Paul B. Ellickson, Pianpian Kong, Mitchell J. Lovett
{"title":"Private Labels and Retailer Profitability: Bilateral Bargaining in the Grocery Channel","authors":"Paul B. Ellickson, Pianpian Kong, Mitchell J. Lovett","doi":"10.2139/ssrn.3045372","DOIUrl":"https://doi.org/10.2139/ssrn.3045372","url":null,"abstract":"We examine the role of store branded \"private label\" products in determining bargaining outcomes between retailers and manufacturers in the single-serve brew-at-home coffee category. Exploiting a novel setting in which the dominant, single-serve technology was protected by a patent that prevented private label entry, we develop a structural model of demand and supply-side bargaining and seek to quantify the impact of private labels on retailer profits. To quantify the benefits of private label introduction, we decompose their impact into the direct profits (from adding an additional product) and the bargaining benefit on branded products (from increasing retailer's bargaining leverage), netting out the business stealing effects on incumbent branded products. We find that bargaining outcomes are driven primarily by bargaining leverage, while bargaining ability is relatively symmetric between retailer and manufacturer. Moreover, the impact of bargaining leverage is substantial: increased bargaining leverage accounts for roughly 20% of the overall benefit of private label introduction, which is itself on the order of 10% of pre-introduction profits. Finally, we find that private labels are beneficial to all retailers, but some retailers gain much more than others.","PeriodicalId":222025,"journal":{"name":"Simon Business School Working Papers","volume":"85 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2018-08-07","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"133513600","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
C. Armstrong, Jacky Chau, C. Ittner, Jason J. Xiao
{"title":"Earnings per Share Goals and CEO Incentives","authors":"C. Armstrong, Jacky Chau, C. Ittner, Jason J. Xiao","doi":"10.2139/ssrn.2919478","DOIUrl":"https://doi.org/10.2139/ssrn.2919478","url":null,"abstract":"We examine differences in CEO achievement of EPS goals set separately through analyst forecasts and firm bonus plans. Having different goals for the same performance metric enables us to assess their relative importance in incentivizing CEOs. We find CEOs frequently achieve analyst forecasts, but rarely achieve bonus goals exceeding the forecast. Despite lower compensation risk accompanying easier goals, we also find that bonus goals set below forecasts are associated with greater pay, suggesting the use of easier goals to compensate CEOs while maintaining the appearance of pay-for-performance. The results highlight the importance of considering both sets of performance goals simultaneously when evaluating their incentive effects.","PeriodicalId":222025,"journal":{"name":"Simon Business School Working Papers","volume":"36 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2017-02-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"128787130","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"Generalized Insurer Bargaining","authors":"Guy Arie, P. Grieco, Shiran Rachmilevitch","doi":"10.2139/ssrn.2677394","DOIUrl":"https://doi.org/10.2139/ssrn.2677394","url":null,"abstract":"We incorporate repeated interaction and limits on the number of simultaneous negotiations by the same insurer into the standard multi-lateral insurer-hospital Nash-In-Nash (NiN) bargaining model. This approach is motivated by our finding that under common assumptions, the NiN model predicts a market breakdown with sufficiently high hospital bargaining power. In our proposed model all hospitals that increase surplus join the insurer network. Our generalized model can be estimated as in Gowrisankaran et al. (2015) with one additional parameter -- the players' discount factor. If players are completely impatient, the estimation outcome is the same in both models. We identify the differences in estimation results between the two models and show that mergers that would be approved using the NiN model may be rejected using the general model.","PeriodicalId":222025,"journal":{"name":"Simon Business School Working Papers","volume":"23 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2016-11-10","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"127865785","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"Global Expertise of Financial Analysts","authors":"G. Ma, S. Markov, Joanna S. Wu","doi":"10.2139/ssrn.2830333","DOIUrl":"https://doi.org/10.2139/ssrn.2830333","url":null,"abstract":"We describe the challenges of forecasting earnings in a globally interconnected marketplace, and we document inefficient use of information regarding foreign country exposures and expected country GDP growth at the consensus and individual forecast levels. A country’s proximity to the US, importance to the firm, and visibility, as well as availability of more precise information about foreign country exposures, contribute to consensus forecast efficiency. We identify a dimension of individual analyst global expertise — similarity in exposure between the firm and the rest of the firms in the analyst portfolio — and show that it contributes to forecast efficiency, accuracy, and informativeness and that it helps the analyst achieve the coveted all-star rank, suggesting that globalization not only poses a challenge but also creates an opportunity for research providers and analysts to distinguish themselves.","PeriodicalId":222025,"journal":{"name":"Simon Business School Working Papers","volume":"19 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2016-10-31","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"122394714","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"Does Technology Substitute for Nurses? Staffing Decisions in Nursing Homes","authors":"S. F. Lu, Huaxia Rui, A. Seidmann","doi":"10.1287/mnsc.2016.2695","DOIUrl":"https://doi.org/10.1287/mnsc.2016.2695","url":null,"abstract":"Over the past 10 years, many healthcare organizations have made significant investments in automating their clinical operations, mostly through the introduction of advanced information systems. Yet the impact of these investments on staffing is still not well understood. In this paper, we study the effect of information technology (IT)-enabled automation on staffing decisions in healthcare facilities. Using unique nursing home IT data from 2006 to 2012, we find that the licensed nurse staffing level decreases by 5.8% in high-end nursing homes but increases by 7.6% in low-end homes after the adoption of automation technology. Our research explains this by analyzing the interplay of two competing effects of automation: the substitution of technology for labor and the leveraging of complementarity between technology and labor. We also find that increased automation improves the ratings on clinical quality by 6.9% and decreases admissions of less profitable residents by 14.7% on average. These observations ar...","PeriodicalId":222025,"journal":{"name":"Simon Business School Working Papers","volume":"36 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2016-09-12","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"123200755","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"Measuring Competition in Spatial Retail","authors":"Paul B. Ellickson, P. Grieco, Oleksii Khvastunov","doi":"10.2139/ssrn.2819621","DOIUrl":"https://doi.org/10.2139/ssrn.2819621","url":null,"abstract":"We propose a framework for analyzing spatial competition between retailers of different formats. Our approach yields localized measures of concentration and store-level diversion ratios that can be used to prospectively evaluate mergers in highly differentiated retail markets. Our method does not require the analyst to define markets ex ante, collect prices or construct ad hoc price indices. Using data from the supermarket industry, we evaluate two representative mergers. Contrary to conventional wisdom, we find substantial cross-format competition between supercenters, club stores, and traditional grocers. Our analysis cautions against ignoring the impact of new formats when evaluating mergers between traditional grocers.","PeriodicalId":222025,"journal":{"name":"Simon Business School Working Papers","volume":"1 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2016-07-30","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"130431566","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"Cyclic Variables and Infinite Horizon Structural Dynamic Models","authors":"Avery M. Haviv","doi":"10.2139/ssrn.2610940","DOIUrl":"https://doi.org/10.2139/ssrn.2610940","url":null,"abstract":"In this paper, I develop Cyclic Value Function Iteration (CVFI), which is an adjustment to the value function iteration. When using this algorithm, the inclusion of cyclic variables of any size into the state space of an infinite horizon dynamic structural model does not increase the computational complexity of solving for the value function. This result is proven theoretically, and shown to closely hold in practice using Monte Carlo simulations.","PeriodicalId":222025,"journal":{"name":"Simon Business School Working Papers","volume":"8 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2016-03-08","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"132318405","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"Cost Per Incremental Action: Efficient Pricing of Advertising","authors":"Garrett A. Johnson, Randall A. Lewis","doi":"10.2139/ssrn.2668315","DOIUrl":"https://doi.org/10.2139/ssrn.2668315","url":null,"abstract":"Advertisers seek to maximize profits by investing in advertising. We propose a “cost-per-incremental-action” (CPIA) pricing model which incorporates the causal contribution of advertising in order to achieve the advertisers' objectives such as profit maximization. CPIA pricing aligns marketplace incentives among all participants to help advertisers achieve their objectives via ad effectiveness and, by doing so, eliminates the adverse behaviors resulting from the misaligned incentives of commonly used pricing models. CPIA pricing can be implemented by adapting cost-per-action (CPA) bidding by either the ad platform or advertiser's bidding agent. We discuss CPIA pricing in the context of several examples, including recent empirical studies measuring the causal effects of advertising within the context of existing pricing models.","PeriodicalId":222025,"journal":{"name":"Simon Business School Working Papers","volume":"34 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2015-10-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"117112982","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"Cost Management for IT Activities: A Case Study in the IT Division of a French Bank Using Activity-Based Costing","authors":"Grégory Wegmann","doi":"10.2139/ssrn.2374972","DOIUrl":"https://doi.org/10.2139/ssrn.2374972","url":null,"abstract":"The costs of information technology (IT) activities have been increasing rapidly these recent years, due to the technological sophistication and more market-oriented strategies that complexify the value chains of the firms. Many of these expenses do not relate to individual products but are associated to customers, market segments and distribution channels. In this context, the companies try to understand the cost of selling their products and services. This is the reason why customer-driven and market-oriented cost management approaches have gained in popularity.In this paper, we review in a first part the strategic cost management stream and the way we can give a customer orientation to cost management processes, based on the Activity-based costing (ABC) method. In a second part we present a case study that takes place in the IT division of a French Bank that has developed an ABC method since several years. We describe how the ABC model has evolved toward a process that enables to compare the performances of different customers. With this case study, we will conclude about the new forms of management controls and controllers that emerge.","PeriodicalId":222025,"journal":{"name":"Simon Business School Working Papers","volume":"9 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2013-11-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"126889416","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"'Whom Do You Trust?' Investor-Advisor Relationships and Mutual Fund Flows","authors":"Leonard Kostovetsky","doi":"10.2139/SSRN.2388955","DOIUrl":"https://doi.org/10.2139/SSRN.2388955","url":null,"abstract":"I provide a measure for the value that investors place on trust and relationships in asset management by examining mutual fund flows around announced changes in the ownership of fund management companies. I find a decline in flows of around 7% of fund assets in the year following the announcement date, resulting primarily from fund outflows. Retail investors and investors in funds with higher expense ratios are most responsive to ownership changes, providing evidence that such investors appear to place a significant value on trust and are more likely to respond to a relationship disruption by withdrawing their assets. Received September 13, 2013; accepted August 10, 2015 by Editor Laura Starks.","PeriodicalId":222025,"journal":{"name":"Simon Business School Working Papers","volume":"24 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2013-03-31","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"126033477","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}