Publication records

We show that a monopolist's problem of optimal advance selling strategy can be mathematically transformed into a problem of optimal bundling strategy if four conditions hold: i. consumers and the firm agree on the probability of the states occurring, ii. the firm pre-commits to the spot prices to be charged in the advance selling stage, iii. consumers are risk-neutral, and iv. consumers and the firm do not have time preferences or when they do have time preferences, they discount future at the same rate. The result allows both researchers and practitioners to apply the insights from the well-developed vast literature on bundling to advance selling problems. In particular, we show that advance selling is more profitable than spot selling when consumer valuations across the states are independent or negatively dependent or positively dependent up to a point. We furthermore illustrate the effect of advance selling on the spot prices and consumer welfare: When the firm offers advance selling discounts, it sets higher spot prices, so consumers who do not buy in advance are worse off due to the firm offering advance selling discounts. We extend our analysis to the cases of more than two states and competition only in one of the states. We also show how advance selling can be used as an entry deterrence strategy.

 

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This article assesses the relevance of efficiencies and other justifications in recent Article 102 TFEU cases. Based on a review of all EU decisions and openings between 2009 and mid 2013 we find that procompetitive justifications still play a mediocre role in the EU Commission’s evaluations, except in IT related abuse cases. This stands in contrast to the policy goals expressed during the reform phase (2005 to 2009), the Guidance Paper and the increasing relevance of efficiency considerations in merger proceedings. We argue that this is due to a malfunctioning of the balancing test, i.e., the weighting of pro- and anticompetitive effects, as pro- and anticompetitive effects are often non-separable and non-monotone in Article 102 TFEU cases. In addition, the increasing practice of commitment decisions reduces transparency; little guidance regarding dynamic efficiencies further diminishes the relevance of business justifications in Article 102 TFEU cases. Policy options are discussed.

 

View all ESMT Working Papers in the ESMT Working Paper Series here. ESMT Working Papers are also available via SSRN, RePEc, EconStor, and the German National Library (DNB).

The literature on organizational learning asserts that external learning is often limited geographically and technologically. We scrutinize to what extent organizations acquire external knowledge by accessing external knowledge repositories. We argue that professional service firms (PSFs) grant access to non-localized knowledge repositories and thereby not only facilitate external learning but also help to overcome localization. Focusing on patent law firms, we test our predictions using a unique dataset of 544,820 pairs of EP patent applications. Analyzing patterns of knowledge flows captured in patent citations we find that accessing a PSF’s repository facilitates the acquisition of external knowledge. As the effect is more pronounced for knowledge that is distant to a focal organization we conclude that having access to a knowledge repository compensates for localization disadvantages.

 

View all ESMT Working Papers in the ESMT Working Paper Series here. ESMT Working Papers are also available via SSRN, RePEc, EconStor, and the German National Library (DNB).

This paper examines how employees react to their organizations’ corporate social responsibility (CSR). Drawing upon research in internal marketing and psychological contract theory, we conceptualize that employees have multi-faceted job needs (i.e., economic, developmental, and ideological needs) and that CSR programs constitute an important means to fulfill these needs. Based on cluster analysis, we identify three employee segments, Idealists, Enthusiasts, and Indifferents, who vary in their multi-faceted job needs and, consequently, their demand for organizational CSR. We further find that an organization’s CSR programs generates favorable employee related outcomes, such as job satisfaction and reduction in turnover intention, partially by fulfilling employees’ ideological and developmental job needs. Finally, we find that CSR proximity strengthens the positive impact of CSR on employee-related outcomes. This research reveals significant employee heterogeneity in their demand for organizational CSR and sheds light on the underlying mechanisms linking CSR to employee-related outcomes. We end with a discussion about the theoretical and practical implications of our research.

 

View all ESMT Working Papers in the ESMT Working Paper Series here. ESMT Working Papers are also available via SSRN, RePEc, EconStor, and the German National Library (DNB).

A study involving a Global 500 company finds that frontline employees’ perceptions of corporate social responsibility (CSR) can contribute to their customer orientation (self-rated) and objective job performance (supervisor-rated) by activating social identification processes. Employees identify with the organization based in part on the extent to which CSR is supported by salient and job-relevant others both internal and external to the organization. Looking internally, employees identify with the organization to the extent that they perceive management to support CSR. Looking externally, employees can identify with customers (called employee-customer identification) to the extent they perceive customers to support the company’s CSR. Both effects are enhanced when employees feel CSR is an important (versus non-important) part of their self-concept. Organizational identification directly drives job performance while employee-customer identification contributes to job performance through its effects on organizational identification and customer orientation.

 

View all ESMT Working Papers in the ESMT Working Paper Series here. ESMT Working Papers are also available via SSRN, RePEc, EconStor, and the German National Library (DNB).

At times, consumers are motivated to reduce the influence of a product recommendation on their judgments. Based on previous research, it is unclear whether this correction process will increase or decrease consumers’ confidence in their judgments. We find that source credibility moderates the effect of correction on confidence: correction decreases confidence when a product recommendation comes from a high credibility source but increases confidence when the same message comes from a low credibility source. As a result, correction increases the effectiveness of recommendations from low credibility sources on purchase intentions. Notably, this “confidence via correction” effect is further moderated by elaboration, such that the effect is attenuated for high elaboration consumers. Our results have implications for understanding consumers’ reactions to persuasive messages and for both marketing practitioners and consumer protection agencies using correction cues to influence message persuasiveness.

 

View all ESMT Working Papers in the ESMT Working Paper Series here. ESMT Working Papers are also available via SSRN, RePEc, EconStor, and the German National Library (DNB).

We show that prices and incentives recommended by the salesforce literature when targeting a profitable segment can attract unprofitable customers, particularly when salespeople have high productivity and low risk (i.e., risk aversion times uncertainty). Therefore, when customers are unidentifiable, unprofitable customers may also enter the market creating an adverse selection problem for the salespeople. By solving the moral hazard and adverse selection problems simultaneously, we show that firms can prevent the entry of unprofitable customers by “screening”. Although, screening generally requires a higher price to dissuade unprofitable customers, when firms hire salespeople, however, it requires lowering of both selling effort and the price. It also leads to a “sales trap” restricting the sales to the profitable segment to a fixed level. Screening, therefore, lowers firm profits obtained from the profitable customers. When salespeople are highly productive and risk tolerant, this drop in profit can be so high that “accommodating” unprofitable customers becomes the preferred strategy. Furthermore, the adverse selection problem intensifies and accommodation becomes more preferable when there is no moral hazard between firm and the salesperson. Behavior of unprofitable customers, therefore, must be an important consideration when targeting high-value customers and designing salesforce compensation.

 

View all ESMT Working Papers in the ESMT Working Paper Series here. ESMT Working Papers are also available via SSRN, RePEc, EconStor, and the German National Library (DNB).

The social dilemma may contain, within the individual, a self-control conflict between urges to act selfishly and better judgment to cooperate. Examining the argument from the perspective of temptation, we pair the public good game with treatments that vary the degree to which money is abstract (merely numbers on-screen) or tangible (tokens or cash). We also include psychometric measures of self-control and impulsivity. Consistent with our hypothesis, we find in the treatments that render money more tangible a stronger positive association between cooperation and self-control—and a stronger negative association between cooperation and impulsivity. Our results shed light on the conditions under which self-control matters for cooperation.

 

View all ESMT Working Papers in the ESMT Working Paper Series here. ESMT Working Papers are also available via SSRN, RePEc, EconStor, and the German National Library (DNB).

We develop a model that relates self-control and conflict identification to cooperation patterns in social dilemmas. As predicted, we find in a laboratory public goods experiment a robust association between stronger self-control and higher levels of cooperation. This means that there is evidence for an impulse to be selfish and that cooperative behavior requires self-control effort. Free-riders differ from other contributor types only in their tendency not to have identified a self-control conflict in the first place.

 

View all ESMT Working Papers in the ESMT Working Paper Series here. ESMT Working Papers are also available via SSRN, RePEc, EconStor, and the German National Library (DNB).

Post-grant validity challenges at patent offices rely on the private initiative of third parties to correct mistakes made by patent offices. We hypothesize that incentives to bring post-grant validity challenges are reduced when many firms benefit from revocation of a patent and when firms are caught up in patent thickets. Using data on opposition against patents at the European Patent Office we show that opposition decreases in fields in which many others profit from patent revocations. Moreover, in fields with a large number of mutually blocking patents the incidence of opposition is sharply reduced, particularly among large firms and firms that are caught up directly in patent thickets. These findings indicate that post-grant patent review may not constitute an effective correction device for erroneous patent grants in technologies affected by either patent thickets or highly dispersed patent ownership.