Scholars have questioned the effectiveness of several customer relationship management strategies. The author investigates the differential effects of customer relationship perceptions and relationship marketing instruments on customer retention and customer share development over time. Customer relationship perceptions are considered evaluations of relationship strength and a supplier's offerings, and customer share development is the change in customer share between two periods. The results show that affective commitment and loyalty programs that provide economic incentives positively affect both customer retention and customer share development, whereas direct mailings influence customer share development. However, the effect of these variables is rather small. The results also indicate that firms can use the same strategies to affect both customer retention and customer share development.

This essay examines interconnections between "race" and economic inequality in the United States, focusing on the case of African-Americans. I will argue that it is crucially important to distinguish between racial discrimination and racial stigma in the study of this problem. Racial discrimination has to do with how blacks are treated, while racial stigma is concerned with how black people are perceived. My view is that what I call reward bias (unfair treatment of persons in formal economic transactions based on racial identity) is now a less significant barrier to the full participation by African-Americans in U.S. society than is what I will call development bias (blocked access to resources critical for personal development but available only via non-market-mediated social transactions). By making these points in the specific cultural and historical context of the black experience in U.S. society, I hope to contribute to a deeper conceptualization of the worldwide problem of race and economic marginality.

We construct a model where the reputational concern of the long-run player to look good in the current period results in the loss of all surplus. This is in contrast to the bulk of the literature on reputations where such considerations mitigate myopic incentive problems. We also show that in models where all parties have long-run objectives, such losses can be avoided.

This study shows that the strategies of service firms affect the uncertainty they encounter in their dealings with customers. This strategically induced uncertainty then becomes the mechanism by which service firms organize their production processes. In a study of 234 service firms representing 96 different industries, we found strong support for relationships between these organizations' strategies and the level of complexity in their production processes. In addition, service firms that possessed the hypothesized fit between strategy and service production complexity tended to experience higher performance.

The theory of involuntary international transfers (war indemnities) has been constructed on the assumption that the donor and recipient are completely indifferent to each other’s well‐being. The assumption is hard to justify since usually the transfers closely follow periods during which the countries have been dropping bombs on each other. In the present paper, we rework the theory on the more plausible assumption that the well‐being of each country is negatively influenced by the well‐being of the other country. It is shown that, contrary to the conventional theory, the donor might benefit at the expense of the recipient, even when local Walrasian stability is imposed.

Abstract This paper investigates the contingent value of interorganizational relationships at the time of a young firm's initial public offering (IPO). We compare the signaling value to young firms of having ties with two types of interorganizational partnerships: endorsement relationships such as those with venture capital firms and investment banks, and strategic alliance partnerships. We propose that, under different equity market conditions, potential investors in an issuing firm attend to different types of uncertainty; attention to these different types of uncertainty affects investors' perceptions of the relative value of a young firm's different kinds of endorsements and partnerships and, hence, IPO success. Results from a sample of young biotechnology firms show that ties to prominent venture capital firms are particularly beneficial to IPO success during cold markets, while ties to prominent investment banks are particularly beneficial to IPO success during hot markets; a firm's strategic alliances with major pharmaceutical/health care firms did not have such contingent effects. Implications for understanding the contingent value of interorganizational ties are discussed. Copyright © 2003 John Wiley & Sons, Ltd.

We value a firm that pays its cash flows to equity through share repurchases in a dynamic environment where personal taxes are paid on capital gains upon realization. The cost of capital is reduced by approximately 0.8% through the use of repurchases relative to dividends. We use the empirical distribution of pre-tax free cash flows in Fama and French (1999) to evaluate the tradeoffs between the costs of financial distress, the personal-tax advantages of equity, and the corporate-tax advantage to debt. The optimal capital structure is interior with a 3% bankruptcy cost.

We develop a theory of market crashes based on differences of opinion among investors. Because of short-sales constraints, bearish investors do not initially participate in the market and their information is not revealed in prices. However, if other previously bullish investors bail out of the market, the originally bearish group may become the marginal "support buyers," and more will be learned about their signals. Thus accumulated hidden information comes out during market declines. The model explains a variety of stylized facts about crashes and also makes a distinctive new prediction—that returns will be more negatively skewed conditional on high trading volume.

Since the publication (1976) of the classic Lucas critique, researchers in empirical macroeconomics have endeavored to specify models that capture the underlying dynamic decision-making behavior of consumers and firms who require forecasts of future events. Recently, a number of researchers have developed simple models that have become the workhorses for monetary policy analysis. The models vary considerably with regard to optimizing foundations and explicit treatment of expectations. However, relatively little effort has been devoted to testing the empirical importance of the Lucas critique for these simple models. Can one find specifications that are policy-invariant? This paper develops and implements a set of tests for several monetary policy models used extensively in the literature. In particular, we attempt to test the robustness of optimizing versus nonoptimizing models to changes in the monetary policy regime. We present evidence that shows that some forward-looking models from the recent literature may be less stable than their better-fitting backward-looking counterparts.