Dynamic adaptation of supply chain collaboration to enhance demand controllability


International Journal of Manufacturing Technology and Management

2015, vol. 29, n°3/4, pp.139-160

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

Mots clés : supply chain collaboration, supply chain strategy, demand uncertainty, supply chain management, SCM, collaborative supply chains, Japan, France, digital cameras, manufacturer¿retailer collaboration, adaptive collaboration, product life cycle, retail partners, product strategy, supply chain performance

In industries characterised by strong uncertainties on demand, supply chain collaboration has been considered an important factor to improve performance, but remains difficult to implement. Drawing on a comparative case study of the relationships between a Japanese manufacturer and three French retailers in the digital still camera industry, we delineate a series of contingent factors that determine the conditions under which supply chain collaboration with retailers can be effective. We propose the concept of adaptive collaboration, contingent on the product life cycle and retail partners' attributes, to determine the fit between product strategy and supply chain processes. We show how it can help solve some of the issues associated with the development of collaboration and help improve a company's supply chain performance

Dynamics of Innovation and Risk


Review of Financial Studies

mai 2015, vol. 28, n°5, pp.1353-1380

Départements : Finance

We study the dynamics of an innovative industry in which agents learn about the likelihood of negative shocks. Managers can exert risk prevention effort to mitigate the consequences of shocks. If no shock occurs, confidence improves, attracting managers to the innovative sector. But, when confidence becomes high, inefficient managers exerting low riskprevention effort also enter. This stimulates growth, while reducing risk prevention. The longer the boom, the larger the losses if a shock occurs. Although these dynamics arise in the first-best, asymmetric information generates excessive entry of inefficient managers, earning informational rents, inflating the innovative sector, and increasing its vulnerability

Effect of Impairment-Testing Disclosures on the Cost of Equity Capital


Journal of Business Finance & Accounting

2015, vol. 42, n°5-6, pp.583-618

Départements : Comptabilité et Contrôle de Gestion, GREGHEC (CNRS)

Mots clés : impairment test, cost of capital, information risk, disclosures, IAS 36

Information risk – the uncertainty regarding the parameters of the distribution offirms’ future cash flows – generates valuation errors and is costly to investors who require a higher return to compensate for greater information risk. We argue that, on average, through their impairment-testing disclosures, managers convey information that reduces information risk. Using disclosures from firms included in the SBF 250 index of Euronext Paris over the period 2006–2009, we document a negative association between impairment-testing disclosures and implied cost of equity capital. We find that prospective entity-specific impairment-testing disclosures are negatively associated with cost of capital whereas descriptive disclosures exhibit no association with cost of capital. Additionally, we document that firms which avoid booking impairments when low performance indicators suggest a greater likelihood of impairments exhibit no association between impairment-testing disclosures and cost of capital. This suggests that those firms’ disclosures are perceived as less accurate by investors. We also find that prospective impairment-testing disclosures are negatively related to analysts’ forecast errors. Our study adds to the literature on the economic consequences of financial reporting and sheds light on the consequences of one accounting mechanism, namely impairment-testing disclosures, ensuring conservatism of financial reporting

Effect of Media Usage Selection on Social Mobilization Speed: Facebook vs E-Mail


PLoS One

2015, vol. 10, n°9

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

Social mobilization is a process that enlists a large number of people to achieve a goal within a limited time, especially through the use of social media. There is increasing interest in understanding the factors that affect the speed of social mobilization. Based on the Langley Knights competition data set, we analyzed the differences in mobilization speed between users of Facebook and e-mail. We include other factors that may influence mobilization speed (gender, age, timing, and homophily of information source) in our model as control variables in order to isolate the effect of such factors. We show that, in this experiment, although more people used e-mail to recruit, the mobilization speed of Facebook users was faster than that of those that used e-mail. We were also able to measure and show that the mobilization speed for Facebook users was on average seven times faster compared to e-mail before controlling for other factors. After controlling for other factors, we show that Facebook users were 1.84 times more likely to register compared to e-mail users in the next period if they have not done so at any point in time. This finding could provide useful insights for future social mobilization efforts.

Effects of the Open Method of Coordination (OMC) in Research and Innovation: Indirect Legislation in EU Policy-Making?


Journal of Legal Pluralism and Unofficial Law

2015, vol. 47, n°1, pp.22-38

Départements : Droit et fiscalité, GREGHEC (CNRS)

Mots clés : legal philosophy, European union, Jeremy Bentham, indirect legislation, pragmatic approach, research and innovation

This study offers new insights on the open method of coordination (OMC) of the European Union (EU) by focusing on the effects of this new method for producing EU regulation. The starting points here are that the OMC is not a radically new method of governance, and that it must be seen as an application of the theory of indirect legislation – as developed by Bentham. With the concept of indirect legislation, Bentham thinks a system of governing individuals that does not rest only on the fear of legal punishment, but is backed by the prospect of rewards and the fear of public censure. For the purpose of the comparison between the OMC and indirect legislation, the latter is considered as a system of social control, which – whether it be categorised as legal or not – is first and foremost normative and has effects, i.e. is applied, followed and enforced in a given community without resorting to the binding force of the law. Thanks to the input of indirect legislation, this study aims to understand what have been the real effects of the OMC and more particularly of the OMC applied to the research and innovation policy in Belgium

Equilibrium fast trading


Journal of Financial Economics

mai 2015, vol. 116, n°2, pp.292-313

Départements : Finance, GREGHEC (CNRS)

Mots clés : High frequency trading, Liquidity welfare, Adverse selection, Investment

High-speed market connections improve investors' ability to search for attractive quotes in fragmented markets, raising gains from trade. They also enable fast traders to observe market information before slow traders, generating adverse selection, and thus negative externalities. When investing in fast trading technologies, institutions do not internalize these externalities. Accordingly, they overinvest in equilibrium. Completely banning fast trading is dominated by offering two types of markets: one accepting fast traders, the other banning them. However, utilitarian welfare is maximized by having i) a single market type on which fast and slow traders coexist and ii) Pigovian taxes on investment in the fast trading technology

Equipes commerciales: combien faut-il payer les stars?


Harvard Business Review

26 Octobre 2015, vol.

Départements : Marketing, GREGHEC (CNRS)

Estimating ambiguity preferences and perceptions in multiple prior models: Evidence from the field


Journal of Risk and Uncertainty

16 décembre 2015, vol. 51, n°3, pp.219-244

Départements : Finance, GREGHEC (CNRS)

Mots clés : Ambiguity. Decision-making under uncertainty. Multiple prior models. Alpha-MaxMin model

We develop a tractable method to estimate multiple prior models of decisionmakingunder ambiguity. In a representative sample of the U.S. population, we measureambiguity attitudes in the gain and loss domains. We find that ambiguity aversion iscommon for uncertain events of moderate to high likelihood involving gains, butambiguity seeking prevails for low likelihoods and for losses. We show that choicesmade under ambiguity in the gain domain are best explained by the a-MaxMin model,with one parameter measuring ambiguity aversion (ambiguity preferences) and asecond parameter quantifying the perceived degree of ambiguity (perceptions aboutambiguity). The ambiguity aversion parameter a is constant and prior probability setsare asymmetric for low and high likelihood events. The data reject several othermodels, such as MaxMin and MaxMax, as well as symmetric probability intervals.Ambiguity aversion and the perceived degree of ambiguity are both higher for men andfor the college-educated. Ambiguity aversion (but not perceived ambiguity) is alsopositively related to risk aversion. In the loss domain, we find evidence of reflection,implying that ambiguity aversion for gains tends to reverse into ambiguity seeking forlosses. Our model’s estimates for preferences and perceptions about ambiguity can beused to analyze the economic and financial implications of such preferences

Evidence Doesn't Argue for Itself: The Value of Disinterested Dialogue in Strategic Decision-Making


Long Range Planning

décembre 2015, vol. 48, n°6, pp.361-380

Départements : Stratégie et Politique d’Entreprise

Mots clés : Analysis, Behavioral strategy, Disinterested dialogue, Evidence-based management, Strategic decision making

Previous studies of strategic decision-making have demonstrated a relationship between the strategic decision-making process and its effectiveness, namely whether the decision delivers the expected results. In this article, we demonstrate that there are two key dimensions of strategic decision-making: 1) the analysis performed, and particularly financial aspects of a decision; and 2) strategic conversations about the decision at hand, or the “disinterested dialogue” about the decision, as we refer to it. Whereas, it is well-accepted that a robust analysis is important for effective decisions, we argue that disinterested dialogue is also a necessary construct in explaining the effectiveness of strategic decisions. To test this hypothesis, we undertook a study of 634 strategic decisions made by executives across multiple industries and regions. The results confirmed that both a robust analysis and disinterested dialogue have a significant positive relationship with decision-making effectiveness. However, disinterested dialogue has a significantly greater impact on the effectiveness of strategic decisions than robustness of analysis. We discuss the impact of our results for theory and practice.

Experiments on compound risk in relation to simple risk and to ambiguity


Management Science

juin 2015, vol. 61, n°6, pp.1306-1322

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

Mots clés : Ambiguity, Ellsberg paradox, Reduction of compound lotteries

We conduct experiments measuring individual behavior under compound risk, simple risk, and ambiguity. We focus on (1) treatment of compound risks relative to simple risks and (2) the relationship between compound risk attitudes and ambiguity attitudes. We find that compound risks are valued differently than corresponding reduced simple risks. These differences measure compound risk attitudes. These attitudes display more aversion as the reduced probability of the winning event increases. Like Halevy [Halevy Y (2007) Ellsberg revisited: An experimental study. Econometrica 75:503–536], we find an association between compound risk reduction and ambiguity neutrality. However, in contrast to the almost perfect identification in Halevy’s data, we find a substantially weaker relation in both directions. First, a majority of our ambiguity-neutral subjects fail toreduce compound risk. Second, almost a quarter of our subjects who reduce compound risk are nonneutral to ambiguity. All of the latter come from the more quantitatively sophisticated part of our subject pool