimations of potential benefits or outcomes using teleological criteria but also deontological evaluations which invoke norms and values furthermore the recent ideas advanced in relationship marketing perspectives suggest that distribution channel associations premised upon non zero sum or symbiotic assumptions may be more effective and more jointly profitable based upon the hunt vitell model propositions are formulated that complement the understanding of agency theory within the context of marketing channel relationships and thus may represent a basis for more effective agency selection and interaction in marketing practice

project escalation and sunk costs a test of the international generalizability of agency and prospect theories previous north american research suggests that aspects of agency theory and prospect theory may explain decisions to escalate commitment to failing projects this study explores the universality of these theories in this context the willingness of north american and asian managers to escalate commitment to losing projects was measured using four go no go decision cases we hypothesized that asian managers would be less willing to act in their self interest a lower agency effect and would be more willing to escalate a decision in the face of negative framing a stronger framing effect we found that agency theory had strong explanatory power for project in our asian sample framing effects were significant in both but they were not significantly different

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

understanding the domain of cross national buyer seller interactions cross national face to face selling has thus far received very little scholarly treatment in marketing literature with few notable exceptions most existing research in this area has been fragmentary and opportunistic these problems are largely because of the lack of a broad generalizable framework within which to conceptualize and execute research studies in offering such a conceptual framework this article looks at buyer seller interactions from a communication perspective

art of the deal the merger settlement process at the federal trade commission 1 introductiontwo firms competing with each other in at least one line of business face a complicated regulatory regime if they attempt to merge under the hart scott rodino hsr act of 1975 almost all large transactions in the united states are subject to review by either the department of justice or the federal trade commission ftc in the event an enforcement agency objects to the transaction several outcomes are possible i the parties could give up and abandon their transaction ii take the case to a federal court and litigate the dispute to a conclusion or iii the firms could settle their differences with the enforcement agency all settlements however are not the same in particular agencies have shown some willingness to accept compromise settlements defined here as consents that do not fully resolve the relevant competitive concerns the purpose of this study is to model the interaction between an antitrust agency and firms seeking to consummate mergers in doing so we will attempt to answer an important question in antitrust regulation what attributes drive the final outcome of a merger challenge this paper will model interactions between the ftc and private parties interested in consummating horizontal mergers that may adversely affect competition in at least one relevant market this decision to fight fold or settle is somewhat more complicated than an action for damages because the prospective nature of the alleged competitive injury gives the defendant an opportunity to abandon the transaction before the injury occurs moreover the conglomerate nature of most mergers creates a possibility for a strong settlement to resolve competitive concerns while allowing the firm to quickly consummate the innocuous portions of the transaction compromise settlements also are possible under which the consent offers partial relief the maximum likelihood estimation procedure used in the paper is derived directly from a game theoretic analysis that models the outcome of the interaction between merging firms and the ftc this allows for formal estimation of utility functions for both merging parties and the ftc estimating the structural equations of the model offers more detailed insight into the regulatory system we have two basic hypotheses with respect to this process first the underlying opportunity costs the legal merits of particular cases and possibly the political ramifications of enforcement decisions drive ftc decisions second firms decisions depend not only on the competitive merits of the ftc s case but perhaps more importantly on both the financial issues relevant to the specific transaction and how the nature of the case fits into the merger review process section 2 presents the background for the analysis by discussing the institutional structure of the ftc explaining the merger review process describing the hostage effects that may affect a firm s response to an ftc enforcement decision and introducing the idea of a compromise settlement section 3 models the game theoretic interaction between firms and the ftc and then explores an econometrically tractable method of estimating the underlying utility functions for the players in the game section 4 describes the data and specifications to be used results of the maximum likelihood estimation are presented in section 5 concluding comments are in section 6 we hope to shed light on an important aspect of the u s merger review process we also suggest that our results may have broader consequences since the mid 1980s a large number of countries have established formal antitrust procedures the results here may be of assistance to those policy regimes as well 2 issues in merger enforcementbackground on the ftcthe ftc is a government agency charged along with the department of justice doj with enforcing u s antitrust laws the bulk of the casework involves the evaluation of proposed horizontal mergers

the relationship between international diversification and performance in service firms international diversification is a growth strategy that has a major potential impact on firm performance the relationship between international diversification and firm performance has been extensively studied in the international strategy literature a major gap in the literature has been the non existence of studies that have examined the effect of international diversification on performance in service firms previous studies that have tested the international diversification performance relationship were based on samples of manufacturing firms we argue that the form of the relationship between multinationality and performance is different in service firms we provide a theoretical argument for this claim and hypothesize that there is a u shaped curvilinear relationship between multinationality and performance in service firms our sample consists of 81 major german service firms spanning across four industries results show that there is support for a u shaped curvilinear relationship based on the findings implications and directions for future research are provided

a multistage model of bargaining this paper presents a simple multistage model of bargaining wherein a seller makes an offer that can be either accepted or refused if rejected the process continues how the seller s ability to make commitments affects bargaining outcomes is analysed by comparing the commitment equilibria to those arising when commitment is impossible the effects of increasing uncertainty about preferences and varying the length of the bargaining horizon are analysed the ways in which the bargaining environment can be changed to improve outcomes are discussed

sequential bargaining with incomplete information this paper describes a simple two person two period bargaining game and solves it using the concept of perfect bayesian equilibrium in which the actions of each player convey information which is used by his opponent the paper examines the effects of changes in bargaining costs the size of the contract zone and the length of the bargaining process on such aspects of the solution as the probability of impasse and the likelihood of concessions the combination of information transfer and the lack of pre commitment embodied in perfectness yields many surprising results common perceptions about the effects of parameter changes on bargaining processes are suspect and should be checked in the particular game being discussed

antitrust settlements and trial outcomes risk aversion plays an important role in explaining why antitrust cases settle instead of going to trial using a jointly estimated model of settlement and trial outcome the authors find that a one percent increase in the probability that the plaintiff wins at trial raises the probability of a settlement by 0 13 percent they also find that reputation effects are not a significant factor for defendants so the risk aversion of the defendants does not play a dominant role in determining whether the parties settle plaintiffs are more likely to win in certain jurisdictions which encourages venue shopping by plaintiffs copyright 1996 by mit press