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This paper examines the current changes in the minority segment of the private equity market. It argues that there is a confluence of three major changes: the demographic
changes in the US population, the changes in the amount of funding available for private equity and the elimination of the SSBIC program. Together, these changes imply a
profound rethinking of the investment concepts in the minority market.
This study provides first empirical results on entrepreneurs’ negotiation behavior. In a series of negotiation tasks, we compare persuasive behaviors and negotiation outcomes of entrepreneurs and non-entrepreneurs. Our results show that entrepreneurs make extensive use of emotions and arguments as means of persuasion. Due to their assertive behavior, they close fewer deals; however, when they close a deal, they make higher profits than non-entrepreneurs. These results demonstrate the relevance of studying entrepreneurs’ interpersonal interactions as determinants of entrepreneurial success and highlight the role expressed emotions and arguments play in this context.
Why does venture capital work in some countries but not in others? This clinical study of the first German venture capital firm examines the difficulties of creating a venture capital market in a bank-based financial system. The analysis identifies the problem of creating appropriate
governance structures to protect investor returns. It exposes the difficulties of established banks - not to mention government - to devise venture investment strategies. It identifies the availability of high quality entrepreneurs as a critical complement. And it provides a reinterpretation of the hypothesis of Black and Gilson (1997), arguing that the existence of an active stock market is a necessary, but by no means sufficient condition for the development of venture capital.
The impact of clusters on entrepreneurship has not been adequately and formally substantiated through empirical analysis. This dissertation looks at the effect of clusters on entrepreneurship at the regional level in the United Kingdom and a comparison is made with a similar study already carried out in Germany. A combination of Global Entrepreneurship Monitor data with Eurostat, European Cluster Observatory, European Innovation Scoreboard, and the UK Office of National Statistics data is used on the UK’s 37 NUTS 2 EU structural fund assistance regions to test the hypotheses regarding entrepreneurship, clusters, and innovation. A logistic regression model result reinforced further by a Generalised Linear Latent and Mixed Model, and a random intercept logit model showed that there is a positive impact of clusters on entrepreneurship. Formalizing the relationship between clusters and entrepreneurship can help practitioners and policymakers to make informed choices, conduct better monitoring, and to make better forecast nascent clusters for potential success or failure in terms of propagating entrepreneurship.
Innovation in emerging markets offers fertile ground for theory development. In recognition of the growing trend in “frugal innovation” discourse among practitioners particularly in emerging economies, we parse “frugal innovation” into "frugal" and "innovation" separately and present the underlying meanings towards understanding "frugal innovation" in historical and contemporary contexts. We further develop a theoretical model of frugal innovation by applying existing theories to emerging market contexts. We do so by merging technology innovation, institutional innovation, and social innovation literatures to argue that frugal innovation lies at the intersections of these streams. We show how using the model to understand what the space currently looks like may help to offer a consolidated and encompassing theory of frugal innovation and aid in opening a research agenda.
There is growing interest among both private and public sectors to serve the underserved in emerging or developing countries leading to, what we call the market for frugal innovation. This paper is divided into two parts. First, we discuss the rhetoric surrounding frugal innovation and attempt to understand the discourse surrounding it as fad, fashion, or fit. Second, we seek to map the emergence of this market by suggesting drivers and the making of a social movement involving different actors pursuing both contentious and complementary approaches to achieve the same outcome, i.e. one of creating value for underserved populations. An understanding of how the rhetoric and market for frugal innovation has emerged will be useful in opening a research agenda. Consequently we cover opportunities and challenges to growth of the market as well as draw implications to academic theory and practice.
With existing technology, it is already possible for personal agents to schedule meetings for their users, to write the small print of an agreement, and for agents to search the Internet for the cheapest price. But serious negotiation cranks the difficulty of the problem up several notches. In this paper, we review what game theory has to offer in the light of experience gained in programming automated agents within the ADEPT (Advance Decision Environment for Process Tasks) project, which is currently being used by British Telecom for some purposes.
We examine the effect of trust on financial investment and contracting decisions in a micro-economic environment where trust is exogenous. Using hand-collected data on European venture capital, we show that the Eurobarometer measure of trust among nations significantly affects investment decisions. This holds even after controlling for investor and company fixed effects, geographic distance, information and transaction costs. The national identity of venture capital firms' individual partners further contributes to the effect of trust. Education and work experience reduce the effect of trust but do not eliminate it. We also examine the relationship between trust and sophisticated contracts involving contingent control rights and find that, even after controlling for endogeneity, they are complements, not substitutes.
In recent years, a “third mission” pursued by universities, i.e. knowledge transfer to industry and society, has become more important as a determinant of enhancements in economic growth and social welfare. In the vast world of technology transfer practices implemented by universities, the establishment and management of university venture capital and private equity funds (UFs) is largely unknown and under-researched. The focus of this work is to provide a detailed description of this phenomenon from 1973 to 2010, in terms of which universities set-up UFs, their target industries and the investment stages of portfolio companies, which types of co-investors are involved in the deals, and which are the determinants of UFs’ ultimate performances. The picture offers us the opportunity to draw some implications about the relevance of UFs in different contexts (i.e. Europe and the United States) and provide to interested stakeholders with some useful guidelines for future development.
This paper investigates the relative performance of enterprises backed by government-sponsored venture
capitalists and private venture capitalists. While previous studies focus mainly on investor returns,
this paper focuses on a broader set of public policy objectives, including value-creation, innovation,
and competition. A number of novel data-collection methods, including web-crawlers, are used to
assemble a near-comprehensive data set of Canadian venture-capital backed enterprises. The results
indicate that enterprises financed by government-sponsored venture capitalists underperform on a
variety of criteria, including value-creation, as measured by the likelihood and size of IPOs and M&As,
and innovation, as measured by patents. It is important to understand whether such underperformance
arises from a selection effect in which private venture capitalists have a higher quality threshold for
investment than subsidized venture capitalists, or whether it arises from a treatment effect in which
subsidized venture capitalists crowd out private investment and, in addition, provide less effective
mentoring and other value-added skills. We find suggestive evidence that crowding out and less effective
treatment are problems associated with government-backed venture capital. While the data does not
allow for a definitive welfare analysis, the results cast some doubt on the desirability of certain government
interventions in the venture capital market.
The theory, principles and practice of multi-agent systems is typically characterised as a computational and engineering discipline, since it is through the medium of computational systems that artificial agent systems are most commonly expressed. However, most definitions of agency draw directly on non-computational disciplines for inspiration. During the 1999 UK workshop on multi-agent systems, UKMAS'99, we invited four speakers to address the conceptualisation of multi-agent systems from their perspective as non-computer scientists. This paper presents their arguments and summarises some of the key points of discussion during the panel.
In recent years bottom-of-the-pyramid (BoP) models have emerged as a popular strategy for offering poor women the opportunity to earn an income by distributing goods and services door-to-door. In this article, we explore one recent example of BoP entrepreneurship: the CARE Bangladesh Rural Sales Program (RSP). The RSP is a partnership between CARE and several multinational and domestic companies that seeks to provide poor women with an opportunity to participate in new forms of economic activity, offering them a prospect to earn an independent income and provide a better future for their family by selling a mix of multinational and locally produced consumer goods across rural Bangladesh. Our research found that the RSP has opened up new pathways of empowerment for some marginalised women in a context of considerable socioeconomic and cultural constraints, yet whether such schemes will have traction as a model for economic empowerment over the long term remains an open question.
Increasing numbers of corporations are vying to capture one of the largest untapped consumer markets – the world's poor – in ways that are not only economically profitable but socially responsible. One type of initiative that has gained increased traction is trading partnerships between multinational corporations and women's informal exchange networks, creating micro-enterprise opportunities that not only deliver soap and mobile phones, but financial empowerment for women. This article examines one such initiative – the trade in Avon cosmetics. It aims to determine the extent to which the initiative alleviates poverty, and fosters empowerment, among black women in South Africa. It suggests that as unlikely as cosmetics may seem as a vehicle for development, direct sales of beauty products can offer low risk opportunities for women to become entrepreneurs, and form a potentially promising route to gender-equitable poverty reduction.
The goal of this study was to examine cultural differences in the value of family involvement in German and Chinese small businesses due to their differences in collectivism/individualism. Our analyses, based on a sample of 562 Chinese and German owners, showed that family involvement — measured as the number of family members that work in the business — is higher in China than in Germany. Compared to German business owners, Chinese owners received most of their start-up capital from family members. Moreover, we were interested in whether family involvement is related to the business owner's ability to make use of start-up capital to turn it into business outcomes. Building on existing literature and based on the match hypothesis we hypothesized that the effects of family involvement on business outcomes depend on the cultural values underlying a business. Our analyses revealed that family involvement negatively affected relationships of start-up capital with business outcomes both in China and in Germany. Our study contributes by showing that a negative effect of family involvement on the ability to make use of start-up capital is not only evident in individualistic cultures such as Germany but does also apply to collectivistic Chinese businesses. Practically, owners in both cultures are suggested to develop strategies in order to prevent and overcome negative effects of family involvement on business outcomes. Our results suggest fruitful avenues for future research.
In this note I develop some further thoughts that build on my paper entitled a "A Theory of Corporate Venturing." In this paper I develop a formal economic model of why corporations may face difficulties when making venture capital investments. In thinking broadly about the reasons why corporations may have difficulties when investing in entrepreneurial companies, I see three main sets of issues. The first set of reasons revolves around issues of intellectual property rights. The second set relates to strategic conflicts of interest. The third set concerns issues of organizational design and conflict within the corporation. The theory paper deals directly with the second set of issues, the conflicts of interest that result from the strategic objectives of the corporation. In this note I therefore want to focus on the first and third area of problems. Many would argue that entrepreneurs don't want corporate investors because they do not want their intellectual property stolen. I would actually argue that, while intellectual property is important, these problems should not be overstated.
The objective of the BC Angel on-line survey was to gather data on angel investing and to analyze the BC angel investment community, individual and organized investors, their composition (diversity), motivations, investment preferences and modus operandi. The survey also focused on individual and organized angel investors who invest in companies that qualify for the tex incentive schemes of the BC government. The on-line survey was analysed to provide further insight into the economic effects of the BC's Equity Capital Program (ECP), best practices within the program and to provide suggestions for program improvement.
The performance and effectiveness of financial institutions are important considerations for policy-makers concerned about economic growth. Growth, after all, is heavily dependent on investment, and a significant fraction of all investment flows through financial institutions. Furthermore, incidences of financial instability in some countries have shown that poor financial policies can have serious consequences. For example, when the Southern Cone countries liberalized financial markets before achieving macroeconomic stability and low inflation, banks in those countries performed disastrously. In the United States the partial deregulation of the savings and loans (S&L) industry invited a great deal of gambling and looting of depositors ' funds, ultimately costing taxpayers hundreds of billions of dollars. Partly because the financial sector of the east Asian high-growth economies grew substantially, financial development has received special attention recently in several developing countries. King and Levine (1993a, 1993b) demonstrated in a broad cross-country study that financial deepening had strong explanatory power for differential growth performance. If financial stability and financial deepening are worthy goals, what are the mechanisms that policy-makers can employ to achieve such goals?
This paper asks the question under what circumstances banks have incentives to increase the deposit collection, when the deposit market is not fully penetrated, i.e. when there is low financial depths. We compare outcomes under a perfectly competitive deposit market with outcomes under financial restraint, defined as a combination of deposit rate controls and restrictions on competition. In the first model we show that temporary exclusive rights may be an efficient way of inducing banks to open branches in new areas. In the second model we show that deposit rate controls can provide banks with stronger incentives to seek out new depositors, and thus to grow the deposit market.This paper represents the views of the authors and does not necessarily represent that of any organization with which they are or have been affiliated.
Deposit Mobilization through Financial Restraint (PDF Download Available). Available from: http://www.researchgate.net/publication/228224729_Deposit_Mobilization_through_Financial_Restraint [accessed Aug 7, 2015].
This paper examines a set of financial policies, called financial restraint, that address financial market stability and growth in an initial environment of low financial deepening.
Unlike with financial repression, where the government extracts rents from the private sector, financial restraint calls for the government to create rent opportunities in the private sector. These rent opportunities induce outcomes that are more efficient than either financial repression or laissez-faire policies. It is argued that deposit rate controls and restrictions on competition create franchise value in financial markets that curtails moral hazard behavior among financial intermediaries. Lending rate controls may also increase the efficiency of intermediation by reducing agency cost in loan markets.
The venture capital industry experienced its biggest decline ever in 2001. The National Venture Capital Association reports that, in the fourth quarter of 2001, investments by venture capital firms were at approximately a third of the level the year before and the amount of money raised by these firms had dropped 80 percent. Many people question whether this trend signals the eventual demise of venture capital.
However, according to the authors of this article, it is important to put these numbers in perspective. In terms of total dollars invested, 2001 ranks as the venture capital industry's third-best year, and the developments of 2001 are simply an anomaly in an otherwise exceptional growth curve. The article examines the significance of this difference between short- and long-term performance.
Using the findings from the Stanford Project on Emerging Companies, an interdisciplinary research project that analyzed 170 technology start-up firms, the authors discuss the effects of venture capital on both the market position of the start-up and on internal operational issues. Their research supports the conclusion that venture capitalists provide value-added services that enhance the value of their portfolio companies. The article concludes with some thoughts on the evolution of the venture capital industry in the nineties.
The objective of this study is to evaluate the economic impact of the venture capital program (VCP) in the province of British Columbia. The study focuses on the economic and financial performance of the companies in the program, including a comparison of the tax credits received versus the taxes paid by these companies.
Governments across the globe are eager to foster entrepreneurial ecosystems, yet there is no consensus on what policies to use. We develop a theory about the equilibrium consequences of two canonical types of entrepreneurship policies: policies that encourage entrepreneurs to found new ventures, and policies that encourage investors to fund new ventures. We distinguish between a short-term impact on current market activity, versus a long-term impact on future activity. Investing in entrepreneurial ventures requires tacit knowledge that is mainly acquired through prior entrepreneurial experience, implying that the supply of capital depends on successful entrepreneurs from prior generations. Recognizing this intergenerational linkage has a profound impact on the market equilibrium, and the effect of entrepreneurship policies. Our analysis identifies a rationale for using funding polices.
We examine the trade-off between efficiency and equality within the context of entrepreneurial founding teams. Using a formal theory where founders may have preferences over relative outcomes, we derive predictions about the antecedents and consequences of dividing equity equally amongst all founders. Using proprietary survey data we empirically test the predictions. Our central finding is that teams that split equity equally are less likely to raise funds from outside investors. The relationship appears not to be causal, but instead driven by selection effects across heterogeneous teams with varying degrees of inequality aversion.
The authors propose and demonstrate a discourse model of the dynamic relationships between consumption practices and consumption texts. They use discourse theory to show how product meanings are created, negotiated, and altered. Then they demonstrate an interpretive method based on the model, using data drawn from television commercials and television programs. They also document the influence of historical discourse on contemporary product meaning.
We formally incorporate the option to gather information into a game and thus endogenize the information structure. We ask whether models with exogenous information structures are robust with respect to this endogenization. Any Nash equilibrium of the game with information acquisition induces a Nash equilibrium in the corresponding game with an exogenous structure. We provide sufficient conditions on the structure of the game for which this remains true when ‘Nash’ is replaced by ‘sequential’. We characterize the (sequential) Nash equilibria of games with exogenous information structures that can arise as a (sequential) Nash equilibrium of games with endogenous information acquisition.
Traditional economic wisdom says that free entry in a market will drive profits down to zero. This paper shows that profits may remain bounded away from zero when firms have to make a negligible small investment to learn the demand.
This paper provides a framework for explicitly modeling the information gathering activities of potential entrants and analyzes how entry behavior is affected by these activities. We assume that information is acquired secretly and that firms face uncertainty about more than one variable. When costs of information gathering are small, entry decisions are as if firms had perfect information so that lack of information cannot cause too much nor too little entry. This as if behavior is even exhibited in specialization equilibria in which different firms obtain information about few but distinct variables. Such equilibria are both socially desirable and robust.
We consider the consequences of competition between two types of experimental exchange mechanisms, a “decentralized bargaining” market, and a “centralized” market. It is shown that decentralized bargaining is subject to a process of “unraveling” in which relatively high value traders (buyers with a high willingness to pay and sellers with low costs) continuously find trading in the centralized markets more attractive until few opportunities for mutually beneficial trade remain outside the centralized marketplace.
Firms may seek to collaborate with skilled suppliers not only to access existing technologies but also to jointly develop new concepts. We sought to examine the details of collaborative concept development through matched cases of novel convertible roof projects in the European automotive industry. The result is a three phase model marked by the use of supplier concept competitions to probe possible features and by the selective maintenance of distance to suppliers. Knowledge transfer and integration practices, differences depending on initial experience, and implications for managing such distributed systems of innovation are highlighted.
The paper considers the consequences of competition between two widely used exchange mechanisms, a "decentralized bargaining" market, and a "centralized" market. In every period, members of a large heterogenous group of privately-informed traders who each wish to buy or sell one unit of some homogenous good may opt for trading through one exchange mechanism. Traders may also postpone their trade to a future period. It is shown that trade outside the centralized market completely unravels. In every strong Nash equilibrium, all trade takes place in the centralized market. No trade ever occurs through direct negotiations.
Actor-network theory (ANT) has contributed greatly to the development of science and technology studies. However, recent critiques appear to have left ANT in a gloomy theoretical black box. What is the likelihood of ANT exiting its current theoretical discontent? Is ANT worthy of salvation and on what grounds? Law argues that recent critiques stem from ANT’s development into a particular theoretical strategy. However, this article will argue that by focusing on strategy as messy and impure, ANT can be afforded the opportunity to shift from a fixed approach to an ambiguous and contingent strategy, well placed to carry on. The article achieves such an argument by first highlighting how ANT has contributed to a recent study of strategy in action; second, by outlining the strategic aspects of ANT; and third, by using the study of strategy in action as a means of engaging with ANT’s current theoretical discontent.
Explores the interrelationship between advertising and consumer rituals using a framework for examining the influence of these cultural institutions. Illustrates the ways in which advertising uses ritual symbolism to create messages about products and services not designed for use during such occasions. Provides specific examples of advertisements using symbols associated with weddings; argues that advertising may also influence the rituals themselves.
The economic boom of the USA in the 1990s was remarkable in its duration, the sustained rise in equipment investment, the reduced volatility of productivity growth, and continued uncertainty about the trend growth rate. In this paper we link these phenomena using an extension of the classic model of implementation cycles due to Shleifer (1986). The key idea is that uncertainty about the trend growth rate can lead firms to bring forward the implementation of innovations, temporarily eliminating expectations-driven business cycles, because delay is risky when beliefs are not common knowledge
This paper presents a model of coordination failures based on market power and local oligopoly. The economy exhibits a multiplicity of Pareto-ranked equilibria. The introduction of uncertainty generates an endogenous equilibrium selection process, due to a strategic use of information by firms. The economy is more likely to settle on some equilibria than on others. We argue that a full understanding of these robustness criteria is needed before any policy which is intended to help coordinate the level of activity to a Pareto-dominant outcome can be successfully implemented.
Art has been boxed in, framed by narrow constraints set to satisfy a forgotten aristocratic imperative. Though we have lost touch with the origins of our convictions about what is and is not art, we still suffer from a continuing compulsion to confer that name upon a small subset of human artifacts: to elevate them, isolate them, and, in the process, blind ourselves to the art in the ordinary, everyday, and accessible. It's a poisonous ideology, one that demeans and belittles to preserve the rights of a class that thinks itself superior.
Consumer research on advertising response has gradually separated the act of reading an ad from the acquisition of brand information. Because the advertising text is the pathway through which brand information is accessed, current models truncate the process that leads to response in a way that distorts our view of both advertising and the mind that reads it. This author proposes that reader-response theory would help researchers study the process of reading as an essential link between advertising text and consumer response. Reader-response theory is a movement within literary criticism that emphasizes the study of reading over formal textual analysis.
It was a bright cold day in January, and the clocks were showing third quarter. Fifty million Americans nuzzled in the breasts of their telescreens, staring down into the Super Bowl stadium. They slipped through the afternoon glassily, with their beer and their Winstons and their friends. Suddenly the predictable drone of sportscasters was interrupted by a gritty sixty-second metaphor. A young woman athlete being chased by faceless storm-troopers raced past hundreds of vacant-eyed workers and hurled a sledgehammer into the image of a menacing voice. A transcendent blast. Then a calm, cultivated speaker assured the astonished multitudes that 1984 would not be like 1984. Macintosh had entered the arena.
Linda M. Scott wants to put an end to the belief that American women have to wear a colorless, shapeless uniform to achieve liberation and equality. A pointed attack on feminism's requisite style of dress, Fresh Lipstick argues that wearing high heels and using hair curlers does not deny you the right to seek advancement, empowerment, and equality. Scott asserts that judging someone on her fashion choices is as detrimental to advancement as judgments based on race, nationality, or social class. Fashion is an important mode of personal expression, not an indication of submission. She demonstrates that feminism's dogged reduction of fashion to sexual objectification has been motivated by a desire to control other women, not free them. This push for power has produced endless conflict from the movement's earliest days, hindering advances in women's rights by promoting exclusion. It is time for the "plain Jane" dress code of the revolution to be lifted, allowing all women to lead, even those wearing makeup and Manolos.
In this article, past consumer research dealing with advertising images is analyzed and critiqued for its underlying assumption: that pictures are reflections of reality. The case against this assumption is presented, and an alternative view, in which visuals are a convention-based symbolic system, is formulated. In this alternative view, pictures must be cognitively processed, rather than absorbed peripherally or automatically. The author argues that current conceptualizations of advertising images are incommensurate with what ads are really like, and that many images currently dismissed as affect laden or information devoid are, in fact, complex figurative arguments. A new theoretical framework for the study of images is advanced in which advertising images are a sophisticated form of visual rhetoric. The process of consumer response implied by the new framework differs radically from past concepts in many ways, but also suggests new ways to approach questions currently open in the literature on the nature and processing of imagery. A pluralistic program for studying advertising pictures as persuasion is outlined.
The controversy over postmodernism is often focused on the impact of consumer culture upon language. In this article, the historical relationship between commerce, language, and communication technology is explored. The struggle between mass and elite over the forms of literacy is outlined, raising questions about the sources of critical hostility toward postmodern culture. The author offers an alternative viewpoint, in which postmodern expression integrates words, pictures, and sound in a manner that is multidimensional, accessible, and communal.
Irish immigrants to America during the second half of the nineteenth century presented significant challenge to the existing Protestant ruling elite. The provenance, religion and behaviour of the arriving Catholic Irish stood in particular opposition to the morality of the Puritan descendents, an ancient enemy of the Irish, who claimed cultural hegemony over the new United States. The result was a contest of wills over the consumption of goods, public and private, religious and secular. This article seeks to chart historically this clash of religion, politics, gender, race and labour. In doing so, it approaches several issues of interest today. It reframes questions about whether consumption can be a subversive political behaviour, and calls into question schemas in cultural theory about the role of the ‘culture industry’. As the Irish eventually came to participate as fully as their ‘oppressors’ in the new market economy and its burgeoning consumer culture, the outcome of the narrative challenges us to rethink whether oppressed groups reach mainstream respectability as a total ‘sellout’ or as the legitimate ends of revolution.
Studies of music in advertising have tended to characterize music as a nonsemantic, affective stimulus working independently of meaning or context. This implicit theory is reflected in methodology and procedures that separate music from its syntax of verbal and visual elements. Consequently, the consumer's ability to judge and interpret music as part of an overall rhetorical intention is overlooked. This article proposes an alternative theory-that music is meaningful, language-like-and calls for both interpretive and empirical research as ways of exploring a richer, potentially more explanatory concept
This chapter from my 2005 book, Fresh Lipstick: Redressing Fashion and Feminism, was dropped for length considerations because it focused on such a short period of time (the war only lasted a little more than four years, while my book was trying to cover 150 years and still be affordable as a purchase). However, many who had read the original draft missed it when the book finally came out, including the peer reviewers. Like any book chapter, however, this one builds on arguments from previous parts of the book, while also setting up expectations for information yet to come. So, I have tried to help readers who have not read the full book along by inserting little signposts that point to evidence, arguments, and even people and campaigns that appeared elsewhere in Fresh Lipstick. Though the chapter stands well on its own, I hope these little additions will make the piece easier to understand by providing further context.
The article articulates a new view of markets by reflecting a matriarchal philosophy and by drawing from the work of new age philosophers and feminist economists. The paper also employs a holistic and activist approach to research. The neo-pagan movement has shifted toward agitating for large-scale social change in recent years. It was stated that extracting the difference between the emergent earth-based philosophy and the world’s leading religions is an important first step. The neo-pagan movement is not anti-science, but it takes its inspiration from those forms of science that are grounded in observation and respect for connectivity, and departs from mechanistic, artificially separated units of analysis and conceptualizations of social life.
Studies of response to advertising images follow parallel streams: one treats visuals as sensory data; the other, operating under rhetorical theory, presumes that images are communicative artifacts. By revisiting a seminal article by Mitchell and Olson, we empirically demonstrate an alternative explanation for results under the sensory approach, while also establishing the basis for complex statements like tropes. We argue that consumers read product attributes from pictures based on an emergent writing system made possible by recent communication technologies. Our theory is consistent with the historical record of communication technology and with the trajectory of research in fields that study writing systems.
The social justice paradigm, developed in philosophy by John Rawls and others, reaches limits when confronted with diverse populations, unsound governments, and global markets. Its parameters are further limited by a traditional utilitarian approach to both industrial actors and consumer behaviors. Finally, by focusing too exclusively on poverty, as manifested in insufficient incomes or resources, the paradigm overlooks the oppressive role that gender, race, and religious prejudice play in keeping the poor subordinated. The authors suggest three ways in which marketing researchers could bring their unique expertise to the question of social justice in a global economy: by (1) reinventing the theoretical foundation laid down by thinkers such as Rawls, (2) documenting and evaluating emergent “feasible fixes” to achieve justice (e.g., the global resource dividend, cause-related marketing, Fair Trade, philanthrocapitalism), and (3) exploring the parameters of the consumption basket that would be minimally required to achieve human capabilities.
Radical product development projects, which are undertaken to create new categories of products, present significant challenges to development teams. In such settings existing formal processes may be limited or inappropriate, and objectives may be ambiguous and changing. The generation of a novel product concept early in the process can play an important role in guiding development teams, but the process by which teams later change concepts, as may be required within radical contexts, has merited further research. This study investigated how teams change novel product concepts after initial generation, employing an inductive case-study method drawing from 51 interviews with members of six radical development projects. The empirical results found that concepts were described in terms of concept components—elemental descriptive forms that included verbal stories, verbal metaphors, and physical prototypes. When changes were required to concepts due to new technical or market information, rather than reconsider the overall concept through iteration to earlier product definition stages, teams shifted individual concept components, with a new component replacing a component of similar descriptive form. Over half of concept components observed across cases came after the initial generation of concepts in later elaboration and shifting. Contrary to expectations, development teams maintained reference not only to the revised concept but also to the deferred original concept. The case of a novel electronic book development project is used to illustrate the process, along with evidence of concept shifting across cases. The detailed findings expand our understanding of how formal processes may be augmented in radical innovation settings and how concepts are actually used by development teams in changing circumstances.
Design professionals have increasingly sought to provide clients not only with design solutions to fit existing plans but also with strategic advice for future opportunities. How can designers serve such a role? This study was based on field research with London-based designers and identified four roles they played: that of strategy visualizer, core competence prospector, market exploiter, and process provider. Each role is described, and the implications for successful collaboration on strategic efforts are discussed.
Scholarly and practitioner literature have both described the potential benefits of using methods associated with a “design thinking” approach to develop new innovations. Most studies of the main design thinking methods—needfinding, brainstorming, and prototyping—are based either on analyses of experienced designers or examine each method in isolation. If design thinking is to be widely adopted, less-experienced users will employ these methods together, but we know little about their effect when newly adopted. Drawing on perspectives that consider concept development as broadly consisting of a divergent concept generation phase followed by a convergent concept selection phase, we collected data on fourteen cases of novice multidisciplinary product development teams using design methods across both phases. Our hybrid qualitative and quantitative analysis indicate both benefits and limits of formal design methods: First, formal design methods were helpful not only during concept generation but also during concept selection. Second, while brainstorming was valuable when combined with other methods, increased numbers of brainstorming sessions actually corresponded to lower performance, except in the setting where new members may join a team. And third, increased team reflexivity—such as from debating ideas, processes, or changes to concepts—was associated with more successful outcomes during concept generation but less successful outcomes during concept selection. We develop propositions related to the contingent use of brainstorming and team reflexivity depending on team composition and phase of development. Implication from this study include that novice multidisciplinary teams are more likely to be successful in applying design thinking when they can be guided to combine methods, are aware of the limits of brainstorming, and can transition from more- to less-reflexive practices.
User-focused design processes are justly celebrated in the design community. But like any other design strategy, they can be used inaccurately, and they can be ineffective. Victor Seidel (University of Oxford) and John Pinto (Pinto Research) suggest some specific insights from the social sciences that can be applied most usefully. They also suggest that these same strategies may be applied to improving design management itself. This article offers six methods for examining both the user and the design team, with an eye to improving innovation, as well as design management.
An overview of the market system as a cultural institution is presented, and the concept of cultural meaning for material artifacts is discussed. The authors propose a system for representing cultural meaning of objects; this system can summarize the convergence of meaning for most material objects across individuals, subcultures, and time.
In the light of the exponential growth of the Internet and World Wide Web, this paper describes, in some detail, existing agents and multiagents applications in the context of e-commerce, and suggests a research agenda for economists in response to these changes in technology and lifestyle. First, several ways where economic theory and, in particular, implementation theory can be used to design and improve the efficiency of e-commerce systems are described. Second, the paper discusses the impact on markets of using software agents. Finally, the paper discusses how economic theory can be used towards the design of the interactions between agents and their users.
Despite the recent misfortunes of many dotcoms, e-commerce will have major and lasting effects on economic activity. But the rise and fall in the valuations of the first wave of e-commerce companies show that vague promises of distant profits are insufficient. Only business models based on sound economic propositions will survive. This book provides professionals, investors, and MBA students the tools they need to evaluate the wide range of actual and potential e-commerce businesses at the microeconomic level. It demonstrates how these tools can be used to assess a variety of existing applications.
Advances in web-based technology--particularly automation and delegation technologies such as smart agents, shopping bots, and bidding elves--support the further growth of e-commerce. In addition to enabling consumers to conduct automated comparisons and sellers to access visitors' background information in real time, such software programs can make decisions for individuals, negotiate with other programs, and participate in online markets. Much of e-commerce's economic value arises from this kind of automation, which not only reduces operating costs but adds value by generating new market interactions.
This text teaches how to analyze the added value of such applications, considering consumer behavior, pricing strategies, incentives, and other critical factors. It discusses added value in several e-commerce arenas: online shopping, business-to-business e-commerce, application design, online negotiation (one-to-one trading), online auctions (one-to-many trading), and many-to-many electronic exchanges. Combining insights from several years of microeconomic research as well as from game theory and computer science, it stresses the importance of economic engineering in application design as well as the need for business models to take into account the "total game."
Automated agents are increasingly being used to interact on behalf of individuals and organizations in electronic markets. Agents are used, for example, to explore the set of possible contracts and to trade in communication bandwidth. Users choose agents which are then matched on various locations (hosts). Hosts will normally check the agents (i.e., the code) to verify that it is compatible with the communication protocol. In this paper we explore the equilibrium outcomes of such interactions. We show that users will choose agents who reveal parts of their code in order to coordinate on welfare improving outcomes which otherwise would not have been supported in equilibrium.
Much of the economic value of electronic commerce comes from the automation of interactions between businesses and individuals. Game theory is a useful set of tools that can be used by designers of electronic-commerce applications in analyzing and engineering of automated agents and communication protocols. The central theoretical concept used in game theory is the Nash equilibrium. In this article, I show how the outcomes supported by a Nash equilibrium can positively be enlarged using automated negotiations.
The experimental phenomenon known as ‘probability matching’ is often offered as evidence in support of adaptive learning models and against the idea that people maximise their expected utility. Recent interest in dynamic-based equilibrium theories means the term re-appears in Economics. However, there seems to be conflicting views on what is actually meant by the term and about the validity of the data.
The purpose of this paper is therefore threefold: First, to introduce today’s readers to what is meant by probability matching, and in particular to clarify which aspects of this phenomenon challenge the utility-maximisation hypothesis. Second, to familiarise the reader with the different theoretical approaches to behaviour in such circumstances, and to focus on the differences in predictions between these theories in light of recent advances. Third, to provide a comprehensive survey of repeated, binary choice experiments.
For any organisation, saving on procurement costs has an impact on profitability that is multiplied by gross margin. Although much research focus has been placed on achieving the lowest possible cost for the goods/services purchased we concern ourselves here with the operational procurement costs of the organisation. The AutONA (Automated One-to-one Negotiation Agent) system was conceived as a means of reducing these operational procurement costs enabling procurement departments to automate as much price negotiation as possible thus creating the option of reducing direct costs and/or redeployment of operational effort into strategic procurement requiring high human involvement. The problem domain has been limited to the automation of multiple 1:1 negotiations over price for quantities of a substitutable good subject to the organisation's procurement constraints of target quantity, price ceiling and deadline. We present the design of the core reasoning system and preliminary results obtained from a number of experiments conducted in HP's Experimental Economics Lab. Our main conclusion is that AutONA could reasonably be deployed for automated negotiation having shown no evidence for being identified as an automated system by suppliers.
We consider a dynamic model where traders in each period are matched randomly into pairs who then bargain about the division of a fixed surplus. When agreement is reached the traders leave the market. Traders who do not come to an agreement return next period in which they will be matched again, as long as their deadline has not expired yet. New traders enter exogenously in each period. We assume that traders within a pair know each other`s deadline. We define and characterize the stationary equilibrium configuration. Traders with longer deadlines fare better than traders with short deadlines. It is shown that the heterogeneity of deadlines may cause delay. It is then shown that a centralized mechanism that controls the matching protocol, but does not interfere with the bargaining, eliminates all delay. Even though this efficient centralized mechanism is not as good for traders with long deadlines, it is shown that in a model where all traders can choose which mechanism to use, no delay will be observed.
Auctions provide an efficient way of resolving one-to-many negotiations. This is particularly true for automated agents where delays and long communications carry negative externalities. A properly designed auction, tailored to the specific needs of the relevant multi-agent system, can significantly improve its performance. In this paper, we focus on the specific problem of service allocation among autonomous, automated agents, within the context of the ADEPT project, which concerns the BT (British Telecom) business process of providing a quote for designing a network for a customer.
The main contributions of this paper are threefold: First, we show how an English auction can be modifed for services, which are multi-dimensional private value objects. Second, we show how, under certain conditions, auctions can be arranged by the service providing agents, in the cases where the service seeking agents fail to do so. We consider the incentives of all participants, and show how such an arrangement can be in their best interest. Finally, by examining our results for what is, essentially, an application of game-theory and mechanism design to an existing application, we draw some general conclusions on how such concepts can be operationalized in automated agents.
Automated agents for electronic markets are very valuable when a large amount of information must be processed quickly or employing human traders is not cost-effective. In markets for communication bandwidth, rights to transmit data are traded through a network. Since demand fluctuates considerably every few seconds, agent-based spot markets provide extra liquidity. This paper considers the design of agents for use in a double auction market for communication bandwidth. The suggested criteria and framework for building adaptive agents are based on statistical decision theory. The proposed agents can differentiate stable from unstable market conditions and respond appropriately.
This paper analyzes automated distributive negotiation where agents have firm deadlines that are private information. The agents are allowed to make and accept offers in any order in continuous time. We show that the only sequential equilibrium outcome is one where the agents wait until the first deadline, at which point that agent concedes everything to the other. This holds for pure and mixed strategies. So, interestingly, rational agents can never agree to a nontrivial split because offers signal enough weakness of bargaining power (early deadline) so that the recipient should never accept. Similarly, the offerer knows that it offered too much if the offer gets accepted: the offerer could have done better by out-waiting the opponent. In most cases, the deadline effect completely overrides time discounting and risk aversion: an agent's payoff does not change with its discount factor or risk attitude. Several implications for the design of negotiating agents are discussed. We also present an effective protocol that implements the equilibrium outcome in dominant strategies.
We describe an experiment where buyers and sellers, endowed with heterogeneous deadlines, are randomly matched and attempt to reach agreement over the division of a fixed surplus. The theoretical models that provide the background for this experiment have been developed in recent papers by Hurkens and Vulkan. Like those papers we consider both the case where deadlines are private and common information –that is, when a trader can or cannot see the deadline of the person she is matched with.
Observed behaviour in the experiment is largely consistent with the theory: when the deadline of the responder is known, offers made are increasing in the responder’s deadline while when the deadline of the responder is unknown, offers made are decreasing in the proposer’s deadline. However, in contradiction to the theory, the experimental evidence indicates that individuals reject positive offers and prefer to receive zero payoffs. This supports previous empirical findings of ultimatum game effects in bargaining.
Antony Jenkins, whose tenure as CEO/Chairman at Barclays makes his name synonymous with ‘purpose-led leadership’, speaks in this interview about a working conception of purpose to inform key decisions for large organizations and about the internal and external challenges these organizations face while implementing purpose. We interviewed him at Oxford in February 2016. He draws our attention to (a) how purpose and performance go hand-in-hand, (b) the importance of recognizing purpose at the individual level and how that gets integrated into the organization’s purpose, and (c) the steps in becoming a purposeful organization that involve challenging the fear of short-term loss and aspiring to employ performance measures that stretch beyond our sense of control. He offers pieces of hard-won advice for an organization attempting a purpose-led transformation and shares his philosophy on how to do so starting with individuals.