Double moral hazard in a supply chain with consumer learning

When an innovative product is introduced into the market, consumers are often uncertain about the product value. Over time they may learn the value of product. This paper studies the impact of consumer learning on the firms' marketing efforts and revenue sharing strategies in a supply chain that sells an innovative product to consumers over multiple periods. Both the supplier and the retailer can exert marketing efforts to influence consumers' beliefs about the product and improve the product demand. Because the supplier and the retailer are independent entities with self-interested objectives, double moral hazard exists in the supply chain. We find that the supplier and retailer exert more marketing efforts in the presence of consumer learning but the marketing efforts decrease as consumers learn more about the product. We also examine the revenue-sharing strategies and find that supplier shares more revenue to the retailer when they cooperate for a longer time horizon. The total profit of the supply chain may be higher when there is information asymmetry between the supplier and retailer. This finding suggests that information sharing is not always beneficial to improve supply chain coordination

Vertical integration and firm boundaries : the evidence

Since Ronald H. Coase's (1937) seminal paper, a rich set of theories has been developed that deal with firm boundaries in vertical or input–output structures. In the last twenty-five years, empirical evidence that can shed light on those theories also has been accumulating. We review the findings of empirical studies that have addressed two main interrelated questions: First, what types of transactions are best brought within the firm and, second, what are the consequences of vertical integration decisions for economic outcomes such as prices, quantities, investment, and profits. Throughout, we highlight areas of potential cross-fertilization and promising areas for future work

Vertical Integration and Firm Boundaries : The Evidence

Understanding what determines firm boundaries and the choice between interacting in a firm or a market is not only the fundamental concern of the theory of the firm, but it is also one of the most important issues in economics. Data on value added, for example, reveal that in the US, transactions that occur in firms are roughly equal in value to those that occur in markets. The economics profession, however, has devoted much more attention to the workings of markets than to the study of firms, and even less attention to the interface between the two. Nevertheless, since Coase’s (1937) seminal paper on the subject, a rich set of theories has been developed that deal with firm boundaries in vertical or input/output structures. Furthermore, in the last 25 years, empirical evidence that can shed light on those theories has been accumulating.Vertical integration ; firm boundaries ; vertical mergers ; firms versus markets

Heard It through the Grapevine: Traceability, Intelligence Cohort, and Collaborative Hazard Intelligence

abstract: Designing a hazard intelligence platform enables public agencies to organize diversity and manage complexity in collaborative partnerships. To maintain the integrity of the platform while preserving the prosocial ethos, understanding the dynamics of “non-regulatory supplements” to central governance is crucial. In conceptualization, social responsiveness is shaped by communicative actions, in which coordination is attained through negotiated agreements by way of the evaluation of validity claims. The dynamic processes involve information processing and knowledge sharing. The access and the use of collaborative intelligence can be examined by notions of traceability and intelligence cohort. Empirical evidence indicates that social traceability is statistical significant and positively associated with the improvement of collaborative performance. Moreover, social traceability positively contributes to the efficacy of technical traceability, but not vice versa. Furthermore, technical traceability significantly contributes to both moderate and high performance improvement; while social traceability is only significant for moderate performance improvement. Therefore, the social effect is limited and contingent. The results further suggest strategic considerations. Social significance: social traceability is the fundamental consideration to high cohort performance. Cocktail therapy: high cohort performance involves an integrative strategy with high social traceability and high technical traceability. Servant leadership: public agencies should exercise limited authority and perform a supporting role in the provision of appropriate technical traceability, while actively promoting social traceability in the system.Dissertation/ThesisDoctoral Dissertation Business Administration 201

Inefficiencies in Digital Advertising Markets

Digital advertising markets are growing and attracting increased scrutiny. This article explores four market inefficiencies that remain poorly understood: ad effect measurement, frictions between and within advertising channel members, ad blocking, and ad fraud. Although these topics are not unique to digital advertising, each manifests in unique ways in markets for digital ads. The authors identify relevant findings in the academic literature, recent developments in practice, and promising topics for future research

Are Mercury Advisories Effective? Inofrmation, Education, and Fish Consumption

Mercury exposure has emerged as one of the most prominent environmental health and food safety concerns. The primary danger is the consumption of contaminated fish by young children, nursing mothers, and pregnant women. To mitigate the risks, in January 2001 the FDA issued a national advisory urging at-risk consumers to limit fish consumption. Did the FDA advisory reduce mercury exposure to at-risk groups? We find that consumers most likely to be aware of and understand the advisory did significantly reduce fish consumption relative to a control group. Both education and newspaper readership are important determinants of consumption response among at-risk groups, suggesting that information acquisition and assimilation are key factors for risk avoidance. Some newspapers readers not specifically targeted by the advisory also responded. Disturbingly, we do not find a response to the mercury advisory among the relatively large group of at-risk households which met neither the education nor readership criteria.Consumer Economics, Empirical, Analysis, Government, Policy, Regulation, Public, Health, Water, Pollution

Credit bureaus between risk-management, creditworthiness assessment and prudential supervision

"This text may be downloaded for personal research purposes only. Any additional reproduction for other purposes, whether in hard copy or electronically, requires the consent of the author. If cited or quoted, reference should be made to the full name of the author, the title, the working paper or other series, the year, and the publisher."This paper discusses the role and operations of consumer Credit Bureaus in the European Union in the context of the economic theories, policies and law within which they work. Across Europe there is no common practice of sharing the credit data of consumers which can be used for several purposes. Mostly, they are used by the lending industry as a practice of creditworthiness assessment or as a risk-management tool to underwrite borrowing decisions or price risk. However, the type, breath, and depth of information differ greatly from country to country. In some Member States, consumer data are part of a broader information centralisation system for the prudential supervision of banks and the financial system as a whole. Despite EU rules on credit to consumers for the creation of the internal market, the underlying consumer data infrastructure remains fragmented at national level, failing to achieve univocal, common, or defined policy objectives under a harmonised legal framework. Likewise, the establishment of the Banking Union and the prudential supervision of the Euro area demand standardisation and convergence of the data used to measure debt levels, arrears, and delinquencies. The many functions and usages of credit data suggest that the policy goals to be achieved should inform the legal and institutional framework of Credit Bureaus, as well as the design and use of the databases. This is also because fundamental rights and consumer protection concerns arise from the sharing of credit data and their expanding use