Spurious Unanimity and the Pareto Principle


Economics and Philosophy

novembre 2016, vol. 32, n°3, pp.511-532

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

Mots clés : Pareto principle, unanimity preservation, spurious unanimity, aggregation of ex ante preferences

Taking a Second Look in a Warped Crystal Ball: Explaining the Accuracy of Revised Forecasts


Journal of Management Studies

décembre 2016, vol. 53, n°8, pp.1292-1319

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

Mots clés : Forecasting, Syndication, Value-adding commitment, Venture capital

The fundamental questions we address are whether firms with a higher initial forecasting ability are able to accurately revise the exit forecasts of their investments; and how co-investment partners and value-adding commitment with their investment influence the main effect. We explore these questions with novel and unique data collected via mixed research methods on venture capital firms’ forecasts of 114 portfolio companies. We find that venture capital firms that are better at making initial forecasts are less effective in revising their forecasts. In addition, while the number of co-investment partners positively moderate this relationship, venture capital firms’ value-adding commitment moderates it negatively. Our findings contribute to the literature on organizational forecasting as well as inter-organizational knowledge transfer and knowledge creation. They also provide novel insights into venture capital literature and practice

Task complexity and shared value orientation: exploring the moderators of a social dilemma in team social networks


Industrial and Corporate Change

octobre 2016, vol. 25, n°5, pp.739-756

Départements : Management et Ressources Humaines

Mots clés : Z13 - Economic Sociology; Economic Anthropology; Social and Economic Stratification M10 - General L14 - Transactional Relationships; Contracts and Reputation; Networks

Although it is often in the interest of individuals to implement networking strategies that erode their team’s social capital, it is unclear under what conditions such a social dilemma is more or less likely to occur. We focus on brokerage and closure as two dimensions of social structure where tension arises between individual networking strategies and team performance. Adopting a multilevel perspective, and focusing on closed teams with the presence of a clear leader, we analyze two complementary moderators of this social dilemma that are fundamental to the existence of teams: the task complexity facing the team under consideration, and the individualist versus collectivist shared value orientation of its members. We find that an increase in either of these makes the social dilemma more likely to occur. Counterintuitive conclusions pertaining to these moderators are discussed

Tastlé-Nestlé, Toogle-Google: The effects of similarity to familiar brand names in brand name innovation


Journal of Business Research

mars 2016, vol. 69, n°3, pp.1182–1189

Départements : Marketing, GREGHEC (CNRS)

Mots clés : Brand name, Branding, Brand attitudes, Similarity, Familiarity, Innovation

When developing new brand names, marketers face the dilemma of how similar their new brand name is or should be to familiar brand names in the market. The current research tests the complete range of conditions exploring how the degree of similarity of a new brand name to an existing one may affect attitudes toward the new brand name. The authors first replicate an inverted-U pattern suggested by congruency theories. However, this result holds only in the case of positive pre-existing attitudes toward familiar brand names. Additional tests demonstrate a U-shaped pattern in the case of negative attitudes toward familiar brand names, and a linear relation between similarity and attitudes in the case of no pre-existing attitudes toward familiar brand names. A field study replicates these findings, testing actual choice of products that bear different levels of resemblance to real positive and negative brand names (Oreo and Spam).

Teen attitudes toward luxury fashion brands from a social identity perspective: A cross-cultural study of French and U.S. teenagers


Journal of Business Research

décembre 2016, vol. 69, n°12, pp.5785-5792

Départements : Marketing, GREGHEC (CNRS)

Mots clés : Adolescence, Luxury retailing, Cross-cultural consumer behavior, Fashion innovativeness, Need for uniqueness, Susceptibility to peer influence

The global teen market has significant spending power and is an important factor in the world economy. However, little is known about the social motivations underlying attitudes toward luxury fashion brands during adolescence. This research investigates the social mechanisms underlying teenage attitudes toward luxury fashion brands in a cross-cultural context. In a study of 570 French and American adolescents, this research shows that both need for uniqueness and susceptibility to influence relate positively to attitudes toward luxury brands, and that fashion innovativeness mediates these relations. This research also shows that culture moderates these relations. Specifically, the mediated relations between need for uniqueness and luxury brand attitudes are stronger for American adolescents than for French adolescents. In contrast, the mediated relations between susceptibility to influence and luxury brand attitudes are stronger for French adolescents than for American adolescents. The results have implications for strategies luxury retailers develop for appealing to adolescents in different cultures

The Annuity Puzzle Remains a Puzzle


Journal of Economic Dynamics and Control

septembre 2016, vol. 70, pp.18-35

Départements : Finance, GREGHEC (CNRS)

Mots clés : Asset allocation; Life-cycle portfolio choice; Annuity; Savings

We examine incomplete annuity menus, background risk, bequest motives, and default risk as possible drivers of divergence from full annuitization. Contrary to what is often suggested in the literature, we find that full annuitization remains optimal if saving is possible after retirement. This holds irrespective of whether real or only nominal annuities are available. Whenever liquidity is desired, individuals save sizeable amounts out of their annuity income to smooth consumption shocks. Similarly, adding equity-linked annuities to the menu does not increase welfare significantly, since individuals can invest in stocks in order to get the desired equity exposure

The Effect of Electronic Word of Mouth on Sales: A Meta-Analytic Review of Platform, Product, and Metric Factors


Journal of Marketing Research

juin 2016, vol. 53, n°3, pp.297-318

Départements : Marketing, GREGHEC (CNRS)

Mots clés : Electronic word of mouth, Online platforms, Social media, eWOM metrics, Meta-analysis

The increasing amount of electronic word of mouth (eWOM) has significantly affected the way consumers make purchase decisions. Empirical studies have established an effect of eWOM on sales but disagree on which online platforms, products, and eWOM metrics moderate this effect. The authors conduct a meta-analysis of 1,532 effect sizes across 96 studies covering 40 platforms and 26 product categories. On average, eWOM is positively correlated with sales (.091), but its effectiveness differs across platform, product, and metric factors. For example, the effectiveness of eWOM on social media platforms is stronger when eWOM receivers can assess their own similarity to eWOM senders, whereas these homophily details do not influence the effectiveness of eWOM for e-commerce platforms. In addition, whereas eWOM has a stronger effect on sales for tangible goods new to the market, the product life cycle does not moderate the eWOM effectiveness for services. With respect to the eWOM metrics, eWOM volume has a stronger impact on sales than eWOM valence. In addition, negative eWOM does not always jeopardize sales, but high variability does

The Effect of IAS/IFRS Adoption on Earnings Management (Smoothing): A Closer Look at Competing Explanations


Journal of Accounting and Public Policy

juillet-août 2016, vol. 35, n°4, pp.352–394

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

Mots clés : IFRS, Earnings management, Smoothing

Prior research provides mixed evidence on whether the transition to IAS/IFRS deters or contributes to greater earnings management (smoothing). The dominant explanation for the conflicting results is self-selection. Early voluntary adopters had incentives to increase the transparency of their reporting in order to attract outside capital, while those firms that waited until IFRS adoption became mandatory in EU countries lacked incentives for transparent reporting leading to increases in earnings management (smoothing) after IFRS adoption. We maintain that the IFRS standards that went into effect in 2005 provide greater flexibility of accounting choices because of vague criteria, overt and covert options, and subjective estimates. This greater flexibility coupled with the lack of clear guidance on how to implement these new standards has led to greater earnings management (smoothing). Consistent with this view, we find an increase in earnings management (smoothing) from pre-2005 to post-2005 for firms in countries that allowed early IAS/IFRS adoption, as well as for firms in countries that did not allow early IFRS adoption. We find no evidence of changes in incentives that can explain these results.

The European Audiovisual Industry and the Digital Single Market: Trends, Issues and Policies


DigiWorld Economic Journal (formerly Communications et Strategies), IDATE

mars 2016, n°101, pp.17-40

Départements : GREGHEC (CNRS)

Mots clés : audiovisual regulatory framework, Digital Single Market, audiovisual industry, Europe, convergence, OTT

New players emerge in the audiovisual industry and offer unprecedented solutions for aggregating and distributing content. New entrants, especially social networks, have been the engines of these changes toward multitasking, multi-screening behaviours. The way of accessing and interacting with content has changed. Over the last three decades, the European Commission has been watching carefully the evolution of the media and content industries with the goal to foster growth and innovation of digital content services in the European Union, while at the same time protecting consumers in a harmonised fashion.The paper contrasts the global trends of the market, the features of the dual EU audiovisual markets with some of the recent proposals of the European Commission in the backdrop of its numerous initiatives of the last decades

The excess returns of "quality" stocks: a behavioral anomaly


Journal of Investment Strategies

juin 2016, vol. 5, n°3, pp.51-61

Départements : Finance, GREGHEC (CNRS)

This paper investigates the causes of the quality anomaly, which is one of the strongest and most scalable anomalies in equity markets.We explore two potential explanations. The "risk view", whereby investing in high-quality firms is somehow riskier, so that the higher returns of a quality portfolio are a compensation for risk exposure, is consistent with the efficient market hypothesis. The "behavioral view" states that some investors persistently underestimate the true value of high-quality firms. We find no evidence in favor of the "risk view": the returns from investing in quality firms are abnormally high on a risk-adjusted basis, and are not prone to crashes.We provide novel evidence in favor of the "behavioral view": in their forecasts of future prices, and while being overall over-optimistic, analysts systematically underestimate the future returns of high-quality firms compared with those of low-quality firms