bluuebunny/crossref_metadata_2025 huggingface dataset:
Business Planning for Network Services: A Systems Thinking Approach
Authors: Dutta Amitava
Published: December 2003

As demand for online network services continues to grow, service providers are looking to meet this need and avail themselves of business opportunities. However, despite strong growth in demand, providers continue to have difficulty achieving profitability, customer churn remains high, and network performance continues to draw complaints. We suggest that strategic business planning for network services would benefit from a systems thinking approach that analyzes the feedback effects present in the underlying business process. These feedback loops can be complex and have significant impact on business performance. For instance, while the size of a provider's customer base depends on price and network performance, network performance is itself dependent on the size of the customer base. In this paper, we develop a planning model that represents these feedback effects using the finite difference equations methodology of systems dynamics. The model is validated by showing its fit with essential characteristics of the underlying problem domain, and by showing its ability to replicate observed reference mode behaviors. Simulations are then carried out under a variety of scenarios to examine issues important to service providers. Among other findings, the simulations suggest that (a) under flat-rate pricing, lowering price to increase customer base can hurt profitability as well as network performance; (b) under usage-based pricing, lowering price need not necessarily lead to a larger customer base; and (c) in addition to price, the customers' threshold of tolerance for performance degradation plays a significant role in balancing market share with profitability. We briefly present a prototype decision support system based on the systems thinking approach, and suggest ways in which it could be used to help business planning for network services.
Research Report: Modifying Paradigms—Individual Differences, Creativity Techniques, and Exposure to Ideas in Group Idea Generation
Authors: Garfield Monica J. , Taylor Nolan J. , Dennis Alan R. , Satzinger John W.
Published: December 2003

In today's networked economy, ideas that challenge existing business models and paradigms are becoming more important. This study investigated how individual differences, groupware-based creativity techniques, and ideas from others influenced the type of ideas that individuals generated. While individual differences were important (in that some individuals were inherently more likely to generate ideas that followed the existing problem paradigm while others were more likely to generate paradigm-modifying ideas that attempted to change the problem paradigm), the exposure to paradigm-modifying ideas from others and the use of intuitive groupware-based creativity techniques rather than analytical groupware-based creativity techniques were found to increase the number of paradigm-modifying ideas produced.
Research Commentary: Transformational Issues in Researching IS and Net-Enabled Organizations
Authors: Straub Detmar W. , Watson Richard T.
Published: December 2003

The conduct of net-enabled business, known variously as electronic commerce (EC) or e-Business, has changed the landscape and opportunities for IS research by shifting the focus from internal to customer/partnering systems. The article examines the two primary dyadic net-enabled relationships in the marketplace: B2C and B2B. It also considers issues that extend beyond these two relationships. B2C practice and research are analyzed from: (1) consumer, (2) service, and (3) risk perspectives. Three central issues of B2B or supply chain practice and research are next considered: (1) beyond simple efficiencies, (2) innovations in B2B technology, and (3) information visibility. Finally, four overarching research issues are examined: (1) strategy, (2) organizational design, (3) metrics, and (4) managing IS.

Not all research on the net-enabled organization (NEO) is IS research, and it is critical that IS journals maintain their distinctive focus. Within the bounds of the net-enabled revolution, though, the IS field has an opportunity to shape the phenomenon with timely, theory-based work that will disseminate beyond the IS academic and practitioner communities.
Membership Size, Communication Activity, and Sustainability: A Resource-Based Model of Online Social Structures
Authors: Butler Brian S.
Published: December 2003

As telecommunication networks become more common, there is an increasing interest in the factors underlying the development of online social structures. It has been proposed that these structures are new forms of organizing which are not subject to the same constraints as traditional social structures. However, from anecdotal evidence and case studies it is difficult to evaluate whether online social structures are subject to the same problems as traditional social structures. Drawing from prior studies of traditional social structures and empirical analyses of longitudinal data from a sample of Internet-based groups, this exploratory work considers the role of size and communication activity in sustainable online social structures.

A resource-based theory of sustainable social structures is presented. Members contribute time, energy, and other resources, enabling a social structure to provide benefits for individuals. These benefits, which include information, influence, and social support, are the basis for a social structure's ability to attract and retain members. This model focuses on the system of opposing forces that link membership size as a component of resource availability and communication activity as an aspect of benefit provision to the sustainability of an online social structure. Analyses of data from a random sample of e-mail-based Internet social structures (listservs) indicate that communication activity and size have both positive and negative effects on a structure's sustainability. These results suggest that while the use of networked communication technologies may alter the form of communication, balancing the opposing impacts of membership size and communication activity in order to maintain resource availability and provide benefits for current members remains a fundamental problem underlying the development of sustainable online social structures.
Research Commentary: Workflow Management Issues in e-Business
Authors: Basu Amit , Kumar Akhil
Published: December 2003

Trends towards increased business process automation, e-commerce, and e-business have led to increasing interest in the field of workflow management. In this paper, we provide a perspective on the state of research in workflow management systems, and discuss possible future research directions in this area, with a particular emphasis on workflow systems in integrating interorganizational processes and enabling e-commerce solutions.
Research Report: Increasing Returns to Information Technology
Authors: Kudyba Stephan , Diwan Romesh
Published: December 2003

This work analyzes firm-level investment in information technology and corresponding productivity through the use of a production function over the period from 1995-1997. The results are then compared to previous studies that utilized similar data and methodologies to compare productivity estimates over time. The analysis indicates that investment in IT enhances productivity over the period in question and has illustrated increasing returns over time. These findings are supported by the corresponding empirical analysis which yielded IT capital coefficients in a production function of (0.12, 0.16, 0.18) and IT flow coefficients in a similar function of (0.17, 0.24, 0.22) for the years 1995, 1996, and 1997, respectively. These results reflect the change in firm output given a one-percent change in the natural log of dollars invested in IT capital and flow, and are statistically significant.
Model Composition Using Filter Spaces
Authors: Chari Kaushal
Published: December 2003

Decision support systems (DSS) typically contain data and models to facilitate decision making. DSS users, in response to a particular decision-making situation, often execute a sequence of models, in which inputs to a model in the sequence are obtained from outputs of other models upstream in the sequence and from database retrievals. The problem of generating a sequence of models from the set of available models is known as the model composition problem. In this paper, we propose a new construct called filter spaces to support model composition. We show how filter spaces can significantly facilitate automation of model composition and execution process, and provide effective means to integrate partial solutions from multiple composite models and databases.
An Empirical Examination of the Concern for Information Privacy Instrument
Authors: Stewart Kathy A. , Segars Albert H.
Published: December 2003

The arrival of the “information age” holds great promise in terms of providing organizations with access to a wealth of information stores. However, the free exchange of electronic information also brings the threat of providing easy, and many times unwanted, access to personal information. Given the potential backlash of consumers, it is imperative that both researchers and practitioners understand the nature of consumers' concern for information privacy and accurately model the construct within evolving research and business contexts. Drawing upon a sample of 355 consumers and working within the framework of confirmatory factor analysis, this study examines the factor structure of the concern for information privacy (CFIP) instrument posited by Smith et al. (1996). Consistent with prior findings, the results suggest that each dimension of this instrument is reliable and distinct. However, the results also suggest that CFIP may be more parsimoniously represented as a higher-order factor structure rather than a correlated set of first-order factors. The implication of these results is that each dimension of CFIP as well as the supra dimension derived from the associations among dimensions are important in capturing CFIP and associating the construct to other important antecedents and consequences.
Information Goods Pricing and Copyright Enforcement: Welfare Analysis
Authors: Chen Yeh-ning , Png Ivan
Published: December 2003

We consider how the government should set the fine for copying, tax on copying medium, and subsidy on legitimate purchases, whereas a monopoly publisher sets price and spending on detection. There are two segments of potential software users—ethical users who will not copy, and unethical users who would copy if the benefit outweighs the cost. In deciding on policy, the government must consider how the publisher adjusts price and detection to changes in the fine, tax, and subsidy. Our key welfare result is that increases in detection affect welfare more negatively than price cuts. We also show that the tax is welfare superior to the fine, and that a subsidy is optimal. Generally, government policies that focus on penalties alone will miss the social welfare optimum.
Informational Influence in Organizations: An Integrated Approach to Knowledge Adoption
Authors: Sussman Stephanie Watts , Siegal Wendy Schneier
Published: December 2003

This research investigates how knowledge workers are influenced to adopt the advice that they receive in mediated contexts. The research integrates the Technology Acceptance Model (Davis 1989) with dual-process models of informational influence (e.g., Petty and Cacioppo 1986, Chaiken and Eagly 1976) to build a theoretical model of information adoption. This model highlights the assessment of information usefulness as a mediator of the information adoption process. Importantly, the model draws on the dual-process models to make predictions about the antecedents of informational usefulness under different processing conditions.

The model is investigated qualitatively first, using interviews of a sample of 40 consultants, and then quantitatively on another sample of 63 consultants from the same international consulting organization. Data reflect participants' perceptions of actual e-mails they received from colleagues consisting of advice or recommendations. Results support the model, suggesting that the process models used to understand information adoption can be generalized to the field of knowledge management, and that usefulness serves a mediating role between influence processes and information adoption. Organizational knowledge work is becoming increasingly global. This research offers a model for understanding knowledge transfer using computer-mediated communication.
The Social Construction of Meaning: An Alternative Perspective on Information Sharing
Authors: Miranda Shaila M. , Saunders Carol S.
Published: December 2003

Research on information sharing has viewed this activity as essential for informing groups on content relevant to a decision. We propose and examine an alternate function of information sharing, i.e., the social construction of meaning. To accomplish this goal, we turn to social construction, social presence, and task closure theories. Drawing from these theories, we hypothesize relationships among the meeting environment, breadth and depth of information shared during a meeting, and decision quality. We explore these relationships in terms of the effects of both the media environment in which the group is situated and the medium that group members choose to utilize for their communication

Our study of 32, 5- and 6-person groups supports our belief that interpretation underlies information sharing and is necessary for favorable decision outcomes. It also supports the proposed negative effect of low social presence media on interpretation in terms of depth of information sharing; a low social presence medium, however, promotes information sharing breadth. Finally, the findings indicate that when in multimedia environments and faced with a relatively complex task, choosing to utilize an electronic medium facilitates closure and, therefore, favorable outcomes.
Generalizing Generalizability in Information Systems Research
Authors: Lee Allen S. , Baskerville Richard L.
Published: December 2003

Generalizability is a major concern to those who do, and use, research. Statistical, sampling-based generalizability is well known, but methodologists have long been aware of conceptions of generalizability beyond the statistical. The purpose of this essay is to clarify the concept of generalizability by critically examining its nature, illustrating its use and misuse, and presenting a framework for classifying its different forms. The framework organizes the different forms into four types, which are defined by the distinction between empirical and theoretical kinds of statements. On the one hand, the framework affirms the bounds within which statistical, sampling-based generalizability is legitimate. On the other hand, the framework indicates ways in which researchers in information systems and other fields may properly lay claim to generalizability, and thereby broader relevance, even when their inquiry falls outside the bounds of sampling-based research.
The Influence of Business Managers' IT Competence on Championing IT
Authors: Bassellier Geneviève , Benbasat Izak , Reich Blaize Horner
Published: January 2004

With the increased importance of IT in organizations, business managers are now expected to show stronger leadership in regard to its deployment of IT in organizations. This requires greater focus on their capability to understand and use IT resources effectively. This paper explores the concept of IT competence of business managers as a contributor to their intention to champion IT within their organizations. Based on the knowledge literature, IT competence is defined as “ the set of IT-related knowledge and experience that a business manager possesses.”

The relationship between IT knowledge, IT experience, and championing IT is tested empirically using Structural Equation Modeling with LISREL. Four hundred and four business managers from two large insurance organizations were surveyed. Specific areas of IT knowledge and IT experience were first identified and the first half of the data set was utilized to assess the measurement properties of the instrument in a confirmatory analysis. The contribution of IT knowledge and IT experience to their intention to champion IT was assessed using the second half of the data set. The results show that IT knowledge and IT experience together explain 34% of the variance in managers' intentions to champion IT. Recommendations are given as to how organizations can enhance their business managers IT knowledge and experience to achieve stronger IT leadership from line people.
Authors' Reply to Allport and Kerler (2003)
Authors: Chin Wynne W. , Salisbury Wm. David , Gopal Abhijit , Newsted Peter R.
Published: January 2004

We are pleased that our effort has received such interest, and thank the editor for allowing us the opportunity to provide our thoughts regarding the questions raised by Allport and Kerler (A&K) in their research note (2003). A&K's paper has triggered a response on two fronts. The first concerns technical issues specific to our study (Salisbury et al. 2002), and the second is a more general question that would seem implicit in their paper: What is the appropriate balance between theory and data in scale development?
The Revolution Will Not Be Televised: Introduction to the Special Issue on Marketing Science and the Internet
Authors: Hoffman Donna L.
Published: December 2003

There is a revolution happening—a startling and amazing revolution that is altering everything from our traditional views of how advertising and communication media work to how people can and should communicate with each other.

That revolution is the Internet—the massive global network of interconnected packet-switched computer networks—and as the most important innovation since the development of the printing press, the Internet has the potential to radically transform not just the way individuals go about conducting their business with each other, but also the very essence of what it means to be a human being in society.

Since the introduction of the first graphicallyoriented Web browser, Mosaic, in 1993, the Internet has experienced phenomenal growth, both in terms of the number of computers and devices connected to it and the number of individuals and firms providing and accessing content on it (Hoffman et al. 2000). The first significant commercial activity appeared on the Web by 1994and in the ensuing five years, the commercialization of the Internet has exploded. There are now very few countries and territories left in the entire world that do not have at least one host computer connected to the Internet (Rutkowski 1999). At the same time, electronic commerce, as a research area, a business, and, indeed, an entire new industry, is still very much in its infancy. There is much confusion and complexity and not nearly enough solid information.
The Little Engines That Could: Modeling the Performance of World Wide Web Search Engines
Authors: Bradlow Eric T. , Schmittlein David C.
Published: December 2003

This research examines the ability of six popular Web search engines, individually and collectively, to locate Web pages containing common marketing/management phrases. We propose and validate a model for search engine performance that is able to represent key patterns of coverage and overlap among the engines.

The model enables us to estimate the typical additional benefit of using multiple search engines, depending on the particular set of engines being considered. It also provides an estimate of the number of relevant Web pages not found by any of the engines. For a typical marketing/management phrase we estimate that the “best” search engine locates about 50% of the pages, and all six engines together find about 90% of the total.

The model is also used to examine how properties of a Web page and characteristics of a phrase affect the probability that a given search engine will find a given page. For example, we find that the number of Web page links increases the prospect that each of the six search engines will find it. Finally, we summarize the relationship between major structural characteristics of a search engine and its performance in locating relevant Web pages.
Customer Referral Management: Optimal Reward Programs
Authors: Biyalogorsky Eyal , Gerstner Eitan , Libai Barak
Published: December 2003

Sellers who plan to capitalize on the lifetime value of customers need to manage the sales potential from customer referrals proactively. To encourage existing customers to generate referrals, a seller can offer exceptional value to current customers through either excellent quality or a very attractive price. Rewards to customers for referring other customers can also encourage referrals. We investigate when referral rewards should be offered to motivate referrals and derive the optimal combination of reward and price that will lead to the most profitable referrals.

We define a delighted customer as one who obtains a positive level of surplus above a threshold level and, consequently, recommends the product to another customer. We show that the use of referral rewards depends on how demanding consumers are before they are willing to recommend (i.e., on the delight threshold level). The optimal mix of price and referral reward falls into three regions: (1) When customers are easy to delight, the optimal strategy is to lower the price below that of a seller who ignores the referral effect but not to offer rewards. (2) In an intermediate level of customer delight threshold, a seller should use a reward to complement a low-price strategy. As the delight threshold gets higher in this region, price should be higher and the rewards should be raised. (3) When the delight threshold is even higher, the seller should forsake the referral strategy all together. No rewards should be given, and price reverts back to that of a seller who ignores referrals. These results are consistent with the fact that referral rewards are not offered in all markets.

Our analysis highlights the differences between lowering price and offering rewards as tools to motivate referrals. Lowering price is attractive because the seller “kills two birds with one stone”: a lower price increases the probability of an initial purchase and the likelihood of referral. Unfortunately, a low price also creates a “free-riding” problem, because some customers benefit from the low price but do not refer other customers. Free riding becomes more severe with an increasing delight threshold; therefore, motivating referrals through low price is less attractive at high threshold levels. A referral reward helps to alleviate this problem, because of its “pay for performance” incentive (only actual referrals are rewarded.) Unfortunately, rewards can sometimes be given to customers who would have recommended anyway, causing a waste of company resources. The lower the delight threshold level, the bigger the waste and, therefore, motivating referrals through rewards loses attractiveness.

Our theory highlights the advantage of using referral rewards in addition to lowering price to motivate referrals. It explains why referral programs are offered sometimes but not always and provides guidelines to managers on how to set the price and reward optimally.
Editorial: Defining Interesting Research Problems
Authors: Shugan Steven M.
Published: December 2003

We argue that research problems are only interesting relative to some external audience. Interesting academic research should impact, at least, that external audience. Hence, we should target our research toward specific external audiences. Several foreboding trends that exacerbate the urgency of this targeting are discussed. To facilitate the targeting task, a partial list of fifteen possible audiences for academic research in marketing is identified. We discuss some of them, including practitioners, in detail. For example, we conclude that, for our research to be interesting to practitioners, practitioners must have the ability to improve and to make better decisions with enhanced understanding. Finally, we strongly suggest that we focus our research on fundamental problems in marketing. These are problems with the property that external audiences would first look to the marketing literature for answers.
Measuring Heterogeneous Reservation Prices for Product Bundles
Authors: Jedidi Kamel , Jagpal Sharan , Manchanda Puneet
Published: December 2003

This paper develops a model for capturing continuous heterogeneity in the joint distribution of reservation prices for products and bundles. Our model is derived from utility theory and captures both within-and among-subject variability. Furthermore, it provides dollarmetric reservation prices and individual-level estimates that allow the firm to target customers and develop customized and nonlinear pricing policies.

Our experiments show that, regardless of whether the products are durables or nondurables, the model captures heterogeneity and predicts well. Models that assume homogeneity perform poorly, especially in predicting choice of the bundle. Furthermore, the methodology is robust even when respondents evaluate few profiles.

Self-stated reservation prices do not have any informational content beyond that contained in the basic model. The direct elicitation method appears to understate (overstate) the variation in reservation prices across consumers for low-priced (high-priced) products and bundles. Hence this method yields biased demand estimates and leads to suboptimal product-line pricing policy.

The optimization results show that the product-line pricing policy depends on the degree of heterogeneity in the reservation prices of the individual products and the bundle. A uniformly high-price strategy for all products and bundles is optimal when heterogeneity is high. Otherwise, a hybrid strategy is optimal.
Advertising Competition Under Consumer Inertia
Authors: Banerjee Bibek , Bandyopadhyay Subir
Published: December 2003

We construct a multistage game-theoretic model of advertising and price competition in a differentiated products duopoly, in which proportions of consumers exhibit latent inertia in favor of repeat purchase. Advertising simultaneously plays the dual role in reducing such inertia through awareness and enhancing perceived brand value (persuasion). We derive the advertising price cross-effects and provide a theoretical reconciliation of the longstanding debate in the marketing literature regarding the impact of advertising on price sensitivity. We characterize the nature of equilibria under symmetry and show that when a large proportion of consumers exhibit inertial tendencies, then a multiplicity of equilibria exists. Marketing implications and comparative statics are discussed.

Numerical simulations for asymmetric firms are presented, wherein we show that advertising is not a useful competitive tool for small firms. However, advertising spending by the large firm provides a halo effect for the average prices in the category, which has a positive externality on the small firm's profits. In the absence of the small brand advertising, larger brand shares encourage firms to allocate higher expenditures on advertising to enhance the perceived value of their brand, which in turn shore up the average prices in the industry from which all firms benefit.
Internet Shopping Agents: Virtual Co-Location and Competition
Authors: Iyer Ganesh , Pazgal Amit
Published: December 2003

Internet Shopping Agents (ISAs) allow consumers to costlessly search many online retailers and buy at the lowest price. One would expect these ISAs to subject sellers to intense price competition that results in uniform low prices. Yet, Internet retailers have joined these ISAs. Furthermore, the prices charged by inside retailers can vary substantially. We examine the impact of ISAs on market competition. An ISA creates differentiation in the pricing strategies of ex-ante identical retailers: Some retailers join the ISA due to mass of consumers that they can potentially win, while others stay out and extract surplus from their loyal consumers, while others stay our and extract surplus from their loyal consumers. The equilibrium inside pricing is such that the average price charged can increase or decrease when more retailers join, depending on whether or not the reach of the ISA is independent of the number of joining retailers. When the reach is endogenous, there exist a unique number of inside retailers.
Indirect Network Externality Effects on Product Attributes
Authors: Basu Amiya , Mazumdar Tridib , Raj S. P.
Published: December 2003

Indirect network externality (INE) effect exists when the utility of a product increases with the greater availability of compatible complementary products. We demonstrate that INE effects can vary by product attributes, with externality-sensitive attributes gaining more from increased availability of complementary products than other attributes. Past research has assumed that the benefit of increased availability of complementary products (e.g., software) accrues to theentireproduct (e.g., hardware). Utilizing data covering a period from 1985 to 1995 on compact disc player prices, attributes, and CD titles releases, and using a hedonic price approach, we find significant positive interactions between CD title availability and two attributes of the CD player, namely, changer capacity and its oversampling rate. In addition to INE-attribute interactions, increased availability of CD titles is found to have a significant positive impact on the overall price of CD players, which is consistent with past research. Collectively, these effects of INE have helped reduce the yearly decline in the price of CD players. The finding that INE effects differentially affect different attributes can help managers in decisions such as pricing, timing of introduction, and changing the levels of INE-sensitive attributes.
Negotiations and Exclusivity Contracts for Advertising
Authors: Dukes Anthony , Gal–Or Esther
Published: December 2003

Exclusive advertising on a given media outlet is usually profitable for an advertiser because consumers are less aware of competing products. However, for such arrangements to exist, media must benefit as well. We examine conditions under which such exclusive advertising contracts benefit both advertisers and media outlets (referred to as stations) by illustrating that exclusive equilibria arise in a theoretical model of the media, advertisers, and consumers who participate in both the product and media markets. In the model, stations sell advertising space to advertisers and broadcast advertising messages to consumers.

Conditions leading to higher equilibrium levels of advertising can be unprofitable for advertisers because high levels of advertising make consumers better informed and thus lead to fiercer product price competition. As a result, media stations may be less profitable as well because their payoff is determined as a fraction of the advertiser surplus generated in the product market.

Stations mitigate this effect by offering advertisers exclusive advertising contracts. With such contracts, consumers are less informed about competing products, yielding higher producer surplus. It is profitable for stations to offer exclusivity when commercial advertising is an important means for advertisers to inform consumers about their products.
The Price of Launching a New Product: Empirical Evidence on Factors Affecting the Relative Magnitude of Slotting Allowances
Authors: Rao Akshay R. , Mahi Humaira
Published: December 2003

Slotting allowances are a relatively recent trend, particular to the retail food industry. These allowances are lump-sum, up-front transfer payments from manufacturer to retailer when the manufacturer launches a new product. The practice has attracted some scrutiny because of uncertainty about its purposes and consequences. We draw from the extant literature to identify factors that potentially influence the relative magnitude of slotting allowances. Based on analysis of primary survey data from retailers and manufacturers, we observe that charging and paying of slotting allowances are affected by the relative strength of the players. Among retailers, the relative magnitude of slotting fees increases with retailers' informational advantage over the manufacturer about the likely success of the new product, even when retailers recognize that the product is likely to be successful. Additionally, and consistent with the first finding, retailers with lower costs (i.e., potentially more efficient and powerful retailers) received higher slotting allowances. Furthermore, retailers charge higher slotting fees, even when concerns about manufacturers' fulfilling postlaunch advertising commitments are minimal, implying that relatively powerless manufacturers are asked to provide credible commitments regarding postlaunch activitiesandare asked to pay relatively high slotting fees. Among manufacturers, the relative magnitude of slotting fees paid is lower for those who have a strong market share position. We discuss the theoretical, managerial, and public policy implications of our findings.
Demand and Supply Dynamics for Sequentially Released Products in International Markets: The Case of Motion Pictures
Authors: Elberse Anita , Eliashberg Jehoshua
Published: December 2003

We develop an econometric model to study a setting in which a new product is launched first in its domestic market and only at a later stage in foreign markets, and where the product's performance (“demand”) and availability (“supply”) are highly interdependent over time within and across markets. Integrating literature on international diffusion, “success-breeds-success” trends, and the theatrical motion picture industry—the focus of the empirical analysis—we develop a dynamic simultanenous-equations model of the drivers and interrelationship of the behavior of consumers (“audiences”) and retailers (“exhibitors”). Our findings emphasize the importance of considering the endogeneity and simultaneity of audience and exhibitor behavior, and challenge conventional wisdom on the determinants of box office performance (which is predominantly based on modeling frameworks that fail to account for the interdependence of performance and availability). Specifically, we find that variables such as movie attributes and advertising expenditures, which are usually assumed to influence audiences directly, mostly influence revenuesindirectly, namely through their impact on exhibitors' screen allocations. In addition, consistent with the idea that the “buzz” for a movie is perishable, we find that the longer is the time lag between releases, the weaker is the relationship between domestic and foreign market performance—an effect mostly driven by foreign exhibitors' screen allocations.
R&D, Marketing, and the Success of Next-Generation Products
Authors: Ofek Elie , Sarvary Miklos
Published: December 2003

This paper studies dynamic competition in markets characterized by the introduction of technologically advanced next-generation products. Firms invest in new product effort in an attempt to attain industry leadership, thus securing high profits and benefiting from advantages relevant for the success of future product generations. The analysis reveals that when the current leader possesses higher research and development (R&D) competence, it tends to investmorein R&D than rivals and to retain its lead position. The leader's investment exhibits an inverse-U pattern as this advantage increases. In contrast, when the leader enjoys an advantage that originates from the persistence of reputation, it investslessthan its followers. Now, followers' investment exhibits an inverse-U pattern as reputation advantage increases. Depending on the extent of leader reputation, industry structure can either exhibit frequent leadership shifts or prolonged incumbent dominance. The basic framework is extended to allow investments in additional marketing variables (e.g., advertising). Interestingly, the leader takes advantage of strong demand for its current product by focusing more on advertising, whereas the follower expends more on R&D. By shedding light on the implications of industry position for investment incentives and market evolution, the analysis provides valuable insights for formulating marketing strategy in fast-paced, high-tech business environments.
Sustainable Pioneering Advantage? Profit Implications of Market Entry Order
Authors: Boulding William , Christen Markus
Published: December 2003

There is strong theoretical and empirical evidence supporting the idea that “first-to-market” leads to an enduring market share advantage. In sharp contrast to these findings, we find that at the business unit level being first-to-market leads, on average, to a long-termprofit disadvantage. This result holds for a sample of consumer goods as well as a sample of industrial goods and leads to questions about the validity of first mover advantage, in and of itself, as a strategy to achieve superior performance. We replicate the typical demand-side pioneering advantage but find an evengreater average cost disadvantage, which is the source of the pioneering profit disadvantage. In an extended analysis, we show that first-to-market leads to aninitial profit advantage, which, depending on the sample or profit measure, lasts for about 12 to 14 years before turning into a disadvantage. Moreover, we show that pioneers differentially benefit from a lack of consumer learning, a strong market position and patent protection. These three moderating factors together can actually help pioneers achieve a sustainable profit advantage over later entrants. Finally, we find strong support for the theoretical argument that the entry order decision should be treated as endogenous in empirical estimation.
Editorial: Journal Rankings: Save the Outlets for Your Research
Authors: Shugan Steven M.
Published: January 2004

Rankings of MBA programs by journalists have had a dramatic impact on business schools. Now, we face the prospect of journal rankings. Journal rankings impose a single dimension for evaluating journals that will inevitably hurt some journals. However, there are steps that researchers can take to keep their journals strong. For example, we should all support our professional organizations, subscribe to relevant journals, and count journal service in promotion decisions. In sum, this article identifies ten steps all researchers should take.
Enriching Scanner Panel Models with Choice Experiments
Authors: Swait Joffre , Andrews Rick L.
Published: January 2004

This research examines the methods, viability, and benefits of pooling scanner panel choice data with compatible preference data from designed choice experiments. The fact that different choice data sources have diverse strengths and weaknesses suggests it might be possible to pool multiple sources to achieve improved models, due to offsetting advantages and disadvantages. For example, new attributes and attribute levels not included in the scanner panel data can be introduced via the choice experiment, while the scanner panel data captures preference dynamics, which is, at best, difficult with experimental data. Our application, involving liquid laundry detergent, establishes the feasibility and desirability of doing such augmentations of scanner panel data: The joint scanner panel/choice experiment model has significantly better prediction performance on a holdout data set than does a pure scanner panel model. Thus, we extend the concept of choice data enrichment into another domain and demonstrate that data enrichment can add significantly to one's understanding of preferences reflected in scanner panel data.
A Comparison of Online and Offline Consumer Brand Loyalty
Authors: Danaher Peter J. , Wilson Isaac W. , Davis Robert A.
Published: January 2004

In this study we compare consumer brand loyalty in online and traditional shopping environments for over 100 brands in 19 grocery product categories. The online purchase data come from a large traditional grocery retailer that also operates an online store for its products. The offline data corresponds to the exact same brands and categories bought in traditional stores by a panel of homes operated by ACNielsen for purchases made in the same city and over the same time period. We compare the observed loyalty with a baseline model, a new segmented Dirichlet model, which has latent classes for brand choice and provides a very accurate model for purchase behavior. The results show that observed brand loyalty for high market share brands bought online is significantly greater than expected, with the reverse result for small share brands. In contrast, in the traditional shopping environment, the difference between observed and predicted brand loyalty is not related to brand share.
The Effects of Effort and Intrinsic Motivation on Risky Choice
Authors: Kivetz Ran
Published: January 2004

People often need to trade off between the probability and magnitude of the rewards that they could earn for investing effort. The present paper proposes that the conjunction of two simple assumptions (relating effort-induced reward expectations to prospect theory's value function) provides a parsimonious theory that predicts that the nature of the required effort will have a systematic effect on such trade-offs. Using the case of frequency (or loyalty) programs, a series of five studies involving both real and hypothetical choices demonstrated that (a) the presence (as opposed to absence) of effort requirements enhances the preference for sure-small rewards over large-uncertain rewards; (b) the preference for reward certainty is attenuated when the effort activity is intrinsically motivating; and (c) continuously increasing the effort level leads to an inverted-U effect on the preference for sure-small over largeuncertain rewards. The studies also employ process measures and examine the mechanisms underlying the impact of the effort stream on the trade-off between the certainty and magnitude of rewards. The final section discusses the theoretical implications of this research as well as the practical implications with respect to frequency programs and other types of incentive systems.
Price-Directed Replenishment of Subsets: Methodology and Its Application to Inventory Routing
Authors: Adelman Daniel
Published: January 2004

The idea of price-directed control is to use an operating policy that exploits optimal dual prices from a mathematical programming relaxation of the underlying control problem. We apply it to the problem of replenishing inventory to subsets of products/locations, such as in the distribution of industrial gases, so as to minimize long-run time average replenishment costs. Given a marginal value for each product/location, whenever there is a stockout the dispatcher compares the total value of each feasible replenishment with its cost, and chooses one that maximizes the surplus. We derive this operating policy using a linear functional approximation to the optimal value function of a semi-Markov decision process on continuous spaces. This approximation also leads to a math program whose optimal dual prices yield values and whose optimal objective value gives a lower bound on system performance. We use duality theory to show that optimal prices satisfy several structural properties and can be interpreted as estimates of lowest achievable marginal costs. On real-world instances, the price-directed policy achieves superior, near optimal performance as compared with other approaches.
Optimal Policies of Yield Management with Multiple Predetermined Prices
Authors: Feng Youyi , Xiao Baichun
Published: December 2003

It is a common practice for industries to price the same products at different levels. For example, airlines charge various fares for a common pool of seats. Seasonal products are sold at full or discount prices during different phases of the season. This article presents a model that reflects this yield management problem. The model assumes that (1) products are offered at multiple predetermined prices over time; (2) demand is price sensitive and obeys the Poisson process; and (3) price is allowed to change monotonically, i.e., either the markup or markdown policy is implemented. To maximize the expected revenue, management needs to determine the optimal times to switch between prices based on the remaining season and inventory. Major results in this research include (1) an exact solution for the continuous-time model; (2) piecewise concavity of the value function with respect to time and inventory; and (3) monotonicity of the optimal policy. The implementation of optimal policies is fairly facile because of the existence of threshold points embedded in the value function. The value function and time thresholds can be solved with a reasonable computation effort. Numerical examples are provided.
Coordinating Strategic Capacity Planning in the Semiconductor Industry
Authors: Karabuk Suleyman , Wu S. David
Published: January 2004

We study strategic capacity planning in the semiconductor industry. Working with a major US semiconductor manufacturer on the configuration of their worldwide production facilities, we identify two unique characteristics of this problem as follows: (1) wafer demands and manufacturing capacity are both main sources of uncertainty, and (2) capacity planning must consider the distinct viewpoints from marketing and manufacturing. We formulate a multi-stage stochastic program with demand and capacity uncertainties. To reconcile the marketing and manufacturing perspectives, we consider a decomposition of the planning problem resembling decentralized decision-making. We develop recourse approximation schemes representing different decentralization schemes, which vary in information requirements and complexity. We show that it is possible to arrive at near optimal solutions (within 6.5%) with information decentralization while using a fraction (16.2%) of the computer time.
A Branch-and-Price Algorithm for the Multiperiod Single-Sourcing Problem
Authors: Freling Richard , Romeijn H. Edwin , Morales Dolores Romero , Wagelmans Albert P. M.
Published: January 2004

In this paper, we propose a multiperiod single-sourcing problem (MPSSP), which takes both transportation and inventory into consideration, suitable for evaluating the performance of a logistics distribution network in a dynamic environment. We reformulate the MPSSP as a Generalized Assignment Problem (GAP) with a convex objective function. We then extend a branch-and-price algorithm that was developed for the GAP to this problem. The pricing problem is a so-called Penalized Knapsack Problem (PKP), which is a knapsack problem where the objective function includes an additional convex term penalizing the total use of capacity of the knapsack. The optimal solution of the relaxation of the integrality constraints in the PKP shows a similar structure to the optimal solution of the knapsack problem, that allows for an efficient solution procedure for the pricing problem. We perform an extensive numerical study of the branch-and-price algorithm.
A Branch-and-Cut Algorithm for the Undirected Traveling Purchaser Problem
Authors: Laporte Gilbert , Riera-Ledesma Jorge , Salazar-González Juan-José
Published: January 2004

The purpose of this paper is to present a branch-and-cut algorithm for the undirected Traveling Purchaser Problem which consists of determining a minimum-cost route through a subset of markets, where the cost is the sum of travel and purchase costs. The problem is formulated as an integer linear program, and several families of valid inequalities are derived to strengthen the linear relaxation. The polyhedral structure of the formulation is analyzed and several classes of valid inequalities are proved to be facet defining. A branch-and-cut procedure is developed and tested over four classes of randomly generated instances. Results show that the proposed algorithm outperforms all previous approaches and can optimally solve instances containing up to 200 markets.