Decision Making & Negotiations

Recent empirical evidence supports the view that the income process has an individual-specific growth rate component [Baker (1997), Guvenen (2007b), and Huggett, Ventura, and Yaron (2007)]. Moreover, the individual-specific growth component may be stochastic. Motivated by these empirical observations, I study an individual's optimal consumption-saving and portfolio choice problem when he does not observe his income growth. As in standard income fluctuation problems, the individual cannot fully insure himself against income shocks.

This important handbook explores new and emerging directions in both brand management research and practice and encompasses a diverse set of approaches. These include the latest academic research to offer new frameworks for understanding brand management. Contributors offer the researcher's perspective on current tools in practice by brand managers today and new research and conceptual frameworks for understanding and managing customer experiences.

Heterogeneity is ubiquitous in firm-level and sectoral data. Equilibrium models, however, typically assume a representative firm, as in Andrew B. Abel and Olivier J. Blanchard (1983). The representative firm paradigm leaves no role for the distribution of capital. We model capital reallocation in a general equilibrium model with two sectors. Capital adjustment costs capture illiquidity in our model, similar to Hirofumi Uzawa's (1969) capital installation technology.

Past work on interpersonal assertiveness and organizational effectiveness paints a mixed picture: some research suggests a positive link, other work highlights negative effects. This article reviews recent research and an account that stems from a different perspective, looking at assertiveness as a factor in leadership shortcomings and failure. This approach suggests that interpersonal assertiveness is a major factor and has a curvilinear, inverted-U-shaped relationship with leadership effectiveness. I review evidence for this effect as well as social and instrumental outcome mediators.

Social commerce is an emerging trend in which online shops create referral hyperlinks to other shops in the same online marketplace. We study the evolution of a social commerce network in a large online marketplace. Our dataset starts before the birth of the network (at which points shops were not linked to each other) and includes the birth of the network. The network under study exhibits a typical power-law degree distribution. We empirically compare a set of edge formation mechanisms (including preferential attachment and triadic closure) that may explain the emergence of this property.

Stocks with recent past high idiosyncratic volatility have low future average returns around the world. Across 23 developed markets, the difference in average returns between the extreme quintile portfolios sorted on idiosyncratic volatility is -1:31% per month, after controlling for world market, size, and value factors. The effect is individually significant in each G7 country. In the United States, we rule out explanations based on trading frictions, information dissemination, and higher moments.

Results from four studies show that the reliance on affect as a heuristic of judgment and decision making is more pronounced under a promotion focus than under a prevention focus. Two different manifestations of this phenomenon were observed. Studies 1–3 show that different types of affective inputs are weighted more heavily under promotion than under prevention in person-impression formation, product evaluations, and social recommendations.

We offer a constructive critique of Regulatory Engagement Theory (Higgins, E. T. (2006). Value from hedonic experience and engagement. Psychological Review, 113(3), 439?460.; Higgins, E. T., and Scholer, A. A. (2009). Engaging the consumer: The science and art of the value creation process. Journal of Consumer Psychology, 19(2).). After highlighting the major tenets of the theory and its main contributions, we identify some of its conceptual ambiguities.

Want more revenue, contribution, and profits? Then start managing, measuring, and optimizing the most crucial driver: Customer Value Added (CVA®). In Value Above Cost, award-winning professor and top consultant Donald E. Sexton demonstrates why CVA® is such a powerful tool for quantifying customer value and the business activities that achieve it.