http://repub.eur.nl/res/col/9706/ List of Publications en http://repub.eur.nl/static-eur/img/logo.png http://repub.eur.nl http://repub.eur.nl/res/pub/38965/ 2013-02-11T00:00:00Z Network externalities spur the growth of networks and the adoption of network goods in two ways. First, they make it more attractive to join a network the larger its installed base. Second, they create incentives for network members to actively recruit new members. Despite indications that the latter "peer effect" can be more important for network growth than the installed-base effect, it has so far been largely ignored in the literature. We address this gap using game-theoretical models. When all early adopters can band together to exert peer influence-an assumption that fits, e.g., the case of firms supporting a technical standard-we find that the peer effect induces additional growth of the network by a factor. When, in contrast, individuals exert peer influence in small groups of size n, the increase in network size is by an additive constant-which, for small networks, can amount to a large relative increase. The difference between small, local, personal networks and large, global, anonymous networks arises endogenously from our analysis. Fundamentally, the first type of networks is "tie-reinforcing," the other, "tie-creating". We use survey data from users of the Internet services, Skype and eBay, to illustrate the main logic of our theoretical results. As predicted by the model, we find that the peer effect matters strongly for the network of Skype users-which effectively consists of numerous small sub-networks-but not for that of eBay users. Since many network goods give rise to small, local networks, our findings bear relevance to the economics of network goods and related social networks in general. Henkel, J. Block, J.H. http://repub.eur.nl/res/pub/38711/ 2013-01-28T00:00:00Z This article revisits the accuracy of inflation forecasting using activity and expectations variables. We apply Bayesian model averaging across different regression specifications selected from a set of potential predictors that includes lagged values of inflation, a host of real activity data, term structure data, (relative) price data, and surveys. In this model average, we can entertain different channels of structural instability, by either incorporating stochastic breaks in the regression parameters of each individual specification within this average, or allowing for breaks in the error variance of the overall model average, or both. Thus, our framework simultaneously addresses structural change and model uncertainty that would unavoidably affect any inflation forecast model. The different versions of our framework are used to model U.S. personal consumption expenditures (PCE) deflator and gross domestic product (GDP) deflator inflation rates for the 1960–2011 period. A real-time inflation forecast evaluation shows that averaging over many predictors in a model that at least allows for structural breaks in the error variance results in very accurate point and density forecasts, especially for the post-1984 period. Our framework is especially useful when forecasting, in real-time, the likelihood of lower-than-usual inflation rates over the medium term. This article has online supplementary materials. Groen, J.J.J. Paap, R. Ravazzolo, F. http://repub.eur.nl/res/pub/34909/ 2012-12-01T00:00:00Z Dynamic ride-share systems aim to bring together travelers with similar itineraries and time schedules on short-notice. These systems may provide significant societal and environmental benefits by reducing the number of cars used for personal travel and improving the utilization of available seat capacity. Effective and efficient optimization technology that matches drivers and riders in real-time is one of the necessary components for a successful dynamic ride-share system. We systematically outline the optimization challenges that arise when developing technology to support ride-sharing and survey the related operations research models in the academic literature. We hope that this paper will encourage more research by the transportation science and logistics community in this exciting, emerging area of public transportation. Agatz, N.A.H. Erera, A.L. Savelsbergh, M.W.P. Wang, X. http://repub.eur.nl/res/pub/38934/ 2012-12-01T00:00:00Z Firms increasingly rely on suppliers to perform tasks in new product development (NPD). Research has only recently begun to focus on the processes to manage this supplier development responsibility, and has hardly investigated how firms collect and analyze information regarding the cost and performance of alternative supplier offerings. Our study addresses this gap, through a field survey among 144 paired samples of project leaders and cost analysts involved in the same NPD projects. On the basis of literature and qualitative research, we conceptualize a substantive model. We first use a substantive validity assessment to vet the measures for the proposed constructs. We then test the substantive model with structural equation modeling using a multiple-sample analysis. The results strongly show that monetary quantification of differences and detail gathering play significant roles in successfully leveraging supplier development responsibility. The findings support the hypothesis that the extent of development responsibility that suppliers have leads the development team to a more focused monetary quantification of the differences in alternative supplier offerings. Monetary quantification of differences has a significant, positive effect on the extent of supporting-detail gathering and on the development speed of the project, whereas supporting-detail gathering has a significant, positive effect on the product advantage of the new product as well as development speed. These findings are robust across the two functional perspectives. Our study complements the literature on interfirm control and monitoring by demonstrating the effects of selective and focused output controls. Wynstra, J.Y.F. Anderson, J.C. Narus, J.A. Wouters, M. http://repub.eur.nl/res/pub/38967/ 2012-11-08T00:00:00Z Two field experiments examine whether providing information to consumers regarding competitive products builds trust. Established theory suggests that (1) competitive information leads to trust because it demonstrates the firm is altruistic, and (2) trust leads to brand consideration and sales. In year 1, an American automaker provided experiential, product-feature, word-of-mouth, and advisor information to consumers in a 2 × 2 × 2 × 2 random-assignment field experiment that lasted six months. Main-effect analyses, conditional-logit models, and continuous-time Markov models suggest that competitive information enhances brand consideration and possibly sales and that the effects are mediated through trust. However, in a modification to extant theory, effects are significant only for positively valenced information. The year-2 experiment tested whether a signal that the firm was willing to share competitive information would engender trust, brand consideration, and sales. Contrary to many theories, the signal did not achieve these predicted outcomes because, in the year-2 experiment, consumers who already trusted the automaker were more likely to opt in to competitive information. In addition to interpreting the field experiments in light of extant theory, we examine cost effectiveness and describe the automaker's successful implementation of revised competitive-information strategies. Liberali, G. Urban, G.L. Hauer, J.R. http://repub.eur.nl/res/pub/32835/ 2012-11-01T00:00:00Z Research suggests that unit-level ambidexterity positively impacts subsequent unit performance but theory and testing on this impact remain impoverished. We develop a cross-level model suggesting that structural and resource attributes of the organizational context significantly shape the relationship between unit ambidexterity and performance. Using multisource and lagged data from 285 organizational units located within 88 autonomous branches, results from hierarchical linear modeling show that this relationship is boosted when the organization is decentralized, more resource munificent, or less resource interdependent. We also find that structural differentiation of the organization does not condition the unit ambidexterity-performance relationship. Through this cross-level theory and testing, we develop a richer explanation of the effectiveness of ambidextrous units operating in multiunit contexts. Jansen, J.J.P. Simsek, Z. Cao, Q. http://repub.eur.nl/res/pub/37823/ 2012-11-01T00:00:00Z In this paper, we investigate the role of execution risk in high-frequency trading through arbitrage strategies. We show that if rational agents face uncertainty about completing their arbitrage portfolios, then arbitrage is limited even in markets with perfect substitutes and convertibility. Using a simple model, we demonstrate that this risk arises from the crowding effect of competing arbitrageurs entering the same trade and inflicting negative externalities on each other. Our empirical results provide evidence that support the relevance of execution risk in high-frequency arbitrage. Kozhan, R. Tham, W.W. http://repub.eur.nl/res/pub/38045/ 2012-11-01T00:00:00Z The social and neural sciences share a common interest in understanding the mechanisms that underlie human behaviour. However, interactions between neuroscience and social science disciplines remain strikingly narrow and tenuous. We illustrate the scope and challenges for such interactions using the paradigmatic example of neuroeconomics. Using quantitative analyses of both its scientific literature and the social networks in its intellectual community, we show that neuroeconomics now reflects a true disciplinary integration, such that research topics and scientific communities with interdisciplinary span exert greater influence on the field. However, our analyses also reveal key structural and intellectual challenges in balancing the goals of neuroscience with those of the social sciences. To address these challenges, we offer a set of prescriptive recommendations for directing future research in neuroeconomics. Levallois, C. Clithero, J.A. Wouters, P. Smidts, A. Huettel, S. http://repub.eur.nl/res/pub/38933/ 2012-11-01T00:00:00Z While convertible offerings announced between 1984 and 1999 induce average abnormal stock returns of -1.69%, convertible announcement effects over the period 2000-2008 are more than twice as negative (-4.59%). We hypothesize that this evolution is attributable to a shift in the convertible bond investor base from long-only investors towards convertible arbitrage funds. These funds buy convertibles and short the underlying stocks, causing downward price pressure. Consistent with this hypothesis, we find that the differences in announcement returns between the Traditional Investor period (1984-1999) and the Arbitrage period (2000-September 2008) disappear when controlling for arbitrage-induced short selling associated with a range of hedging strategies. Post-issuance stock returns are also in line with the arbitrage explanation. Average announcement effects of convertibles issued during the Global Financial Crisis are even more negative (-9.12%), due to a combination of short-selling price pressure and issuer, issue, and macroeconomic characteristics associated with these offerings. Duca, E. Dutordoir, M.D.R.P. Veld, C. Verwijmeren, P. http://repub.eur.nl/res/pub/38949/ 2012-11-01T00:00:00Z The effectiveness of any sanction depends on the costs of avoiding its restrictions. We examine whether bearish option strategies were substitutes for short sales during the September 2008 short-sale ban. We find a significant diminution in option volumes and a significant increase in option bid-ask spreads for banned stock relative to unbanned stock during the ban period. Apparent violations of the put-call parity bound became significantly more frequent for banned stocks during the ban period. We conclude that the ban acted as an effective restriction on trading in options. Grundy, B.D. Lim, B. Verwijmeren, P. http://repub.eur.nl/res/pub/37797/ 2012-10-24T00:00:00Z Top managers of multinational corporations are increasingly confronted with an accelerating rate of change in the external environment. Yet strategic renewal literature has devoted limited attention to the organizational mechanisms enabling firms to align internal with external rates of change, so as to achieve a dynamic firm-environment fit over time. This paper addresses that gap by taking a knowledge-based perspective. We develop a framework clarifying how a firm's potential absorptive capacity enables it to align internal with external rates of change. We illustrate the framework empirically by analyzing the rate of change in strategic renewal actions of Royal Dutch Shell as an indicator of the company's internal rate of change in the period 1980-2007, and by comparing it with external rates of change in the oil industry over the same period. The findings show that Shell's potential absorptive capacity was positively related to the alignment of internal and external rates of change. In addition, we find evidence that the degree of alignment was positively related to the company's performance during the observation period. Our study implies that managers who are aiming to align internal and external rates of change over time should: 1) monitor external rates of change through environmental scanning and boundary spanning, 2) create shared understanding of the long-term implications of change, 3) identify drivers of internal rates of change and understand how to pace the rate of strategic renewal actions, and finally, 4) maintain baseline levels of potential absorptive capacity, since increasing potential absorptive capacity takes time and requires a long-term perspective. Ben-Menahem, M.G.M. Kwee, Z. Volberda, H.W. Bosch, F.A.J. van den http://repub.eur.nl/res/pub/37768/ 2012-10-22T00:00:00Z Although the influence of identity on consumer behavior has been documented in many streams of literature, the absence of a consistent definition of identity and of generally accepted principles regarding the drivers of identity-based behavior complicates comparisons across these literatures. To resolve that problem, we propose a simple but inclusive definition of identity. Identity can be defined as any category label with which a consumer self-associates that is amenable to a clear picture of what a person in that category looks like, thinks, feels and does. Building from this definition, we propose the following five basic principles that can help researchers model the process of identity formation and expression: (1) Identity Salience: identity processing increases when the identity is an active component of the self; (2) Identity Association: the non-conscious association of stimuli with a positive and salient identity improves a person's response to the stimuli; (3) Identity Relevance: the deliberative evaluation of identity-linked stimuli depends on how diagnostic the identity is in the relevant domain; (4) Identity Verification: individuals monitor their own behaviors to manage and reinforce their identities; and (5) Identity Conflict: identity-linked behaviors help consumers manage the relative prominence of multiple identities. To illustrate the potential usefulness of these principles for guiding identity research, we discuss new avenues for identity research and explain how these principles could help guide investigations into these areas. Reed II, A. Forehand, M.R. Puntoni, S. Warlop, L. http://repub.eur.nl/res/pub/37495/ 2012-10-15T00:00:00Z Clinical trials are the main source of information for the efficacy and safety evaluation of medical treatments. Although they are of pivotal importance in evidence-based medicine, there is a lack of usable information systems providing data-analysis and decision support capabilities for aggregate clinical trial results. This is partly caused by unavailability (i) of trial data in a structured format suitable for re-analysis, and (ii) of a complete data model for aggregate level results. In this paper, we develop a unifying data model that enables the development of evidence-based decision support in the absence of a complete data model. We describe the supported decision processes and show how these are implemented in the open source ADDIS software. ADDIS enables semi-automated construction of meta-analyses, network meta-analyses and benefit-risk decision models, and provides visualization of all results. Valkenhoef, G. van Tervonen, T. Zwinkels, T. Brock, B. de Hillege, H.L. http://repub.eur.nl/res/pub/38938/ 2012-10-01T00:00:00Z Current attempts to reform financial markets presume that shareholder empowerment benefits shareholders. We investigate the wealth effects associated with the Securities and Exchange Commission’s rule to facilitate director nominations by shareholders. Our results are not in line with shareholder empowerment creating value: The average daily abnormal returns surrounding events that increase (decrease) the probability of the proposal’s passage are significantly negative (positive). Furthermore, given an increase in the probability of the proposal’s passage, firms whose shareholders are more likely to use the rule to nominate directors experience more negative abnormal returns. Akyol, A. Lim, W.F. Verwijmeren, P. http://repub.eur.nl/res/pub/38940/ 2012-10-01T00:00:00Z Reuse practices contribute to the environmental and economical sustainability of production and distribution systems. Surprisingly, reuse closed-loop supply chains (CLSC) have not been widely researched for the moment. In this paper, we explore the scientific literature on reuse and we propose a definition for reusable articles and a typology integrating different categories of articles (transportation items, packaging materials, tools) under the term 'reusable articles'. Our definition shows how reusable articles are different from other types of recovery, such as remanufacturing or recycling. We also point out specific research needs for those articles. We have based our results on a set of case studies developed in real industrial settings, which have also been contrasted with cases available in the existing literature. Carrasco-Gallego, R. Ponce-Cueto, E. Dekker, R. http://repub.eur.nl/res/pub/37425/ 2012-10-01T00:00:00Z In recent years academic research has focused on understanding and modeling the survey response process. This paper examines an understudied systematic response tendency in surveys: the extent to which observed responses are subject to state dependence, i.e., response carryover from one item to another independent of specific item content. We develop a statistical model that simultaneously accounts for state dependence, item content, and scale usage heterogeneity. The paper explores how state dependence varies by response category, item characteristics, item sequence, respondent characteristics, and whether it becomes stronger as the survey progresses. Two empirical applications provide evidence of substantial and significant state dependence. We find that the degree of state dependence depends on item characteristics and item sequence, and it varies across individuals and countries. The article demonstrates that ignoring state dependence may affect reliability and predictive validity, and it provides recommendations for survey researchers. Jong, M.G. de Lehmann, D.R. Netzer, O. http://repub.eur.nl/res/pub/37801/ 2012-10-01T00:00:00Z This paper deals with the service parts end-of-life inventory problem in a circumstance that demands for service parts are differentiated. Customer differentiation might be due to criticality of the demand or based on various service contracts. In both cases, we model the problem as a finite horizon stochastic dynamic program and characterize the structure of the optimal inventory policy. We show that when customers are differentiated based on the demand criticality then the optimal structure consists of time and state dependent threshold levels for inventory rationing. In case of differentiation based on service contracts, we show that in addition to rationing thresholds we also need contract extension thresholds by which the system decides whether to offer an extension to an expiring contract or not. By numerical experiments in both cases, we identify the value of incorporating such decisions in service parts end-of-life inventory management with customer differentiation. Moreover, we show that these decisions not only result in cost efficiency but also decrease the risk of part obsolescence drastically. Pourakbar, M. Dekker, R. http://repub.eur.nl/res/pub/37816/ 2012-09-01T00:00:00Z Conventional wisdom in the diversity literature holds that job-related dimensions of diversity are the domain of positive performance, whereas demographic dimensions of diversity are the domain of negative performance effects. In a meta-analysis (N=146 studies, 612 effect sizes), we show that this conclusion may be based on rater biases; it does not apply to studies involving more objective assessments of performance, assessments that cannot be influenced by knowledge of a team's composition. We also show that the influence of job-related diversity is moderated by task complexity and that job-related diversity is more positively related to innovative performance than to in-role performance. We discuss how these results invite a reconsideration of the role of the job-related/demographic diversity distinction and provide suggestions on how to further advance our understanding of diversity's effects. Dijke, M.H. van Engen, M.L. van Knippenberg, D.L. van http://repub.eur.nl/res/pub/23233/ 2012-09-01T00:00:00Z Emphasis on effective demand management is becoming increasingly recognized as an important factor in operations performance. Operations models that account for supply costs and constraints as well as a supplier's ability to influence demand characteristics can lead to an improved match between supply and demand. This paper presents a class of optimization models that allow a supplier to select, from a set of potential markets, those markets that provide maximum profit when production/procurement economies of scale exist in the supply process. The resulting optimization problem we study possesses an interesting structure and we show that although the general problem is NP -complete, a number of relevant and practical special cases can be solved in polynomial time. We also provide a computationally very efficient and intuitively attractive heuristic solution procedure that performs extremely well on a large number of test instances. Heuvel, W. van den Kundakcioglu, O.E. Geunes, J. Romeijn, H.E. Sharkey, T.C. Wagelmans, A.P.M. http://repub.eur.nl/res/pub/26661/ 2012-09-01T00:00:00Z We explore genetic and neurological bases for customer orientation (CO) and contrast them with sales orientation (SO). Study 1 is a field study that establishes that CO, but not SO, leads to greater opportunity recognition. Study 2 examines genetic bases for CO and finds that salespeople with CO are more likely to have the 7R variant of the DRD4 gene. This is consistent with basic research on dopamine receptor activity in the brain that underlies novelty seeking, the reward function, and risk taking. Study 3 examines the neural basis of CO and finds that salespeople with CO, but not SO, experience greater activation of their mirror neuron systems and neural processes associated with empathy. Managerial and research implications are discussed. Bagozzi, R.P. Verbeke, W.J.M.I. Berg, W.E. van den Rietdijk, W.J.R. Dietvorst, R.C. Worm, L.