Economics Insights @ CBS

It has been recently proposed that people can flexibly rely on sources of control that are both internal and external to the self to satisfy the need to believe that their world is under control (i.e., that events do not unfold randomly or haphazardly). Consistent with this, past research demonstrates that, when personal control is threatened, people defend external systems of control, such as God and government.

Conventional wisdom in marketing holds that retailer forward buying (1) is a consequence of manufacturer trade promotions and (2) stockpiling units helps the retailer but hurts the manufacturer. This paper provides a deeper understanding of forward buying by analyzing it within the context of manufacturer trade promotions, competition and demand uncertainty. We find that regardless of whether the manufacturer offers a trade promotion or not, allowing the retailer to forward buy and hold inventory for the future can, under certain conditions, be beneficial for both parties.

Four experiments explored whether 2 uniquely human characteristics — counterfactual thinking (imagining alternatives to the past) and the fundamental drive to create meaning in life — are causally related. Rather than implying a random quality to life, the authors hypothesized and found that counterfactual thinking heightens the meaningfulness of key life experiences. Reflecting on alternative pathways to pivotal turning points even produced greater meaning than directly reflecting on the meaning of the event itself.

The conventional wisdom is that politicians' rent-seeking motives increase public debt and deficits. This is because myopic politicians face political risk and prefer to extract political rents as early as possible. In this paper we study the determination of government debt and deficits in a dynamic political economy model. We show that this conventional wisdom relies on economic volatility being low relative to political uncertainty.

Identifying the right business model for addressing global customers and formalizing that model into a global customer management program is a key task for any firm with global aspirations. The key success factor is embedding the program firmly within the firm's corporate strategy. Simply leveraging domestic or regional account management into such a program will not deliver the desired results. Based on extensive research with a global company database, this article presents a framework for successfully introducing a global customer management program.