Columbia Business School Research

This paper deals primarily with forecast disclosure rules, a topic that has attracted the attention of both the Securities and Exchange Commission and the accounting profession. We consider two fundamental and related aspects of such a rule: 1) the extent to which the type of information to be disclosed conveys information pertinent to valuing firms; and 2) the extent to which a rule requiring public forecast disclosure is consistent with Pareto optimal allocations of resources.

In recent years productivity bargaining has been heralded as a promising means of increasing productivity in government, particularly at state and local levels. However, analysis of the literature and practice of productivity bargaining indicates that certain inherent conceptual and implementational problems have not been adequately recognized by academics and practitioners. The central problem concerns the failure to recognize that productivity gains may be counterproductive if accompanied by excessive unit cost increases.

In his fundamental works and Douglas Vickers integrates the production, investment and financing decisions of the firm into a useful and illuminating model. He deals with uncertainty using risk-adjusted capitalization and interest rates, assumes constant business risk and treats financial risk as a function of leverage. This paper extends Vickers' analysis by allowing business risk to depend on production and investment decisions.

Can collective bargaining and the merit system co-exist in public employment? Many writers in the field think that concepts of merit must give way to seniority in government service, as it has in the private sector. The authors believe that view is incorrect. Indeed, by pressing for equity, and an end to patronage, unions may even be contributing to the strengthening of the merit system.

The article explores the increasing popularity and importance of interest arbitration with regard to resolving collective bargaining disputes in public sector labor relations in the U.S. In avoiding or terminating strikes that threaten basic public interest, the use of arbitration may pose the only practical means of dealing with the situation. Furthermore, third-party figures brought to negotiating disputes harbors a fairness concept that is often viewed an important ingredient of labor stability.

The purpose of this paper is to study consumer information processing within the context of attitude formation and change. Examination of the cognitive rules used by consumers in manipulating information presented in a persuasive communication seems quite relevant to understanding the impact of such communications. Persuasive communications can be viewed as presenting data to the consumer, who then manipulates and combines those data in the process of forming or changing an attitude.

During the past several years, one of the more intensively studied areas in marketing and consumer research has been multi-attribute models of attitude [36]. The basic proposition of these models is that consumers form attitudes toward products on the basis of product attributes, a formulation which has considerable implications for marketing strategies.

In a field experiment three salesman employed six alternative messages in attempting to sell a magazine subscription to student subjects randomly selected from the registrar's listing at a major university. Three conversational and three nonconversational messages, developed from Bales's Interaction Process Analysis, were employed in a telephone selling paradigm, designed to minimize extraneous nonverbal communication. Each salesman contacted prospective subjects (n = 78, 73, 118) until he had completed 42 sales attempts, 7 per message, for which a postquestionnaire was administered.

A distinction is drawn between the multiattribute attitude model as a measurement device and as a theory of attitude formation and change. Using an analysis of variance paradigm to investigate the underlying multiplicative and summative assumptions, Fishbein's multiattribute theory is found to demonstrate reasonably high construct validity. Individual differences in attribute combination rules are identified, and the issue of cognitive averaging vs. cognitive summation is raised.

How many fire companies does New York City need and where should they be located? Given a fire alarm of unknown severity, how many companies should be dispatched to it? These two questions are fundamental issues in the deployment of the City's fire-fighting resources.

With so many mathematically bowdlerized, and computerized, versions of the application of systems analysis abroad it is a pleasure to welcome this purely descriptive account of the application of decision system analysis (DSA) to four marketing decision systems. Professors Capon and Hulbert describe the application of DSA to pricing, forecasting, advertising, and new product development that they carried out with the cooperation of a large, multinational, British firm specialized in the marketing of processed raw materials to secondary processors.

This research paper presents an in-depth study of two systems developed by a British oligopolist's one system for sales volume forecasting, the other system for day-to-day decisions on pricing. The paper describes two decision systems employed by a firm in an industry characterized as undifferentiated oligopoly; the development of terms of trade to suit market conditions and of short-term expectations with regard to volumes.

Article reprinted with permission from the Journal of Marketing Research, published by the American Marketing Association, Don Sexton, 11, no. 1 (February 1974), pp. 109-14.

An examination of research studies that assume the existence of the sleeper effect concept has revealed surprising results: this effect may be observed only under certain restrictive design conditions-with subsets of the population divided on the basis of personality characteristics.

Interpersonal communication in marketing is approached from a perspective that focuses on communication signs. A classification scheme is presented and relevant literature surveyed. Directions for future research are suggested.

In the study of consumer behavior, economics and marketing may perhaps seem headed on divergent paths. Economics models of man typically appear deterministic, while marketing models of man often are stochastic. This article links the microeconomic theory of demand (in a oligopoly situation) to a simple stochastic model of consumer behavior and, with data for one product, compares the empirical success of that model with those of various other models found in the literature.

The degeneration of orderly relationships between city governments and their employees seriously complicates the nature of government and democracy in urban America. While most cities have not yet experienced major minimal labor breakdowns, most city governments do suffer from seemingly chronic conditions, like inadequate revenues and spiraling costs, which easily can serve as catalysts for municipal labor crises. Data show that serious labor relations problems are no longer limited to a few unfortunate cities like New York, the subject of this study.

The purpose of this paper is to discover a theoretically sound model of asset valuation by reference to the basic underlying concept of Financial Position. It will be shown that several models of asset valuation can be developed from alternative assumptions or definitions of Financial Position, but that the application of certain metaphysical constraints brings about the rejection of some of these models.

Several problems in the assignment of parallel redundant components to systems composed of elements subject to failure are considered. In each case the problem is to make an assignment which maximizes the system reliability subject to system constraints. Three distinct problems are treated. The first is the classical problem of maximizing system reliability under total cost or weight constraints when components are subject to a single type of failure.

This monograph reports on developing research that assesses the risk of equity investing from financial statements. The relevant information is conveyed by accounting numbers generated under accounting principles that respond to risk and its resolution, namely the realization principle and conservative accounting for investment. The recognition of this information leads to a financial statement analysis that extracts the risk information, to a reevaluation of performance metrics, and to revisions in risk factor models in asset pricing that utilize accounting information.

Bank balance sheet lending is commonly viewed as the predominant form of lending. We document and study two margins of adjustment that are usually absent from this view using microdata in the $10 trillion U.S. residential mortgage market. We first document the limits of the shadow bank substitution margin: shadow banks substitute for traditional “deposit-taking” banks in loans which are easily sold, but are limited from activities requiring on-balance-sheet financing.