Decision Making & Negotiations

A Sunday New York Times article on a potential development of new cancer-curing drugs caused EntreMed's stock price to rise from 12.063 at the Friday close, to open at 85 and close near 52 on Monday. It closed above 30 in the three following weeks. The enthusiasm spilled over to other biotechnology stocks. The potential breakthrough in cancer research already had been reported, however, in the journal Nature, and in various popular newspapers (including the Times) more than five months earlier.

In view of the distressingly low rate of success in new product introduction, it is important to identify predictive guidelines early in the new product development process so that better choices can be made and unnecessary costs avoided. In this paper, a framework for early analysis based on the success potential embodied in the product-idea itself and the circumstances of its emergence. Based on two studies reporting actual introductions, several determinants are identified that significantly distinguish successful from unsuccessful new products in the marketplace.

The common image of a lone folk scientist laboring to make sense of a single agent's behavior is helpful but incomplete in its recognition of social context as it surrounds the perceiver and as it is reflected in the perceiver's folk theories. In this chapter, we review insights from social and cultural psychology that both confirm and expand the perceiver-as-scientist view. We proceed in three parts.

We examine consumers' price sensitivity using a new approach that incorporates probabilistic thresholds for price gains and price losses in the reference price models. We model the threshold as a function of company, competitor and consumer specific factors. Model application to scanner panel data for coffee shows that our model is superior in fit compared to ordinary logit and two existing reference price models.

A long and rich tradition in Western-dominated social psychology has examined the effects of people's observations of their own behavior on their subsequent attitudes and behaviors. Studies in this tradition examine and find moderating effects of various contextual factors (e.g., volition and publicness) on people's tendencies to align their attitudes/behaviors with their observed behaviors. Conversely, there has been a historical tradition for examining the effects of social influences and group pressure on human thought and behavior.

This paper considers the current thrust in marketing to create global products, brands and strategies but also to "act local" when appropriate. Deciding which elements have similar effects and which are significantly different conceptually requires meta-analysis of each of the elements. Reviews some applications of marketing meta-analysis with a focus on international research.

For almost half a century, researchers have examined consumer knowledge of prices, often with disturbing and conflicting results. Although the general findings suggest that consumer knowledge of prices is poorer than assumed in neoclassical economic theory, significant variations among results exist. The authors synthesize findings from prior studies to determine the impact of research design choices on price recall accuracy measures.

A study uses Procter & Gamble's value pricing strategy as an opportunity to examine consumer and competitor response to a major, sustained change in marketing-mix strategy. The study estimates an econometric model to trace how consumers and competitors react to such changes. For the average brand, the study finds that deals and coupons increase market penetration and surprisingly have little impact on customer retention as measured by share-of-category requirements and category usage.

This research examines, across 2 studies, the interplay between the valence and arousal components of affective states and the affective tone of a target ad. In the first study, music was used to induce a pleasant or unpleasant mood, while controlling for arousal. Participants were subsequently exposed to an ad that either had a positive-affective tone or was ambiguous in its affective tone. As predicted, the valence of the affective state colored the evaluation of the ad in a mood-congruent direction, but this coloring effect occurred only when the ad had an ambiguous-affective tone.