robust dynamic estimation managing marketing resources over time requires dynamic model estimation which necessitates specifying some parametric or nonparametric probability distribution when the data generating process differs from the assumed distribution the resulting model is misspecified to hedge against such a misspecification risk the extant theory recommends using the sandwich estimator this approach however only corrects the variance of estimated parameters but not their values consequently the sandwich estimator does not affect any managerial outcomes such as marketing budgeting and allocation decisions to overcome this drawback we present the minimax framework that does not necessitate distributional assumptions to estimate dynamic models applying minimax control theory we derive an optimal robust filter illustrate its application to a unique advertising data set from the canadian blood services and contribute several novel findings we discover the compensatory effect advertising effectiveness increas

is there a winner s curse in the labor market abstract when a firm can make counteroffers to workers who have received outside wage offers a winner s curse effect may exist raided firms do not make counteroffers to those whose value is less than the raider s wage offer so the raider always earns negative profit when a raid is successful in this paper i demonstrate that when a raided firm makes reassignment decisions in anticipation of outside wage offers and there is at least an infinitesimal probability of exogenous turnover a winner s curse will not occur when there are counteroffers except possibly for workers at the lowest task assignment

standard promotion practices versus up or out contracts this article develops a theory concerning the choice between standard promotion practices and up or out contracts our theory is based on asymmetric learning and promotion incentives we find that firms employ up or out contracts when firm specific human capital is low and standard promotion practices when it is high we also find that if commitment to a wage floor is feasible and effort provision is important up or out is employed when low and high level jobs are similar these results are consistent with many of the settings in which up or out is typically observed such as law firms and academia

endogeneity in brand choice models applications of random utility models to scanner data have been widely presented in marketing for the last 20 years one particular problem with these applications is that they have ignored possible correlations between the independent variables in the deterministic component of utility price promotion etc and the stochastic component or error term in fact marketing mix variables such as price not only affect brand purchasing probabilities but are themselves endogenously set by marketing managers this work tests whether these endogeneity problems are important enough to warrant consideration when estimating random utility models with scanner panel data our results show that not accounting for endogeneity may result in a substantial bias in the parameter estimates

counteroffers and efficiency in labor markets with asymmetric information this article considers the effect of offer matching on labor market outcomes when the current employer has better information about his worker s productivity than potential employers previous research found that when current employers have better information than potential employers the latter use job assignment to infer an employed worker s qualifications as a result assignment of workers to jobs is inefficient i find that when current employers can match outside offers the equilibrium outcome may be efficient i analyze the effect of the asymmetric information on investment in human capital made by employers and workers and find these investment levels to be first best

order of entry as a moderator of the effect of the marketing mix on market share order of entry has been demonstrated to have a significant effect on market share a number of explanations for this effect have been suggested in the marketing and strategy literatures to date the market share advantage gained by pioneers has typically been treated as a main effect an automatic regularity treating order of entry as a main effect implies that there is no penalty on the effectiveness of a brand s marketing instruments for late entry and that a late entrant can compensate for being late by dedicating sufficient marketing resources to their product in this study we investigate the influence of order of entry into a market on the effectiveness of a firm s marketing mix decisions by asking the question can followers compensate for not being first by their marketing mix decisions also even if they can compensate for being late does this effort become increasingly more difficult with later entry that is are there asymmetries in the effectiveness of a brand s marketing mix variables that relate to its order of entry into the market or as has been typically assumed to date is order of entry strictly a main effect an asymmetry exists for example if the market response to advertising is different for the first entrant versus the second or third entrant an asymmetry also exists if the effects of say a price change by the first entrant on the second entrant are different than the effects on the third entrant we develop a market share attraction model where the parameters vary as a function of order of entry our main contribution is in modeling the sources of order of entry advantage as asymmetries in the effectiveness of a brand s marketing instruments hence distinct from previous research we explain why there are inherent order of entry effects this paper is potentially of interest to researchers developing market share models and studying the effectiveness of marketing mix variables the substantive implication of our results concern directly academics interested in marketing strategy as well as the practicing marketing strategists we model asymmetries in the market response of early entrants versus late entrants using data from two durables and three nondurables categories with one exception all data sets are established from the inception of the category and hence do not suffer from the possible bias of excluding pioneers who have failed results show that asymmetries in the effectiveness of a brand s marketing mix variables are an essential source of order of entry effects we find that the main effects of order of entry are minimal order of entry effects do not necessarily lead to lower shares but overcoming these effects is not without substantial cost to the late entrant our results support previous research that has demonstrated advantages to early entry in addition we provide guidelines for how late entrants should compete later entry tends to reduce a competitor s price sensitivity suggesting that they not instigate in a price war with earlier entrants in order to gain share order of entry tends to decrease response to quality and to promotion to achieve the same impact on market share later entrants need a bigger change in quality and need to spend more on promotion our data did not support an asymmetric effect on advertising

attraction versus linear and multiplicative market share models an empirical evaluation linear and multiplicative market share models are compared with the attraction specification on the basis of both predictive and descriptive measures the data used represent 15 brands in three dif

customized advertising via a common media distributor we show that when a single media content distributor such as a television cable company or an internet provider delivers advertising messages on behalf of multiple competing brands it can sometimes utilize customized advertising to implement monopoly pricing even though such monopolistic pricing can be implemented with varying degrees of customization of commercials product revenues and consumer surplus are highest when the distributor chooses the highest level of customization feasible consumers would obviously prefer aggressive price competition in product markets however given that collusion on prices is facilitated anyway when the distributor acts as a common agent the welfare of consumers is enhanced when commercials are better aligned with their preferences

promotion turnover and discretionary human capital acquisition this article explores human capital acquisition decisions when job placement helps determine competition for a worker with asymmetric information workers may invest in firm specific capital without long term contracts specific investment increases promotion chances and hence wage competition shifting competition back to a time when firms are symmetrically uninformed if general human capital is the efficient output maximizing investment then an equivalent firm specific investment maximizes expected career wages this is a general result for sellers in second price auctions sellers of labor invest to maximize the expected second highest bidder valuation wage not the winner s expected valuation

the effect of advertising on the distribution free newsboy problem abstract advertising is very important for the newsboy problem because the shelf life of the newsboy product is short and advertising may increase sales to avoid overstocking in this paper models to study the effect of advertising are developed for the distribution free newsboy problem where only the mean and variance of the demand are known as in khouja and robbins 2003 it is assumed that the mean demand is an increasing and concave function of advertising expenditure three cases are considered 1 demand has constant variance 2 demand has constant coefficient of variation and 3 demand has an increasing coefficient of variation this paper provides closed form solutions or steps to solve the problem numerical results of the model are also compared with those from other papers the effects of model parameters on optimal expenditure on advertising optimal order quantity and the lower bound on expected profit are derived or discussed

promotions and wage growth this article presents evidence that internal mobility defined as a promotion or other position change is an important source of wage growth it accounts for approximately 15 of wage growth over the life cycle for white and black men but less for women the incidence of promotions and other position changes appears tied to the wage level better paid workers are more likely to be promoted the life cycle incidence of internal mobility looks similar to that for conventionally defined job mobility most moves are made early in the career mobility declines both with time in position and with experience

the shape of advertising response functions revisited a model of dynamic probabilistic thresholds prior work in marketing has suggested that advertising threshold effects levels beneath which there is essentially no sales response are rarely encountered in practice because advertising policies settle into effective ranges through early trial and error thresholds cannot be observed directly and arguments for their existence must be based primarily on a statistical footprint that is on relative fits of a range of model types to detect possible threshold effects we formulate a switching regression model with two regimes in only one of which advertising is effective mediating the switch between the two regimes is a logistic function of category specific dynamic variables e g order of entry time in market number of competitors and advertising levels nesting a variety of alternative formulations among them both standard concave and s shaped responses a sequence of comparisons among parametrically related models strongly suggests that threshold effects exist that market share response to advertising is not necessarily globally concave that superior fit cannot be attributed to model flexibility alone and that dynamic environmental competitive and brand specific factors can influence advertising effectiveness these effects are evident in two evolving durables categories suvs and minivans although not in the one mature nondurable category liquid detergent studied

a theory of wage and promotion dynamics inside firms we show that a framework that integrates job assignment human capital acquisition and learning captures several empirical findings concerning wage and promotion dynamics inside firms including the following first real wage decreases are not rare but demotions are second wage increases are serially correlated third promotions are associated with large wage increases fourth wage increases at promotion are small relative to the difference between average wages across levels of the job ladder fifth workers who receive large wage increases early in their stay at one level of the job ladder are promoted quickly to the next

how many winners are good to have on tournaments with sabotage abstract from an employer s perspective a tournament should induce agents to exert productive activities but refrain from destructive ones we experimentally test the predictive power of a tournament model which suggests that within a reasonable framework productive and destructive activities are influenced neither by the number of agents taking part in the tournament nor by the fraction of the winner prizes our results clearly confirm that sabotage in tournaments indeed occurs while tournament size has virtually no effect on behavior a balanced fraction of winner and loser prizes appears to enhance productive activities

worker allocation hierarchies and the wage distribution economists have traditionally viewed the allocation of workers among jobs through the concept of comparative advantage this paper investigates hierarchical production models which display an absence of comparative advantage in order to demonstrate that for hierarchical production there is a second allocating factor which plays an important role two results are found first the allocation of workers among jobs tends to match high ability workers with positions which value ability highly second despite the fact that the models display an absence of comparative advantage i e the standard theoretical explanation for why wage distributions might be skewed the models wage distributions are skewed to the right relative to the underlying ability distributions

on the complexities of complex economic dynamics complex economic nonlinear dynamics endogenously do not converge to a point a limit cycle or an explosion their study developed out of earlier studies of cybernetic catastrophic and chaotic systems complexity analysis stresses interactions among dispersed agents without a global controller tangled hierarchies adaptive learning evolution and novelty and out of equilibrium dynamics complexity methods include interacting particle systems self organized criticality and evolutionary game theory to simulate artificial stock markets and other phenomena theoretically bounded rationality replaces rational expectations complexity theory influences empirical methods and restructures policy debates

dynamic optimal control models in advertising recent developments this paper presents a review of recent developments that have taken place in the area of dynamic optimal control models in advertising subsequent to the comprehensive survey of the literature by sethi in 1977 the basic problem underlying these models is that of determining optimal advertising expenditures and possibly other variables of interest over time for a firm or a group of competing firms under consideration this optimization is done subject to some dynamics that define how these variables translate into sales and in turn into profits the purpose of this update is twofold on the one hand new contributions in the areas already treated in the earlier survey are reviewed on the other hand new trends in the advertising literature since 1977 such as quality as an additional marketing instrument cumulative sales models pulsing advertising and advertising as a part of corporate models of the firm are discussed the models covered in this update are organized under six headings models with ca

imperfections in labor markets and the scope of the firm abstract results are derived showing how the interaction of adverse selection and worker uncertainty about job preferences creates incentives for firms to offer a wider array of jobs or integrate the equilibrium wage structure is characterized non integrated firms make retention wage offers increasing in ability while integrated firms do not a generalization in which costs to integration are relevant is then suggested results indicate that it is the interaction between adverse selection and uncertain preferences that leads to a second period allocation of workers across jobs that is not first best but is second best they also show why the presence of adverse selection and uncertain preferences create a tendency toward a scope of integration broader than the first best outcome

job assignments signalling and efficiency this article analyzes a model in which information about a worker s ability is only directly revealed to the firm employing the worker other firms however use the worker s job assignment as a signal of ability three results recur throughout the analysis first wage rates tend to be more closely associated with jobs than with ability levels second there is frequently an inefficient assignment of workers to jobs i e even when a firm has complete information about a worker s output third the severity of this inefficiency tends to be negatively correlated with the level of firm specific human capital in the economy

practice prize reports the practice prize reports consist of one article with two parts as follows sinha ashish j jeffrey inman yantao wang joonwook park attribute drivers a factor analytic choice map approach for understanding choices among skus and tellis gerard j rajesh k chandy deborah macinnis pattana thaivanich modeling the microeffects of television advertising which ad works when where for how long and why

semiparametric analysis to estimate the deal effect curve abstract the marketing literature suggests several phenomena that may contribute to the nature of the relationship between sales and price discounts these phenomena can produce complex nonlinearities and interactions in the deal effect curve that are best captured with a flexible approach because a fully nonparametric regression model suffers from the curse of dimensionality the authors propose a semiparametric regression model store level sales over time are modeled as a nonparametric function of own and cross item price discounts and a parametric function of other predictors the authors compare the predictive validity of the semiparametric model with that of two parametric benchmark models and obtain superior performance the results for three product categories indicate threshold and saturation effects for both ownand cross item temporary price cuts the authors also find that the nature of the own item curve depends on other items price discounts comparisons with restricted model specification

on the superiority of pulsing under a concave advertising market potential function abstract the authors study the superiority of advertising pulsing policy turning advertising on and off in a cyclic fashion over its uniform constant spending counterpart that costs the same under the assumption that sales dynamics follow a modified vidale wolfe aggregate advertising model the authors show that pulsing can be superior if the product of the concave market potential function and the linear or concave advertising response function is convex in advertising similar to previous studies in the literature the average undiscounted profit over the infinite planning horizon is considered as a performance measure according to which alternative advertising pulsation policies are compared employing a well known data set relating advertising to sales the above convexity requirement is empirically supported and the superiority of pulsing is established numerically the performance of the proposed model is found to be superior to two rival models using a one step ahead forecasting procedure the analytical findings of the study are documented into six theoretical results for which proofs are relegated to a separate appendix managerial implications of the study and directions for future research are also discussed

classic promotion tournaments versus market based tournaments as initially formulated in the seminal analysis of lazear and rosen 1981 an important perspective for understanding the role of promotions in firms is the tournament perspective that is a promotion and in particular the wage increase associated with a promotion is a prize that serves as an incentive for workers to exert effort and take other actions beneficial to the firm such as the accumulation of human capital in this paper i consider whether the best way to model promotion tournaments is by having firms commit to prizes ex ante as in lazear and rosen s initial formulation or whether promotion prizes should be modeled as arising from the signaling role of promotions and the competition between firms for promoted workers

the internal economics of the firm evidence from personnel data we analyze twenty years of personnel data from one firm the hierarchical structure is quite simple and stable career movements suggest that the employee s rate of learning and the firm s learning about ability are important there are promotion fast tracks exit rates vary little with tenure or salary the firm has personnel policies like those described in the internal labor markets literature although several theoretical preconditions for ilms such as ports of entry and exit are lacking job levels are important to compensation but there is also substantial individual variation in pay within levels our companion paper in this issue explores the wage policy of this firm

dynamic models incorporating individual heterogeneity utility evolution in conjoint analysis it has been shown in the behavioral decision making marketing research and psychometric literature that the structure underlying preferences can change during the administration of repeated measurements e g conjoint analysis and data collection because of effects from learning fatigue boredom and so on in this research note we propose a new class of hierarchical dynamic bayesian models for capturing such dynamic effects in conjoint applications which extend the standard hierarchical bayesian random effects and existing dynamic bayesian models by allowing for individual level heterogeneity around an aggregate dynamic trend using simulated conjoint data we explore the performance of these new dynamic models incorporating individual level heterogeneity across a number of possible types of dynamic effects and demonstrate the derived benefits versus static models in addition we introduce the idea of an unbiased dynamic estimate and demonstrate that using a counterbalanced design is important from an estimation perspective when parameter dynamics are present

job discrimination market forces and the invisibility hypothesis the invisibility hypothesis holds that the job skills of disadvantaged workers are not easily discovered by potential new employers but that promotion enhances visibility and alleviates this problem then at a competitive labor market equilibrium firms profit by hiding talented disadvantaged workers in low level jobs consequently those workers are paid less on average and promoted less often than others with the same education and ability as a result of the inefficient and discriminatory wage and promotion policies disadvantaged workers experience lower returns to investments in human capital than other workers

hroot hamburg registration and organization online tool abstract hroot hamburg registration and organization online tool is a web based software designed for managing participants of economic experiments this package provides important features to assure a randomized invitation process based on a filtered pre specified subject pool and a complete documentation of the selection procedure for potential participants of an experiment

endogeneity in marketing decision models there are many critical concerns including the accounting for endogeneity when one is properly estimating response functions however it is sometimes certainly not always better to leave some variables exogenous when building mathematical models intended to help decision makers the exogenous variables allow the decision maker to better adapt the mathematical model to different situations and to incorporate myriad variables and constraints outside of the model

advertising and aggregate consumption a bayesian dsge assessment aggregate data reveal that advertising in the u s absorbs approximately 2 of gdp and has a well defined pattern over the business cycle being strongly procyclical and highly volatile because the purpose of brand advertising is to foster sales we ask whether such spending has an appreciable effect on the pattern of aggregate consumption and through this avenue on economic activity this question is addressed by developing a dynamic general equilibrium model in which households preferences for differentiated goods depend on the intensity of brand advertising which is endogenously determined by profit maximizing firms once the model is estimated to match the u s economy it argues that the presence of advertising in the long run raises aggregate consumption and hours worked eventually fostering economic activity we also find that advertising has a relevant impact on fluctuations in consumption investment and markup over the business cycle all of the abovementioned effects are proven to epend crucially on the degree of competitiveness of advertising at the firm level

promotion turnover earnings and firm sponsored training i develop a model in which different technological conditions lead to distinct equilibria with different patterns in labor mobility promotion earning distribution and provision of firm sponsored training key is the asymmetric learning of workers characteristics because of the information that is conveyed to the market by promotion firms have incentives to adopt strategic promotion policies which result in different patterns in the use of internal labor market the theory explains well the differences between the japanese and the united states labor markets

optimal dynamic advertising policy for new products advertising is one of the key marketing tools managers have at their disposal to influence their customers into purchasing a new product the overall objective of new product advertising is to inform and persuade customers drawing up an advertising plan for a new product that is under the influence of diffusion phenomenon is not an easy task hence research in this area is very limited in our research we use an empirically proven diffusion demand function that explicitly incorporates the advertising component our results suggest that optimal advertising is determined by the advertising effectiveness discount rate and the ratio of advertisement to profits depending upon the interplay among these factors the optimal advertising takes decrease increase increase decrease monotonically increasing or monotonically decreasing shape

asymmetric employer information promotions and the wage policy of firms abstract this paper provides evidence that inefficient promotion strategies and large wage increases upon promotion may both arise as a consequence of asymmetric employer information building on the seminal work by waldman 1984a and milgrom and oster 1987 we first present a model that illustrates how both phenomena may jointly arise due to the information revealing character of promotions using experimental labor markets we find evidence consistent with asymmetric employer information being a causal factor for both inefficient promotions and large wage increases upon promotion furthermore we analyze the effect of asymmetric employer information on profits and turnover

target market selection and marketing effort under uncertainty the selective newsvendor abstract we consider a firm that markets procures and delivers a good with a single selling season in a number of different markets the price for the good is market dependent and each market has an associated demand distribution with parameters that depend on the amount of marketing effort applied given long procurement lead times the firm must decide which markets it will serve prior to procuring the good we develop a profit maximizing model to address the firm s integrated market selection marketing effort and procurement decisions the model implicitly accounts for inventory pooling across markets which reduces safety stock costs but increases model complexity the resulting model is a nonlinear integer optimization problem for which we develop specialized solution methods for the case in which budget constraints exist we provide a novel solution approach that uses a tailored branch and bound algorithm our approach solves a broad range of 3000 test instances in an average of less than 2 seconds significantly outperforming a leading commercial global optimization solver

on continuous time optimal advertising under s shaped response continuous time monopolistic models of advertising expenditure that rely on strict response concavity have been shown to prescribe eventual spending at a constant rate however analyses of discrete analogs have suggested thats shaped response convexity for low expenditure levels may allow for the periodic optima encountered in actual practice casting the dynamic between advertising and sales in a common format an autonomous first order relationship the present paper explores extensions along three dimensions an s shaped response function the value of the discount rate and the possibility of diffusion like response supplementing the treatment by mahajan and muller 1986 a flexible class of s shaped response models is formulated for which it is demonstrated that in contrast to findings in the literature on discretized advertising models continuous periodic optima cannot be supported further a set of conditions on the advertising response function are derived that contains and extends that suggested by sasieni 1971 collectively these results both suggest a set of baseline properties that reasonable models should possess and cast doubt on the ability of first order models to capture effects of known managerial relevance

wearout effects of different advertising themes a dynamic bayesian model of the advertising sales relationship models of advertising response implicitly assume that the entire advertising budget is spent on disseminating one message in practice managers use different themes of advertising for example price advertisements versus product advertisements and within each theme they employ different versions of an advertisement in this study we evaluate the dynamic effects of different themes of advertising that have been employed in a campaign we develop a model that jointly considers the effects of wearout as well as that of forgetting in the context of an advertising campaign that employs five different advertising themes we quantify the differential wearout effects across the different themes of advertising and examine the interaction effects between the different themes using a bayesian dynamic linear model dlm such a response model can help managers decide on the optimal allocation of resources across the portfolio of ads as well as better manage their scheduling we develop a model to show how our response model parameters can be used to improve the effectiveness of advertising budget allocation across different themes we find that a reallocation of resources across different themes according to our model results in a significant improvement in demand

estimating threshold effects of u s generic fluid milk advertising this paper addresses the issues of threshold effects pertaining to u s generic fluid milk advertising a threshold delineates the level of advertising intensity that has to be met to generate a specific level of sales effect given that promotional organizations face budget constraints it is of particular interest to ascertain if there exists a minimum threshold that an advertising campaign has to cross to yield a non trivial sales effect despite strong beliefs among market practitioners the existence of advertising threshold effects has rarely been studied by researchers interested in agricultural commodity promotions adopting a spline threshold estimation procedure this paper represents the first attempt to identify thresholds in the sales effect of generic advertising and the impacts the thresholds may have on consumers reactions to changes in important economic variables such as own price and income using quarterly u s generic fluid milk advertising data from 1975 to 2004 a regime dependent fluid milk demand equation is estimated the results support the existence of advertising thresholds and show that generic advertising has the effect of rendering fluid milk demand less elastic with respect to own price and more elastic with respect to income the results of policy simulation further highlight the importance of accounting for the threshold effects of advertising in evaluating promotion program effectiveness

testing alternative econometric models on the existence of advertising threshold effect threshold effect of advertising has received wide attention in the marketing literature but little formal representation of this phenomenon has been developed on the basis of monthly time series

strategic promotion and compensation within a hierarchical firm structure this paper details how the composition of a worker s skills and the non observability of a worker s ability affect wage and promotion paths promotionbased compensation schemes derive naturally from the worker s asymmetrically observed ability promotion takes place over time and is inefficient since employers strategically exploit their knowledge of an able worker s ability conversely employers may be unable to efficiently demote and retain bad managers without paying bonuses employers are led to promote educated employees before their equally or more able but uneducated counterparts explanations for fast track promotions plans and other empirical regularities are provided

the effects of advertising prices and distribution on market share volatility although the influence of marketing decision variables on market share has received ample attention in the literature less is known about their effects on volatility this study attempts to shed light on this issue by empirically examining the effects of advertising pricing and distribution not only on market share but also on its volatility using an egarch model we argue that establishing a link between management controlled actions such as advertising pricing and distribution and market share volatility may benefit firms seeking to reduce uncertainty in their market share performance application of the proposed model to data on two markets suvs and minivans suggested that advertising pricing and distribution significantly influence market share volatility