This is a picture of ESMT books and working papers

Publications

ESMT Berlin publishes in international academic journals, which are first-class in their respective fields. Research also provides cutting-edge and profound insights for the business community as well as the classroom through managerial publications and case studies. This rare integration of research and practice makes ESMT Berlin an outstanding location for generating relevant and ground-breaking knowledge.

Journal Article

Leadership mindsets for IT success

The European Business Review March/April: 50–53
Donald A. Marchand, Joe Peppard (2014)
Abstract:
Subject(s): Information technology and systems, Strategy and general management
Issue March/April
Pages 50–53

Journal Article

Pricing and revenue management: The value of coordination

Management Science 60 (3): 730–752
Ayse Kocabiykoglu, Ioana Popescu, Catalina Stefanescu (2014)
Abstract:
Subject(s): Product and operations management
Keyword(s): Revenue management, pricing, coordination, price-sensitive stochastic demand, hierarchical policies, lost sales rate elasticity

The integration of systems for pricing and revenue management must trade off potential revenue gains against significant practical and technical challenges. This dilemma motivates us to investigate the value of coordinating decisions on prices and capacity allocation in a stylized setting. We propose two pairs of sequential policies for making static decisions—on pricing and revenue management—that differ in their degree of integration (hierarchical versus coordinated) and their pricing inputs (deterministic versus stochastic). For a large class of stochastic, price-dependent demand models, we prove that these four heuristics admit tractable solutions satisfying intuitive sensitivity properties. We further evaluate numerically the performance of these policies relative to a fully coordinated model, which is generally intractable. We find it interesting that near-optimal performance is usually achieved by a simple hierarchical policy which sets prices first, based on a non-nested stochastic model, and then uses these prices to optimize nested capacity allocation. This tractable policy largely outperforms its counterpart based on a deterministic pricing model. Jointly optimizing price and allocation decisions for the high-end segment improves performance, but the largest revenue benefits stem from adjusting prices to account for demand risk.

© 2014 INFORMS

Volume 60
Issue 3
Pages 730–752

Journal Article

Psychological safety: The history, renaissance, and future of an interpersonal construct

Annual Review of Organizational Psychology and Organizational Behavior 1 (1): 23–43
Amy C. Edmondson, Zhike Lei (2014)
Abstract:
Subject(s): Human resources management/organizational behavior
Keyword(s): Organizational behavior, psychology, error management, safety
Volume 1
Issue 1
Pages 23–43

Journal Article

The equivalence of bundling and advance sales

Marketing Science 33 (2): 259–272
Alexei Alexandrov, Özlem Bedre-Defolie (2014)
Abstract:
Subject(s): Economics, politics and business environment
Keyword(s): Advance selling, bundling, price discrimination
JEL Code(s): L11, D42

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.

© 2014 INFORMS

Volume 33
Issue 2
Pages 259–272

Journal Article

There is nothing permanent except change: Analysing individual price dynamics in 'pay-what-you-want' situations

Marketing Letters 25 (1): 25–36
Mario Rese, Jan Wieseke, Wiebke Rasmussen, Laura Marie Schons, Wolf-Christian Strotmann, Daniel Weber (2014)
Abstract:
Subject(s): Marketing
Keyword(s): Participative pricing, pay what you want, long-term price dynamics, reference prices, latent growth modeling
Volume 25
Issue 1
Pages 25–36

Journal Article

Confidence via correction: The effect of judgment correction on consumer confidence

Journal of Consumer Psychology 24 (1): 34–48
Francine Espinoza Petersen, Rebecca W. Hamilton (2014)
Abstract:
Subject(s): Marketing
Keyword(s): confidence, correction, credibility, persuasion, advertising

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.

With permission of Elsevier

Volume 24
Issue 1
Pages 34–48

Journal Article

Regular prices and sales

Theoretical Economics 9 (1): 217–251
Paul Heidhues, Botond Kőszegi (2014)
Abstract:
Subject(s): Economics, politics and business environment
Keyword(s): reference-dependent utility, gain-loss utility, loss aversion, sticky prices, sales, supermarket pricing

It is widely known that loss aversion leads individuals to dislike risk, and as has been argued by many researchers, in many instances this creates an incentive for firms to shield consumers and employees against economic risks. Complementing previous research, we show that consumer loss aversion can also have the opposite effect: it can lead a firm to optimally introduce risk into an otherwise deterministic environment. We consider a profit-maximizing monopolist selling to a loss-averse consumer, where (following Koszegi and Rabin (2006)) we assume that the consumer's reference point is her recent rational expectations about the purchase. We establish that for any degree of consumer loss aversion, the monopolist's optimal price distribution consists of low and variable "sale" prices and a high and atomic "regular" price. Realizing that she will buy at the sale prices and hence that she will purchase with positive probability, the consumer chooses to avoid the painful uncertainty in whether she will get the product by buying also at the regular price. This pricing pattern is consistent with several recently documented facts regarding retailer pricing. We show that market power is crucial for this result: when firms compete ex ante for consumers, they choose deterministic prices.

This is an open access article.

Volume 9
Issue 1
Pages 217–251

Journal Article

Time-based competition with benchmark effects

Manufacturing and Service Operations Management 16 (1): 119–132
Liu Yang, Francis de Véricourt, Peng Sun (2014)
Abstract:
Subject(s): Product and operations management
Keyword(s): Waiting time competition; benchmark effect; loss aversion; queues; game theory

We consider a duopoly where firms compete on waiting times in the presence of an industry benchmark. The demand captured by a firm depends on the gap between the firm's offer and the benchmark. We refer to the benchmark effect as the impact of this gap on demand. The formation of the benchmark is endogenous and depends on both firms' choices. When the benchmark is equal to the shorter of the two offered delays, we characterize the unique Pareto optimal Nash equilibrium. Our analysis reveals a stickiness effect in which firms equate their delays at the equilibrium when the benchmark effect is sufficiently strong. When the benchmark corresponds to a weighted average of the two offered delays, we show the existence of a pure Nash equilibrium. In this case, we reveal a reversal effect, in which the market leader, i.e., the firm that offers a shorter delay, becomes the follower when the benchmark effect is sufficiently strong. In both cases, we show that customers' equilibrium waiting times are shorter with the benchmark effect than without it. Our models also capture customers' loss aversion, which, in our setting, states that demand is more sensitive to the gap between the delay and the benchmark when the delay is longer than the benchmark (loss) than when it is shorter (gain). We characterize the impact of this loss aversion on the equilibrium in both settings. Finally, we show numerically that the stickiness and reversal effects still exist when firms also compete on price.

© 2014 INFORMS

Volume 16
Issue 1
Pages 119–132

Journal Article

Incidence and growth of patent thickets: The impact of technological opportunities and complexity

Journal of Industrial Economics 61 (3): 521–563
Georg von Graevenitz, Stefan Wagner, Dietmar Harhoff (2013)
Abstract:
Subject(s): Technology, R&D management
Keyword(s): patenting, patent thickets, patent portfolio races, complexity, technological opportunities
JEL Code(s): L13, L20, O34

We analyze incidence and evolution of patent thickets. The paper provides a modeling framework showing how competition for patent portfolios, complementarity of patented technologies and hold-up affect patenting. Predictions are that technological opportunity reduces patenting in complex technologies, while increasing patenting in discrete technologies. Competition has the opposite effects. The predictions are tested using European patent data in a panel with 2,074 patenting firms in thirty technology areas over fifteen years. A new measure of technological complexity is applied. GMM estimation results confirm the predictions of our preferred model. Patent thickets are found in nine out of thirty technology areas.

© 2013 The Editorial Board of The Journal of Industrial Economics and John Wiley & Sons Ltd

Volume 61
Issue 3
Pages 521–563

Journal Article

Correcting for unconscious experiential processing

Advances in Consumer Research 40: 403–407
Francine Espinoza Petersen (2013)
Abstract:
Subject(s): Marketing
Keyword(s): consumption, emotional conditioning
Volume 40
Pages 403–407

Journal Article

Expanding the theoretical boundaries of consumer acculturation: Investigating the role of institutional forces and nostalgia

Advances in Consumer Research 41: 94–99
Katja H. Brunk, Luca M. Visconti, Ela Veresiu (2013)
Abstract:
Subject(s): Marketing
Keyword(s): Acculturation, nostalgia, consumer culture
Volume 41
Pages 94–99

Journal Article

Information exposure, opportunity evaluation and entrepreneurial action: An investigation of an online user community

Academy of Management Journal 56 (5): 1348–1371
Erkko Autio, Linus Dahlander, Lars Frederiksen (2013)
Abstract:
Subject(s): Entrepreneurship, Technology, R&D management
Keyword(s): entrepreneurial action, information exposure, opportunity recognition, opportunity evaluation, user entrepreneurship

We study how an individual's exposure to external information regulates the evaluation of entrepreneurial opportunities and entrepreneurial action. Combining data from interviews, a survey, and a comprehensive web log of an online user community spanning eight years, we find that technical information shaped opportunity evaluation and that social information about user needs drove individuals to entrepreneurial action. Our empirical findings suggest that reducing demand uncertainty is a central factor regulating entrepreneurial action, an insight that received theories of entrepreneurial action have so far overlooked.

With permission of the Academy of Management

Volume 56
Issue 5
Pages 1348–1371

Journal Article

Geben und nehmen [Give and take]

Harvard Business Manager 10: 12–13
Linus Dahlander, Henning Piezunka (2013)
Abstract:
Subject(s): Entrepreneurship
Issue 10
Pages 12–13

Journal Article

Migration, sustainable development and the role of business

UN Chronicle L (3): 22–25
CB Bhattacharya, Ursula Moffitt (2013)
Abstract:
Subject(s): Economics, politics and business environment, Entrepreneurship, Ethics and social responsibility
Keyword(s): migration, sustainable development, business, corporate responsibility, remittances
Volume L
Issue 3
Pages 22–25

Journal Article

Politically connected boards of directors and the allocation of procurement contracts

Review of Finance 17 (5): 1617–1648
Eitan Goldman, Jörg Rocholl, Jongil So (2013)
Abstract:
Subject(s): Economics, politics and business environment
Keyword(s): politics, corporate governance, boards, procurement contracts
JEL Code(s): G32, G34, G38
Volume 17
Issue 5
Pages 1617–1648

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