Commerce schools: the pressure of internationalization



juillet 2012, n°7, pp.18-25

Départements : Comptabilité et Contrôle de Gestion

Communication, correlation and cheap-talk in games with public information

Y. Heller, E. Solan, T. TOMALA

Games and Economic Behavior

janvier 2012, vol. 74, n°1, pp.222-234

Départements : Economie et Sciences de la décision, GREGHEC (CNRS)

Mots clés : Cheap-talk, Communication equilibrium, Normal-form correlated equilibrium, Distributed computation

This paper studies extensive form games with public information where all players have the same information at each point in time. We prove that when there are at least three players, all communication equilibrium payoffs can be obtained by unmediated cheap-talk procedures. The result encompasses repeated games and stochastic games

Competition and the Cost of Debt


Journal of Financial Economics

septembre 2012, vol. 105, n°3, pp.661-682

Départements : Finance

Mots clés : Product market competition, Import tariffs, Cost of debt, Bank loans

This paper empirically shows that the cost of bank debt is systematically higher for firms that operate in competitive product markets. Using various proxies for product market competition, and reductions of import tariff rates to capture exogenous changes to a firm's competitive environment, I find that competition has a significantly positive effect on the cost of bank debt. Moreover, the analysis reveals that the effect of competition is greater in industries in which small firms face financially strong rivals, in industries with intense strategic interactions between firms, and in illiquid industries. Overall, these findings suggest that banks price financial contracts by taking into account the risk that arises from product market competition

Confidence in preferences


Social Choice and Welfare

juillet 2012, vol. 39, n°2/3, pp.273-302

Départements : Economie et Sciences de la décision, GREGHEC (CNRS)

Indeterminate preferences have long been a tricky subject for choice theory.One reason for which preferences may be less than fully determinate is the lackof confidence in one's preferences. In this paper, a representation of confidence inpreferences is proposed. It is used to develop an account of the role which confidencewhich rests on the following intuition: the more important the decision to betaken, the more confidence is required in the preferences needed to take it. An axiomatisationof this choice rule is proposed. This theory provides a natural accountof when an agent should defer a decision; namely, when the importance of the decisionexceeds his confidence in the relevant preferences. Possible applications ofthe notion of confidence in preferences to social choice are briefly explored.Keywords : Incomplete preference; Revealed preference; Confidence in preferences;Deferral of decisions; Importance of decisions; Social choice

Conspicuous Consumption versus Charitable Behavior in Response to Social Exclusion: A Differential Needs Explanation


Journal of Consumer Research

octobre 2012, vol. 39, pp.530-544

Départements : Marketing, GREGHEC (CNRS)

Social exclusion has been shown to produce a number of different responses. This research examines the proposition that social exclusion may produce either self-focused or prosocial responses, depending on which needs are threatened. Different types of social exclusion threaten different needs, which in turn produce distinct outcomes (differential needs hypothesis). Social exclusion in the form of being implicitly ignored increased conspicuous consumption, whereas being explicitly rejected increased helping and donation behavior. However, when efficacy needs (power, meaningful existence) were bolstered, the effects of being ignored were eliminated, whereas when relational needs (self-esteem) were bolstered, the effects of being rejected were eliminated. The results indicate that certain types of social exclusion produce prosocial responses, whereas others produce self-focused and attention-getting responses.

Contract Performance in Offshore Systems Development: Role of Control Mechanisms


Journal of Management Information Systems

été 2012, vol. 29, n°1, pp.115-158

Départements : Information Systems and Operations Management, GREGHEC (CNRS)

Mots clés : Contract performance, Control mechanisms, Control modes, Control theory, Interaction effects, Offshoring, Outsourcing, Project governance, Softwaredevelopment

Although control theory has often been invoked to explain the coordination between client and vendor for information systems development ISD, insights into its moderating effects for explicating ISD contract performance, especially in the offshore context, is rather limited. Such insights would enable better understanding of variables that have complementary or substitutive effects on performance. Further, the control literature talks about different control modes e.g., formal and informal control modes classified as behavior, outcome, clan, and self-control modes without adequately distinguishing among the different control mechanisms enacting each of the control modes. In this research, by explicitly classifying the distinctions that exist within each of the control modes, we uncover the key role played by mechanistic governance in outsourced ISD. Grounding our arguments in the information requirement for performance evaluation, the study theorizes the moderating influence of mechanistic governance on the relationships of contract specificity and relational governance with ISD quality and cost performance. We test the theorized model in a field study comprising 160 offshore ISD projects executed by Indian vendors. Our results establish the significant complementary role of mechanistic governance on the relationships of contract specificity with both cost and quality performance variables. Further, mechanistic governance substitutes the impact of relational governance on cost performance. Thus, the study theoretically as well as empirically establishes the need for conceptualizing mechanistic governance as a viable and significant governance mechanism for offshore ISD contracts. The study also teases out the distinctions between the two prime contract types in vogue for managing offshore ISD contracts, namely, fixed price and time and materials contracts. The study thus contributes not only to control theory but also to the stream of literature examining offshore ISD contracts. Further, the study provides insights to managers on having well-specified contracts and acknowledging the role of mechanistic governance for better performance.

Creating and Capturing Value in Public-Private Ties: A Private Actor's Perspective


Academy of Management Review

avril 2012, vol. 37, n°2, pp.272-299

Départements : Stratégie et Politique d’Entreprise, GREGHEC (CNRS)

Mots clés : Public-private interorganizational relations, Governance, Public opportunism, Social activism, Value creation, Value distribution

Intersecting the boundaries of public and private economic activity, public-private ties carry important organizational strategy, management, and policy implications. We identify the value creation and capture mechanisms embedded in these ties through a theoretical framework of two conceptual public-private structural alternatives, each associated with different value-creating capacities, rationales, and outcomes. Two important restraints on private value capture-public partner opportunism and external stakeholder activism-arise asymmetrically under each form, carrying a critical effect on partnership outcomes

Cross-Listing, Investment Sensitivity to Stock Price and the Learning Hypothesis


Review of Financial Studies

novembre 2012, vol. 25, n°11, pp.3305-3350

Départements : Finance, GREGHEC (CNRS)

accepté le 28 juin 2012Cross-listed firms in the United States have a higher investment-to-price sensitivity than do firms that never cross-list. This difference is strong, does not exist prior to the cross-listing date, and does not vanish afterward. Moreover, it does not appear to be primarily driven by improvements in governance, disclosure, and access to capital associated with a U.S. cross-listing. Instead, we argue that a cross-listing enhances managers' reliance on stock prices because it makes stock prices more informative to them. Consistent with this explanation, U.S. cross-listings that are more likely to strengthen the informativeness of stock prices for managers feature a higher investment-to-price sensitivity.

Defending the Ramsey Test: What is wrong with Preservation?



janvier 2012, vol. 121, n°481, pp.131-146

Départements : Economie et Sciences de la décision, GREGHEC (CNRS)

Mots clés : Conditionals, Revisions

In `A Defence of the Ramsey Test', Richard Bradley makes a case for not concluding from the famous impossibility results regarding the Ramsey Test ' the thesis that a rational agent believes a conditional if he would believe the consequent upon learning the anteceden ' that the thesis is false. He lays the blame instead on one of the other premisses in these results, namely the Preservation condition. In this paper, we explore how this condition can be weakened by strengthening the notion of consistency which appears in it. After considering the ffects of such weakenings for Bradley's argument, we propose a refinement of the Preservation condition which does not fall prey to Bradley's argument nor to Gärdenfors's impossibility theorem. We briefly compare it to Bradley's suggested restriction of Preservation

Degree of innovativeness and new product performance

F. Duhamel, M. SANTI

Technology Analysis and Strategic Management

mars 2012, vol. 24, n°3, pp.253-266

Départements : Stratégie et Politique d’Entreprise

Mots clés : Product innovation, Innovativeness, Commercialisation of innovation, Small and medium-sized firms

The relationship between innovativeness and innovations’ success still remains unclear. This lack of consensus stems from a confusion between customer familiarity with the innovation and synergy with the focal firm's existing set of resources and competencies, to explain performance, as well as from the use of different measurement methods. On the basis of a sample of 114 innovation projects in small and medium-sized french companies, using our own measurement method, we show a U-shaped relationship between customer familiarity and performance, and a negative relation, as expected, between newness to the company and the innovation's performance