Mitigating Choice Overload: An Experiment in the U.S. Beer Market

2018 ◽  
Vol 14 (01) ◽  
pp. 48-70 ◽  
Author(s):  
Trey Malone ◽  
Jayson L. Lusk
Keyword(s):  
Product Quality ◽  
Choice Overload ◽  
Negative Consequences ◽  
Search Cost ◽  
Market Interactions ◽  
The U.S ◽  
Jel Classifications

AbstractThis study tests the prevalence of choice overload (CO) in the U.S. beer market. We reveal that even if CO exists, sellers have mechanisms to reduce CO's negative consequences. The article describes the implementation of search cost-reducing private nudges (i.e., product quality scores and prominently listed specials) sellers commonly utilize to minimize CO's negative consequences. Our results suggest that, while CO exists for some buyers, it can be eliminated by market interactions on the part of the seller. (JEL Classifications: C93, D03, Q13)

Unexpected Consequences: The Effects on Non-Accelerated Filers of an Accelerated Filing Deadline and SOX Section 404

2020 ◽  
Vol 34 (3) ◽  
pp. 87-112
Author(s):  
Bei Dong ◽  
Stefanie L. Tate ◽  
Le Emily Xu
Keyword(s):  
Resource Allocation ◽  
Financial Statements ◽  
Financial Statement ◽  
Negative Consequences ◽  
Section 404 ◽  
Auditor Change ◽  
Time Required ◽  
Allocation Decisions ◽  
Jel Classifications ◽  
Resource Allocation Decisions

SYNOPSIS Regulations implemented by the SEC in 2003 and 2004 simultaneously shortened the financial statement filing deadlines and increased the time required for both the preparation of financial statements and the related audit of accelerated filers (AFs). However, there were indirect, unintended negative consequences for companies not subject to the regulations, namely, non-accelerated filers (NAFs). The new regulations imposed strains on auditor resources requiring auditors to make resource allocation decisions that negatively affected NAFs. We find that NAFs with an auditor who had a high proportion of AF clients (high-AF) had longer audit delays after the regulations were implemented than NAFs of an auditor with a low proportion of AF clients (low-AF). Further, we document that NAFs with high-AF auditors were more likely to change auditors than NAFs with low-AF auditors. Finally, NAFs that switched to auditors with less AFs experienced shorter audit delays after the auditor change. JEL Classifications: M42; M48.

When an Industry Peer Is Accused of Financial Misconduct: Stigma versus Competition Effects on Non-accused Firms

2021 ◽  
pp. 000183922110206
Author(s):  
Ivana Naumovska ◽  
Dovev Lavie
Keyword(s):  
Competitive Dynamics ◽  
Negative Consequences ◽  
Competition Effect ◽  
Market Returns ◽  
Stock Market Returns ◽  
Fine Grained ◽  
Competition Effects ◽  
Financial Misconduct ◽  
Industry Peers ◽  
The U.S

Research on misconduct suggests that accusations against industry peers generate negative consequences for non-accused firms (a “stigma effect”). Yet, building on research on competitive dynamics, we infer that such accusations can benefit non-accused firms that compete with these peers (a “competition effect”). To reconcile these opposing perspectives, we posit that the negative stigma effect will increase with greater product market overlap between the non-accused firm and its accused peer, up to a point, beyond which the positive competition effect will counterbalance it. We further conjecture that the competition effect will be relatively more pronounced when the market classification used by investors for assessing the market overlap is more fine-grained. Accordingly, we suggest that more sophisticated investors, who rely on more fine-grained market classifications, increase their shareholdings in non-accused firms to a greater extent than less sophisticated investors as the market overlap between the non-accused firm and the accused peer increases. Using elaborate data on products and investments, we analyze investors’ shareholdings and stock market returns of non-accused firms in the U.S. software industry following accusations of financial misconduct by their industry peers, and we find support for our predictions. Our study elucidates the interplay between stigma and competition following misconduct by industry peers.

Code Section 304: The Gift That Keeps on Giving

2019 ◽  
Vol 17 (1) ◽  
pp. 25-39
Author(s):  
Doron Narotzki ◽  
Melanie G. McCoskey
Keyword(s):  
Tax Avoidance ◽  
Tax Planning ◽  
Expected Loss ◽  
Legislative Change ◽  
Planning Tools ◽  
The Gift ◽  
Foreign Corporations ◽  
Jobs Act ◽  
The U.S ◽  
Jel Classifications

ABSTRACT The Tax Cuts and Jobs Act (TCJA) has created a unique opportunity to utilize Code Section 304 and Code Section 245A as powerful tax-planning tools. By utilizing the rules established for redemptions between related corporations under the anti-abuse provisions of Code Section 304 combined with the new 100 percent DRD of Code Section 245A, extracting earnings from affiliated foreign corporations tax-free has never been easier. This paper explains how these two code sections interact with each other and the resulting ability to extract certain foreign-sourced earnings tax-free. It also identifies incentives created by the TCJA to operate profitable businesses overseas and expected loss operations in the U.S. Finally, the paper offers a legislative change to close the tax avoidance loophole created by the TCJA. JEL Classifications: H2.

Don't Judge a Wine by Its Closure: Price Premiums for Corks in the U.S. Wine Market

2019 ◽  
Vol 14 (01) ◽  
pp. 3-25 ◽  
Author(s):  
Anton Bekkerman ◽  
Gary W. Brester
Keyword(s):  
Ordinary Least Squares ◽  
Grocery Stores ◽  
Purchase Decisions ◽  
Limited Information ◽  
Quantile Regressions ◽  
Wine Quality ◽  
Additional Information ◽  
Price Premiums ◽  
The U.S ◽  
Jel Classifications

AbstractFor many purchases, consumers often possess only limited information about product quality. Thus, observable product characteristics are used to determine expected quality levels when making purchase decisions. We use more than 1 million weekly scanner-level observations from grocery stores across ten U.S. markets between September 2009 and August 2012 to examine how consumers value a wine bottle's closure type (i.e., cork or screw cap). We focus on lower-priced wines—those with sale prices less than $30 per 750 milliliter bottle—to more accurately evaluate decisions of consumers for whom seeking additional information about wine quality is likely more costly than the benefits derived from that information. Using both pooled ordinary least squares and quantile regressions to estimate price premiums for bottles with corks or screw caps, we find that U.S. consumers are willing to pay, on average, approximately 8% more (about $1.00) for a bottle of wine that has a cork closure. In addition, we show that the size of this premium increases as wine prices decline. (JEL Classifications: D81, M31, Q11)

Restrictions on Managers' Outside Employment Opportunities and Asymmetric Disclosure of Bad versus Good News

2018 ◽  
Vol 94 (5) ◽  
pp. 1-25 ◽  
Author(s):  
Ashiq Ali ◽  
Ningzhong Li ◽  
Weining Zhang
Keyword(s):  
Opposite Effect ◽  
Career Concerns ◽  
Bad News ◽  
Good News ◽  
Corporate Disclosure ◽  
Employment Opportunities ◽  
Disclosure Policy ◽  
The U.S ◽  
Jel Classifications

ABSTRACT This study examines the effect of restrictions on managers' outside employment opportunities on voluntary corporate disclosure. The recognition of the Inevitable Disclosure Doctrine (IDD) by courts in the U.S. states in which the firms are headquartered places greater restrictions on their managers from joining or forming a rival company. We find that, on average, the IDD adoption increases the asymmetric withholding of bad news. We further show that the IDD adoption increases the asymmetric withholding of bad news relative to good news for firms whose managers are mainly concerned about losing their current job. However, an opposite effect is observed for firms whose managers are mainly interested in seeking promotion elsewhere. Furthermore, these effects are less pronounced for firms subject to greater monitoring of their disclosure policy. These results suggest that managers' career concerns affect corporate disclosure policy, and the effect varies with the type of career concerns. JEL Classifications: D82; M4.

scholarly journals Service Competition and Product Quality in the U.S. Automobile Industry

2016 ◽  
Vol 62 (7) ◽  
pp. 1860-1877 ◽  
Author(s):  
Jose A. Guajardo ◽  
Morris A. Cohen ◽  
Serguei Netessine
Keyword(s):  
Product Quality ◽  
Automobile Industry ◽  
Service Competition ◽  
The U.S

Co-operatives and the Equity-Liabilities Puzzle: Concerns for Accounting Standard-Setters

2012 ◽  
Vol 26 (4) ◽  
pp. 767-787 ◽  
Author(s):  
Germán López-Espinosa ◽  
John Maddocks ◽  
Fernando Polo-Garrido
Keyword(s):  
Classification Criteria ◽  
European Countries ◽  
Financial Instruments ◽  
Accounting Standard ◽  
Joint Project ◽  
Upper Limit ◽  
Net Assets ◽  
The U.S ◽  
Jel Classifications

SYNOPSIS: The IASB/FASB joint project on Financial Instruments with Characteristics of Equity (formerly Liabilities and Equity) has highlighted the complexity and the associated difficulty of drawing the line between liabilities and equity. While classification difficulties have been identified for investor-owned businesses (IOB), the inconsistency of the different approaches being considered is clearer when applied to classification of the financial instruments of co-operatives whose ownership characteristics differ from the IOB model. In co-operatives the existence of an upper limit on members' claims on the net assets while the co-operative is a going concern is a key ownership characteristic. We have examined the characteristics of co-operative member shares in six European countries as well as in the U.S. and in Canada, in order to analyze the application of the various classification approaches under discussion by the IASB and FASB. The results of this analysis indicate that classification criteria based on ownership must take account of the fact that ownership is multidimensional and contingent on the type of firm. JEL Classifications: M41, P13.

scholarly journals Social Inequality and Type 2 Diabetes Management among Older Latinx Immigrants

2020 ◽  
pp. 1-3
Author(s):  
Jasmin Tahmaseb McConatha ◽  
Jasmin Tahmaseb McConatha ◽  
Frauke Schnell
Keyword(s):  
Type 2 Diabetes ◽  
Diabetes Management ◽  
Well Being ◽  
The United States ◽  
Negative Consequences ◽  
Older Immigrants ◽  
Immigrant Populations ◽  
Health And Well Being ◽  
The U.S

Being an immigrant in the contemporary U.S. is stressful. During the pandemic of 2020, these stressors are amplified for all populations. At the same time, Latinx immigrants are also disproportionately affected by the pandemic. They are more vulnerable, face greater economic challenges, and are more likely to die from the virus. In addition to these difficult realities, regardless of status, Latinx immigrants are often perceived as illegal and subjected to discriminatory treatment [1]. Type 2 diabetes is also an illness that disproportionately affects minorities and immigrant populations. In 2018, there were almost 60 million Latinos-18% of the U.S. population (more than one in six)-living in the United States [2]. In addition to the myriad of stressors that immigrants, particularly older immigrants experience, the stigma and vulnerability associated with the pandemic of 2020 are likely to have serious negative consequences on their health and well-being. This paper addresses some of the challenges Latinx immigrants face as they struggle to manage Type 2 diabetes during a pandemic.

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