Economics Insights @ CBS

We develop a structural demand model that endogenously captures the effect of out-of-stocks on customer choice by simulating a time-varying set of available alternatives. Our estimation method uses store-level data on sales and partial information on product availability. Our model allows for flexible substitution patterns, which are based on utility maximization principles and can accommodate categorical and continuous product characteristics.

The authors consider how uncertainty over protest occurrence shapes the strategic interaction between companies and activists. Analyzing Wal‐Mart, the authors find support for their theory that companies respond to this uncertainty through a “test for protest” approach. In Wal‐Mart’s case, this consists of low‐cost probes in the form of new store proposals. They then withdraw if they face protests, especially when those protests signal future problems. Wal‐Mart is more likely to open stores that are particularly profitable, even if they are protested.

Communicators' tuning of a message to suit their audience's attitude about a target can bias their subsequent memory of the target. Research shows that this effect occurs to the extent that the message serves the creation of a shared reality with the audience. In two experiments we investigated the motivational processes underlying such audience-tuning memory biases. Experiment 1 found that when audience tuning was motivated by a shared-reality motive (vs.

Negotiators in regulatory fit report feeling right about an upcoming negotiation more than those in non-fit, and this intensifies their responses to negotiation preparation (Appelt et al. in Soc Cogn 27(3), 365-384, 2009). High assessors emphasize critical evaluation and being right (Higgins et al. in Advances in experimental social psychology, Vol 35, pp 293-344, 2003).