Firm Size and Export Intensity

This paper presents a unifying theory, explaining the different relationships between firm size and export intensity that have been found in previous studies. We propose that transaction costs economies and different types of resources induce a moderating effect on the firm size and export intensity relationship. Data on international businesses in the Netherlands are used to test the the

Customs-Related Transaction Costs, Firm Size and International Trade Intensity

The costs of paperwork and delays needed to clear international customs are generally perceived as a time-consuming impediment to international trade. However, few studies have empirically examined the determinants and the impact of this type of government-imposed transaction costs. This paper analyses the role of firm size as a determinant of customs-related transaction costs, as well a

The Customer Cannot Choose

People can choose and they make many choices each and every day. However, most people are unaware of how strong their environment influences the choices they make. In his inaugural address, Bas Donkers highlights the impact of what people see (and what they don’t see), what people experience (and what they don’t experience), or more general, the impact of salient decision characteristics. Evidence will be provided in a number of applications that range from online consumer search behavior to physician prescription behavior. The lessons to be learned from this for marketers and policymakers are highlighted in the context of pension savings decisions and health state valuations

Testing predictive performance of binary choice models

Binary choice models occur frequently in economic modeling. A measure of the predictive performance of binary choice models that is often reported is the hit rate of a model. This paper develops a test for the outperformance of a predictor for binary outcomes over a naive prediction method, which predicts the outcome that is most often observed. This is done for a general class of prediction models, including the well known Probit and Logit models. In many cases the test is easy to compute. The test is then applied and compared to a general test of Pesaran and Timmermann (1992) for dependence between predictors and realizations

Predicting Customer Potential Value: an application in the insurance industry

For effective Customer Relationship Management (CRM), it is essential to have information on the potential value of customers. Based on the interplay between potential value and realized value, managers can devise customer specific strategies. In this article we introduce a model for predicting the potential value of a current customer. Furthermore, we discuss and apply d

Understanding Brand and Dealer Retention in the New Car Market: The Moderating Role of Brand Type

Dealers are assumed to contribute positively to brand retention. We argue that the type of brand moderates the effect of dealer performance on brand retention. Moreover, dealer retention is determined by different drivers for dealers selling different types of brands. To analyze our claims empirically, we collected data on brand retention and dealer retention among consumers who recently purchased a new car. Our findings show that dealers of prestige and economy brands do not contribute to brand retention. Only dealers selling volume brands are in a position to improve brand retention rates. A simulation reveals however that the contribution of volume dealers to brand retention is rather small in comparison to the impact of brand-related variables on brand retention. In line with the notion of brand-dealer fit we also find that the impact of dealer extrinsic quality (e.g., dealer showrooms) and dealer payment equity on dealer retention differs between prestige, volume, and economy brands. Extrinsic dealer quality affects deale

Model-based Purchase Predictions for Large Assortments

Being able to accurately predict what a customer will purchase next is of paramount importance to successful online retailing. In practice, customer purchase history data is readily available to make such predictions, sometimes complemented with customer characteristics. Given the large assortments maintained by online retail- ers, scalability of the prediction method is just as important as its accuracy. We study two classes of models that use such data to predict what a customer will buy next: A novel approach that uses latent Dirichlet allocation (LDA), and mixtures of Dirichlet-Multinomials (MDM). A key benefit of a model-based approach is the potential to accommodate observed customer heterogeneity through the inclusion of predictor variables. We show that LDA can be extended in this direction while retaining its scalability. We apply the models to purchase data from an online re- tailer and contrast their predictive performance with that of a collaborative filter and a discrete choice model. Both LDA and MDM outperform the other meth- ods. Moreover, LDA attains performance similar to that of MDM while being far more scalable, rendering it a promising approach to purchase prediction in large assortments

Predicting Customer Lifetime Value in Multi-Service Industries

Customer lifetime value (CLV) is a key-metric within CRM. Although, a large number of marketing scientists and practitioners argue in favor of this metric, there are only a few studies that consider the predictive modeling of CLV. In this study we focus on the prediction of CLV in multi-service industries. In these industries customer behavior is rather complex, because customers can purchase more than one service, and these purchases are often not independent from each other. We compare the predictive performance of different models, which vary in complexity and realism. Our results show that for our application simple models assuming constant profits over time have the best predictive performance at the individual customer level. At the customer base level more c

Savings Adequacy Uncertainty: Driver or Obstacle to Increased Pension Contributions?

Deciding how much to save for retirement is a difficult task that includes many uncertainties. In this paper, we use data from a representative Dutch household panel to study the impact of uncertainty regarding one's savings adequacy on retirement savings contributions and information search processes. We combine ideas from the literature in psychology and economics that provide opposing predictions regarding the impact of uncertainty on retirement savings contributions. Our results indicate that the effect of uncertainty is moderated by two factors: an individual's perceived adequacy of current savings and that individual's financial constraints. In particular, we find that uncertainty increases retirement contributions for those who believe that they save adequately; however, it hinders retirement contributions for those who believe that they save inadequately. This effect of uncertainty is further moderated by the availability of financial means: a reduction in uncertainty results in greater contributions to savings only when financial constraints are absent. We also find that uncertainty has both indirect and direct effects on savings information search. In particular, uncertainty indirectly affects savings information search because it impacts individuals' intentions to save, which consequently forces individuals to engage in purchase-oriented information search; however, uncertainty also has a direct effect because individuals engage in ongoing information search processes to directly reduce uncertainty. The implications of these findings are discussed

Changing Perceptions and Changing Behavior in Customer Relationships

We formulate a theoretical model in which we postulate that if a customers' behavior is perceived as not optimal, customers will adjust this behavior based on their current satisfaction and payment equity. Furthermore, customers will also include new experiences. In our empirical study we particularly investigate customer referrals and the amount of services purchased. Our results show positive effects of current satisfaction and payment equity on referrals, while also changes in satisfaction and payment equity affect customer referrals. With respect to the amount of services purchased, our estimation results reveal a positive significant effect of only changes in satisfaction