Publication database

This paper investigates situations where a sizable sub-set of consumers prefer an inferior (dominated) offer made by an established brand to a superior (dominating) offer made by a less-established brand. Established brands are those for which consumers hold more confident beliefs concerning overall quality. Through a series of eight experiments, we test the hypothesis that the preference for a dominated established brand is linked to ambiguity aversion, a seemingly unrelated pattern of choice behavior between monetary gambles. We first show a correlation between ambiguity aversion and the preference for dominated established brands. We then demonstrate that the preference for established brands is enhanced when ambiguity aversion is made more salient in unrelated preceding choices. To further study the ambiguity-reducing properties of established brands, the last experiments assign brand names to monetary gambles, and it appears that (a priori unrelated) established brand names increase the likelihood of choosing ambiguous gambles. Overall, this research argues that brand equity for longstanding brands derives (at least in part) from consumers' tendency to avoid ambiguity.

 

View all ESMT Working Papers in the ESMT Working Paper Series here. ESMT Working Papers are also available via SSRN, RePEc, EconStor, and the German National Library (DNB).

Cross-country or cross-industry studies of technology diffusion typically estimate how independent factors affect diffusion speed or timing, often based on a two-stage approach. In many applications, however, countries (industries) differ most in the saturation level of diffusion. In a novel, single-stage econometric approach to a standard diffusion model, we therefore estimate how the saturation level co-varies with independent factors. In our application to diffusion of an important retail information technology, we focus on the competitive effect of hypermarkets (superstores). We also find standard scale, income and labor substitution effects.

This working paper explores the challenges of accelerated development of organizational talent. The meaning of the word 'accelerated' is that such development takes place at a pace that is significantly higher than that of 'traditional' development that allows an individual to learn the intricacies of the current job, observe incumbents in a higher level position (usually, one level up), practice elements of the boss' job when being delegated tasks, undergoing formal training, or benefiting from the knowledge accumulated by others and codified in the knowledge management systems. Accelerated development means, contrary to the usual, more traditional developmental path, bypassing traditionally expected career steps, stretched over a longer period of time learning opportunities, and/or age-related developmental progression. Accelerated development is a necessity for organizations facing unprecedented growth, lack of qualified individuals in the internal or external labor markets, and significant pressures from other organizations that are ready to 'poach' talented executives and employees and offer them even higher levels of responsibility and remuneration. Organizations also respond with accelerated development initiatives to the individuals engaged in career entrepreneurship, i.e., those who make alternative career investments in order to enjoy quicker returns in terms of career growth and progression.

 

View all ESMT Working Papers in the ESMT Working Paper Series here. ESMT Working Papers are also available via SSRN, RePEc, EconStor, and the German National Library (DNB).

I develop a structural demand model for mobile telephone service, which facilitates the identification of network effects and compatibility between networks. Network effects are measured by the dependence of consumer willingness to pay on the installed base of subscribers. Compatibility is measured by the relative extent of cross- and own-network effects. I then estimate the model using quarterly panel data from the Polish mobile telephone industry from 1996-2001 and find strong network effects and - despite full interconnection of the mobile telephone networks - low compatibility. I also show that ignoring network effects leads to an overestimation of elasticity of demand.

 

View all ESMT Working Papers in the ESMT Working Paper Series here. ESMT Working Papers are also available via SSRN, RePEc, EconStor, and the German National Library (DNB).

We study the dynamics of usage intensity of second-generation cellular telephony over the diffusion curve. Specifically, we address two questions: First, can we draw conclusions about the underlying drivers of technology diffusion by studying usage intensity? Second, what is the effect of high penetration of previous generations and competing networks on network usage intensity? Using an operator-level panel covering 41 countries with quarterly data over 6 years, we find that heterogeneity among adopters dominates network effects and that different technological generations are complements in terms of usage, but substitutes in terms of subscription.

This essay concerns the design of transformational executive programs. A transformational program presupposes a change in behavior of the attending executive so that the latter becomes more effective in personal or organizational change. To understand what influences the transformational process three triangular conceptual frameworks (building on the short-term dynamic psychotherapy tradition) are presented: the mental life triangle, the conflict triangle, and the relationships triangle. The first shows that cognitive and emotional processes need to be taken into consideration to create changes in behavior. The second describes the sources of thoughts and feelings that may prompt anxiety and cause defensive reactions prohibiting change and productive use of talents. The third relationships triangle explains how an individual's previous experiences create patterns of response that are repeated throughout life and can become dysfunctional. Five major challenges in program design are also examined: selecting participants; identifying the focal issue on which participants need to work; the creation of a safe transitional space that enables the change process; using the group dynamic to foster transformation and to arrive at internalization of the change process; and the educational implications for faculty, facilitators, and coaches.

With permission of the Academy of Management

This paper is concerned with understanding and identifying factors that affect the willingness of business executives to rely on trust as a governance mechanism in the context of partnerships. An instrument was designed (a short business case study followed by a questionnaire) to collect data on how different executives react to the objective conditions of a business deal. Through the questionnaire, individual willingness to rely on trust, individual reaction to traditional types of trust, and sensitivity to other situations that evolve during the deal were measured. It is shown that willingness to rely on trust varies amongst executives and is not fully determined by the conditions of a deal. Furthermore, consistent with a psycho-sociological approach to trust, it is also shown that demographic factors are related to propensity to rely on trust, and that across nationalities, the sensitivity to factors affecting trust such as partner interaction and external information differ.

© 2007 The Authors. Journal compilation © 2007 Blackwell Publishing Ltd

© 2007 The Author Journal compilation © 2007 London Business School

The objective of this paper is to investigate the determinants of European Union (EU) merger control decisions.We consider a sample of 167 EU mergers between 1990 and 2002 and evaluate their competitive consequences by the reaction of the stock market price of competitors to he merging firms. We then account for the discrepancies between the actual and optimal decisions as indicated by the stock market in terms of the political economy surrounding the cases. Our results suggest that the commission's decisions cannot be solely accounted for as protecting consumer surplus. The institutional and political environment does matter. As far as influence is concerned, however, our data suggest that the commission's decisions are not sensitive to firms' interests. Instead, the evidence suggests that other factors-such as market definition and procedural aspects, as well as country and industry effects-do play a significant role.

With permission of the University of Chicago Press

Leadership and management development programs at the world's leading business schools and consulting organizations are increasingly using multirater (multisource, 360-degree) feedback as an instrument for their participants' learning. Despite a plethora of publications about 360-degree instruments and several solid analyses of the method for HR practitioners and consultants, there is not much information that explains the process to the ultimate recipients of the information gathered through feedback, i.e. executives. The purpose of this technical note is to explain to participants of executive education programs who are going through the process of 360-degree assessment the rationale behind using multirater feedback instruments, explain the main principles and the process of going through the exercise, provide guidance on preparation for assessment and selection of respondents, make suggestions on ways to solicit input from the respondents, and briefly outline possible methods of using the feedback results in the context of a leadership development program.