Research Outputs
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Publication Open Access A longitudinal analysis of customer satisfaction and share of wallet: investigating the moderating effect of customer characteristics(American Marketing Association (AMA), 2007) Cooil, B.; Keiningham, T. L.; Hsu, M.; Department of Business Administration; Aksoy, Lerzan; Faculty Member; Department of Business Administration; College of Administrative Sciences and EconomicsCustomer loyalty is an important strategic objective for all managers. Research has investigated the relationship between custom̀er satisfaction and loyalty in various contexts. However, these predominantly cross-sectional studies have focused on customer retention as the primary measure of loyalty. There has been little investigation into the impact on share of wallet. Using data from the Canadian banking industry, this research aims to (1) provide the first longitudinal examination of the impact of changes in customer satisfaction on changes in share of wallet and (2) determine the moderating effects of customer age, income, education, expertise, and length of relationship. Data from 4319 households using 12,249 observations over a five-year period indicate a positive relationship between changes in satisfaction and share of wallet. In particular, the initial satisfaction level and the conditional percentile of change in satisfaction significantly correspond to changes in share of wallet. Two variables, income and length of the relationship, negatively moderate this relationship. Other demographic and situational characteristics have no impact.Publication Open Access A longitudinal examination of net promoter and firm revenue growth(American Marketing Association (AMA), 2007) Keiningham, Timothy L.; Cooil, Bruce; Andreassen, Tor Wallin; Department of Business Administration; Aksoy, Lerzan; Faculty Member; Department of Business Administration; College of Administrative Sciences and EconomicsManagers have widely embraced and adopted the Net Promoter metric, which noted loyalty consultant Frederick Reichheld advocates as the single most reliable indicator of firm growth compared with other loyalty metrics, such as customer satisfaction and retention. Recently, however, there has been considerable debate about whether this metric is truly superior. This article (1) employs longitudinal data from 21 firms and 15,500-plus interviews from the Norwegian Customer Satisfaction Barometer to replicate the analyses used in Net Promoter research and (2) compares Reichheld and colleagues' findings with the American Customer Satisfaction Index. Using industries Reichheld cites as exemplars of Net Promoter, the research fails to replicate his assertions regarding the "clear superiority" of Net Promoter compared with other measures in those industries.Publication Open Access A transaction utility approach for bidding in second-price auctions(Elsevier, 2020) Akçay, Yalçın; Department of Business Administration; Sayman, Serdar; Faculty Member; Department of Business Administration; College of Administrative Sciences and Economics; 112222In both the Vickrey and eBay auctions, bidding the reservation price is the optimal strategy within the conventional utility framework. However, in practice, buyers tend to bid less than their reservation prices, and bid multiple times, thus increase their bids, in the course of an auction. In this paper, we show that both underbidding and multiple bidding behaviors can be consistent with utility maximization, if buyer's utility incorporates a transaction utility (reference price dependent) component. Transaction utility is based on the difference between the buyer's reference price and actual price paid; it captures the perceived value of the deal. More specifically, we show that the optimal bid is lower than the reservation price, but higher than the reference price. Furthermore, buyer may re-bid (above the prior optimal level) if the reference price is revised upon observing a higher current price.
Publication Metadata only Aggregate earnings, firm-level earnings, and expected stock returns(Cambridge Univ Press, 2008) Tehranian, Hassan; Demirtaş Özgür; Department of Economics; Bali, Turan; Other; Department of Economics; College of Administrative Sciences and Economics; N/AThis paper provides an analysis of the predictability of stock returns using market-, industry-, and firm-level earnings. Contrary to Lamont (1998), we find that neither dividend payout ratio nor the level of aggregate earnings can forecast the excess market return. We show that these variables do not have robust predictive power across different stock portfolios and sample periods. In contrast to the aggregate-level findings, earnings yield has significant explanatory power for the time-series and cross-sectional variation in firm-level stock returns and the 48 industry portfolio returns. The mean reversion of stock prices as well as the earnings' correlation with expected stock returns are responsible for the forecasting power of earnings yield. These results are robust after controlling for book-to-market, size, price momentum, and post-earnings announcement drift. At the aggregate level, the information content of firm-level earnings about future cash flows is diversified away and higher aggregate earnings do not forecast higher returns.Publication Metadata only Analyzing federal reserve asset purchases: from whom does the Fed buy?(Elsevier Science Bv, 2015) Carpenter, Seth; Ihrig, Jane; Klee, Elizabeth; Department of Economics; Demiralp, Selva; Faculty Member; Department of Economics; College of Administrative Sciences and Economics; 42533Asset purchases have become an important monetary policy tool of the Federal Reserve in recent years. To date, most studies of the Federal Reserve's asset purchases have tried to measure the interest rate effects of the purchases, and several provide evidence that these purchases do have important effects on longer-term market interest rates. The theory of how asset purchases work, however, is less well developed. Some of the empirical studies point to "preferred habitat" models in which investors do not have the same objectives, and therefore prefer to hold different types and maturities of securities. To study this more closely, we exploit Flow of Funds data to assess the types of investors that are selling to the Federal Reserve and their portfolio adjustment after these sales, which could provide a view to the plausibility of preferred habitat models and the transmission of unconventional monetary policy across asset markets. We find that the Federal Reserve is ultimately buying from only a handful of investor types, primarily households (which includes hedge funds), with a different reaction to changes in Federal Reserve holdings of longer-term versus shorter-term assets. Although not evident for all investors, the key participants are shown to rebalance their portfolios toward more risky assets during this period. These results can be interpreted as supporting, at least in part, the preferred habit theory and the view that the monetary policy transmission is working across asset markets.Publication Open Access Base-rate information in consumer attributions of product-harm crises(American Marketing Association (AMA), 2012) Lei, Jing; Dawar, Niraj; Department of Business Administration; Department of Business Administration; Canlı, Zeynep Gürhan; Researcher; Department of Business Administration; College of Administrative Sciences and Economics; 16135Consumers spontaneously construct attributions for negative events such as product-harm crises. Base-rate information influences these attributions. The research findings suggest that for brands with positive prior beliefs, a high (vs. low) base rate of product-harm crises leads to less blame if the crisis is said to be similar to others in the industry (referred to as the "discounting effect"). However, in the absence of similarity information, a low (vs. high) base rate of crises leads to less blame toward the brand (referred to as the "subtyping effect"). For brands with negative prior beliefs, the extent of blame attributed to the brand is unaffected by the base-rate and similarity information. Importantly, the same base-rate information may have a different effect on the attribution of a subsequent crisis depending on whether discounting or subtyping occurred in the attribution of the first crisis. Consumers who discount a first crisis also tend to discount a second crisis for the same brand, whereas consumers who subtype a first crisis are unlikely to subtype again.Publication Open Access Being observed in the digital era: conceptualization and scale development of the perception of being observed(Wiley, 2022) Lefkeli, Deniz; Tulan, Dilan; Department of Business Administration; Canlı, Zeynep Gürhan; Faculty Member; Department of Business Administration; College of Administrative Sciences and Economics; 16135This research details the development of the perception of being observed scale. Consumers may think that their actions are being observed (i.e., seen, watched, recorded, tracked) by other parties (i.e., companies, governments, people) regardless of the actual knowledge about the existence of it. We develop a 10-item, uni-dimensional perception of being observed scale. Following the assessments of the scale, we conduct a series of studies to test the scale's convergent, discriminant, nomological, and predictive validity. We show that technology anxiety, self-consciousness and privacy concerns predict the perception of being observed. Further, people who experience the perception of being observed are more conservative in information disclosure.Publication Metadata only Benefiting from alliance portfolio diversity: the role of past internal knowledge creation strategy(2014) Dutta, Shantanu; Department of Business Administration; Wuyts, Stefan; Faculty Member; Department of Business Administration; Graduate School of Business; N/AThe perspective in alliance research has shifted from the individual dyad to alliance portfolios; a key descriptor of a firm’s alliance portfolio is diversity. Focusing on firms that are confronted with emerging technological fields, the authors examine the consequences of their alliance portfolio’s technological diversity on superior product innovation. The literature has not been conclusive about the consequences of portfolio diversity. The authors examine the nature of the effect of portfolio diversity on superior product innovation and follow up on the call for a contingency perspective—as not all firms benefit equally from portfolio diversity. The contingency perspective is based on the assertion that a firm’s past strategies in internal knowledge creation are a source of experiences that increase the firm’s capability to leverage extramural knowledge. Theoretically, the study thus contributes to the absorptive capacity literature that has recently acknowledged the importance of such higher-order internal capabilities. By identifying concrete dimensions of internal knowledge creation that enable firms to benefit from portfolio diversity, actionable recommendations are derived on how to align internal knowledge creation with external knowledge sourcing. The empirical support in the biopharmaceutical industry corroborates the developed theory and serves as a warning signal for firms that are ill prepared to leverage a diverse alliance portfolio.Publication Metadata only Bondholder governance, takeover likelihood, and division of gains(Elsevier, 2023) Akdogu, Evrim; Paukowits, Aysun Alp; Department of Business Administration; Çelikyurt, Uğur; Faculty Member; Department of Business Administration; College of Administrative Sciences and Economics; 47082We investigate the effect of creditor rights on the probability of becoming a takeover target by constructing firm-level bond covenant indices. Our primary result is that the more restrictive covenants a firm has, the more likely it is to become the target of an acquisition. This finding is robust to the exclusion of merger-related event-risk covenants which have the opposite impact and appear to reduce takeover likelihood. Furthermore, this effect is not driven by financially distressed firms and rather contained in small, profitable, financially healthy firms with high growth opportunities and low cash holdings. We also find that a higher target covenant index leads to a significant decrease (increase) in target (acquirer) abnormal returns around acquisition announcements and tilts merger gains towards the acquirer, suggesting the presence of a 'cove-nant discount' for potential target firms. Overall, our results are consistent with covenants creating key frictions, and in turn, making firms viable targets for acquirers with possibly deep pockets.Publication Open Access Brand concepts as representations of human values: do cultural congruity and compatibility between values matter?(American Marketing Association (AMA), 2012) Torelli, Carlos J.; Carvalho, Sergio W.; Keh, Hean Tat; Maehle, Natalia; Department of Business Administration; Tunalı, Ayşegül Özsomer; Faculty Member; Department of Business Administration; College of Administrative Sciences and Economics; 108158Global brands are faced with the challenge of conveying concepts that not only are consistent across borders but also resonate with consumers of different cultures. Building on prior research indicating that abstract brand concepts induce more favorable consumer responses than functional attributes, the authors introduce a generalizable and robust structure of abstract brand concepts as representations of human values. Using three empirical studies conducted with respondents from eight countries, they demonstrate that this proposed structure is particularly useful for predicting (1) brand meanings that are compatible (vs. incompatible) with each other and, consequently, more (less) favorably accepted by consumers when added to an already established brand concept; (2) brand concepts that are more likely to resonate with consumers with differing cultural orientations; and (3) consumers' responses to attempts to imbue an established brand concept with new, (in)compatible abstract meanings as a function of their own cultural orientations.