Cognitive Dissonance and Customer Allegiance in a Mixed Oligopoly

The purpose of this article is to examine the effect of cognitive dissonance in a mixed oligopoly where a local cooperative competes with an investor-owned firm (IOF) for the local market. The article explicitly incorporates individuals' beliefs regarding the quality of the two organizations as a choice variable in the utility function and individuals trade off utility from beliefs against utility resulting from their actions. The proposed model considers a case where managerial decisions or the introduction of new products forces consumers to modify their initial beliefs regarding the (superior) quality of their cooperative. Analytical results demonstrate the changes in equilibrium that result from cognitive dissonance.Consumer/Household Economics,

Mental Frames and Organizational Decision-making: Facing the Challenges of Change

Adjusting to the strategic, business and economic changes requires efficient decision-making procedures which can in turn be highly affected by the underlying mental frames that the leaders of the organization hold. This article examines the impact of these mental frames on decision-making with respect to a specific attribute of a decision-making process: the belief that a CEO of a co-operative holds regarding member commitment. The analysis develops a simple theoretical model that shows how the co-op CEO’s obsolete mental frame creates distortions on decision making that can have negative effects on co-op’s strategic decisions and its market share. The starting point of the analysis is the case of the Saskatchewan Wheat Pool (SWP) – a Canadian grain handling, agri-food processing and marketing company that had little success in adapting to the changing economic environment of the Canadian agriculture.Industrial Organization,

Cognitive dissonance, mental frames and the financial value of agricultural co-operatives

The co-operative as an economic and social institution has long been recognized for its contribution to economic development as well as its positive effect on local communities. However, over the last decade or so substantial structural changes in the agricultural sector have undermined some of the most prominent North American co-operatives. In some cases, co-ops asked for bankruptcy protection, others ceased operations while some were transformed to for-profit firms. The present study offers three essays that explore the challenges that co-operatives are facing in terms of their relationship with their members in local markets, the decision-making process of their leaders and the co-ops' role in the modern economy. These first two essays are linked by the fact that they both develop models that are about cognitions. Examining cognition offers some new insights to understanding the process behind the decline of agricultural co-ops. In the first essay the model examines consumers' cognitions, while the model in the second essay examines management's cognitions. The essays differ on the agent's ability to change the perceptions that result from those cognitions. Essay One assumes that consumers' perceptions are partially flexible and thus can change over time with some cost; on the other hand, essay Two assumes that beliefs are inflexible due to the high cost of changing them. Essay One examines the relationship between a co-operative and its membership in a local market using an economic psychological approach. More specifically, the essay presents a modified rational-choice model to investigate how cognitive dissonance can influence members' loyalty. The effect of cognitive dissonance is analyzed in a case where a local co-operative operates alongside with an investor-owned firm (IOF) in a market. The model illustrates how cognitive dissonance can give rise to switching costs for those consumers who wish to switch to the IOF. Analytical results demonstrate the effect of these switching costs on equilibrium market shares and discuss how a drop in the dissonance cost because of managerial decisions by the co-op can result in dramatic drops in its market share. Essay Two illustrates how management's mental frame can be incorporated into an economic model and develops a theoretical underpinning for the link between a strong mental frame and the financial difficulties that a firm might experience. The case of the Saskatchewan Wheat Pool with its Project Horizon plan is proposed as an example of a situation where the established mental frame gave rise to a belief regarding future member support that had a significant influence on the decision-making process of the co-op's CEO. The analysis includes a game theoretic model of a duopoly between a co-operative and an IOF, where mental framing is explicitly incorporated into the primitives of the model. Analytical results illustrate how the CEO's belief regarding member commitment can influence decision-making and therefore affect the market share and profits of the firm. Essay Three uses non-parametric econometric techniques to examine the stock price effect of a co-op's acquisition by a publicly-traded IOF. The potential for this study emerged as a result of the takeover of Dairyworld, a dairy co-op, by Saputo, a publicly-traded private corporation. The study uses the prediction-error approach to estimate Saputo's returns after the acquisition as a deviation from its expected returns. A non-parametric bootstrap technique simulates Saputo's stock returns and examines its behavior around the acquisition date. The empirical results are consistent with a number of hypotheses, including the pro-competitive role that co-operatives are believed to have in the economy. The essay also includes a comprehensive discussion regarding the greater financial value that co-ops have for IOFs

The Transformation Of Valio: A Case Study

Valio, a well-established “national institution” in Finland, had a rich background based on cooperative tradition and extensive regional spread. In the late 1980s and early 1990s, the company had to undergo a process of change and re-organization in order to address the challenges arising from the EU accession. After years of restructuring and changing in its business model, Valio remains a major player in Finland and one of the most well-known brands in the region. The purpose of this case study is to stimulate a critical evaluation of the processes Valio undertook in order to address the coming challenges. The case is especially suited as a starting point for a broader discussion on organizational change and adaptation. Teaching notes are provided with proposals and questions

Organizational Innovation in the Face of Institutional Change: The Case of the Finnish Dairy Sector

Firms in the agri-food industry are embedded in a system of institutions, regulations and policies that shape their economic environment and affect their conduct and performance. Changes in this system can propose new challenges for the firms that need to adequately and efficiently change and adapt to the emerging environment. The following article examines how deep structural changes in the institutional and regulatory setting can be effectively addressed by organizational innovation and what can be the catalysts behind a successful innovation effort. In doing so the analysis examines the case of Valio, the largest Finnish dairy company and its reconstruction effort due to Finland’s EU accession in 1995. After years of restructuring and changing its business model the company remains a major player in Finland and one of the most well-known brands in the region

Organizational Innovation and Institutional Change: The Case of Valio in Finland

Firms in the agri-food industry are embedded in a system of institutions, regulations and policies that shape their economic environment and affect their conduct and performance. Changes in this system can propose new challenges for the firms that need to adequately and efficiently change and adapt to the emerging environment. The following article examines how deep structural changes in the institutional and regulatory setting can be effectively addressed by organizational innovation and what can be the catalysts behind a successful innovation effort. In doing so the analysis examines the case of Valio, the largest Finnish dairy company and its reconstruction effort due to Finland’s EU accession in 1995. After years of restructuring and changing its business model the company remains a major player in Finland and one of the most well-known brands in the region

Fast dimension spectrum for a potential with a logarithmic singularity

We regard the classic Thue--Morse diffraction measure as an equilibrium measure for a potential function with a logarithmic singularity over the doubling map. Our focus is on unusually fast scaling of the Birkhoff sums (superlinear) and of the local measure decay (superpolynomial). For several scaling functions, we show that points with this behavior are abundant in the sense of full Hausdorff dimension. At the fastest possible scaling, the corresponding rates reveal several remarkable phenomena. There is a gap between level sets for dyadic rationals and non-dyadic points, and beyond dyadic rationals, non-zero accumulation points occur only within intervals of positive length. The dependence between the smallest and the largest accumulation point also manifests itself in a non-trivial joint dimension spectrum.Comment: 26 pages, 1 figur

Learning for Sustainability in Horticultural Production in Arctic Norway

Sustainability learning is gaining popularity as an important field within sustainability research, where farm sustainability can be understood as a learning process. In this study, we seek to reveal the sustainability learning process of farmers, utilizing a framework distinguishing contextual factors (where? and when?), knowledge (what?), motivation (why?), and process (how?). The article presents a participatory inquiry mixed-methods approach, utilizing results from sustainability assessments on five farms with the SMART-farm tool as a unifying starting point for further discussions on sustainability learning in farmers' interviews and stakeholder workshops. Empirically the study is set in the horticultural production in Arctic Norway, where few studies on sustainability have been undertaken. The study shows how both the complexity of the concept of farm sustainability and contextual factors influence the sustainability learning process, for instance by giving rise to a vast number of conflicting issues while working toward farm sustainability. The sustainability learning process is found to be predominantly a social learning process. The theoretic contribution of the study lies in its novel framework that can be used to reveal important aspects of the sustainability learning process, as well as to contribute to the literature on how to proceed from sustainability assessments to implementation. A key finding from the study is that farmers will require continuous assistance in their processes toward farm sustainability, but for this to be possible, knowledge, sources of knowledge, and learning platforms for holistic sustainability need to be established

A Mixed Methods Approach Towards Mapping and Economic Valuation of the Divici-Pojejena Wetland Ecosystem Services in Romania

Mapping and valuating ecosystem services has gained increasing attention over the last years and remains high in the research agenda. In this paper, a mixed methods approach is used to valuate ecosystem services provided by the Divici-Pojejena wetland in Romania. A qualitative part relied on focus group discussions and interviews to identify key stakeholders and the ecosystem services provided by the wetland site. The benefit transfer (BT) method was used for the monetary valuation of the identified ecosystem services that the wetland provides. Bird watching opportunities, water quality, and flood prevention services are among the highest valued services, while the amenity services are the least valued among all wetland services

A Clinical Prospective Study: Corneal alterations after cataract surgery with the technique of phacoemulsification

Abstract    The purpose of this study is to investigate the effect of ultrasound energy used during phacoemulsification on corneal structure, which is the most important refractive part of the eye. This will be achieved with the comparison of preoperative and postoperative parameters related to corneal thickness and endothelium and their correlation with clinical, intrasurgical and imaging diagnostic findings.    Methods: This is a clinical prospective study conducted in Evangelismos G.H.A. The patients’ enrollment was based on detailed medical history assessment, medication records as well as meticulous slit lamp examination, tonometry, best corrected visual acuity evaluation and thorough fundoscopy. Nuclear cataract sclerosis was evaluated with Lens Opacities Classification System III, and patients were scheduled for surgery. Preoperatively, with the use of specular microscopy (Tomey EM-3000; Tomey, Tennenlohe, Germany),  central corneal thickness and several endothelial indices were recorded. The same measurements took place the 1st, 7th and 30th postoperative day. All the surgical operations were done without complications.    Results: statistical analysis from preoperative and postoperative data showed that central corneal thickness, although elevated during the 1st and 7th postoperative day, did not present statistical significant difference in the final evaluation, with a mean elevation of only 3,9μm. Endothelial cell density levels though were reduced in all postoperative measurements (p<0,001). The final percentage endothelial cell loss was18,58%, with the most profound loss being accounted in the first postoperative week. Corneal edema and endothelial cell loss were correlated with poor visual acuity, reduced corneal curvature, increased nuclear sclerosis and prolonged time of ultrasound metrics.    Conclusion: the use of confocal microscopy is a useful tool in pointing significant differences of corneal structure after uneventfull cataract phacoemulsification. The evaluation of a larger cohort of patients and a prolonged follow up procedure could give further information concerning corneal alterations after surgery. Key words: cataract, phacoemulsification, cornea, lens, endothelium, ultrasound, confocal microscopy List of Abbreviations: CCT: central corneal thickness, SD: standard deviation, CV: coefficient of variation, , ECD: endothelial cell density, ECL%: endothelial cell loss%,     &nbsp