Showing papers by "University of Chicago published in 1993"

Strategic assets and organizational rent

Abstract: We build on an emerging strategy literature that views the firm as a bundle of resources and capabilities, and examine conditions that contribute to the realization of sustainable economic rents. Because of (1) resource-market imperfections and (2) discretionary managerial decisions about resource development and deployment, we expect firms to differ (in and out of equilibrium) in the resources and capabilities they control. This asymmetry in turn can be a source of sustainable economic rent. The paper focuses on the linkages between the industry analysis framework, the resource-based view of the firm, behavioral decision biases and organizational implementation issues. It connects the concept of Strategic Industry Factors at the market level with the notion of Strategic Assets at the firm level. Organizational rent is shown to stem from imperfect and discretionary decisions to develop and deploy selected resources and capabilities, made by boundedly rational managers facing high uncertainty, complexity, and intrafirm conflict.

The Antecedents and Consequences of Customer Satisfaction for Firms

Abstract: This research investigates the antecedents and consequences of customer satisfaction. We develop a model to link explicitly the antecedents and consequences of satisfaction in a utility-oriented framework. We estimate and test the model against alternative hypotheses from the satisfaction literature. In the process, a unique database is analyzed: a nationally representative survey of 22,300 customers of a variety of major products and services in Sweden in 1989-1990. Several well-known experimental findings of satisfaction research are tested in a field setting of national scope. For example, we find that satisfaction is best specified as a function of perceived quality and "disconfirmation"-the extent to which perceived quality fails to match prepurchase expectations. Surprisingly, expectations do not directly affect satisfaction, as is often suggested in the satisfaction literature. In addition, we find quality which falls short of expectations has a greater impact on satisfaction and repurchase intentions than quality which exceeds expectations. Moreover, we find that disconfirmation is more likely to occur when quality is easy to evaluate. Finally, in terms of systematic variation across firms, we find the elasticity of repurchase intentions with respect to satisfaction to be lower for firms that provide high satisfaction. This implies a long-run reputation effect insulating firms which consistently provide high satisfaction.

Variable selection via Gibbs sampling

Abstract: A crucial problem in building a multiple regression model is the selection of predictors to include. The main thrust of this article is to propose and develop a procedure that uses probabilistic considerations for selecting promising subsets. This procedure entails embedding the regression setup in a hierarchical normal mixture model where latent variables are used to identify subset choices. In this framework the promising subsets of predictors can be identified as those with higher posterior probability. The computational burden is then alleviated by using the Gibbs sampler to indirectly sample from this multinomial posterior distribution on the set of possible subset choices. Those subsets with higher probability—the promising ones—can then be identified by their more frequent appearance in the Gibbs sample.

Black hole entropy is the Noether charge

Abstract: We consider a general, classical theory of gravity in $n$ dimensions, arising from a diffeomorphism-invariant Lagrangian. In any such theory, to each vector field ${\ensuremath{\xi}}^{a}$ on spacetime one can associate a local symmetry and, hence, a Noether current ($n\ensuremath{-}1$)-form j and (for solutions to the field equations) a Noether charge ($n\ensuremath{-}2$)-form Q, both of which are locally constructed from ${\ensuremath{\xi}}^{a}$ and the fields appearing in the Lagrangian. Assuming only that the theory admits stationary black hole solutions with a bifurcate Killing horizon (with bifurcation surface $\ensuremath{\Sigma}$), and that the canonical mass and angular momentum of solutions are well defined at infinity, we show that the first law of black hole mechanics always holds for perturbations to nearby stationary black hole solutions. The quantity playing the role of black hole entropy in this formula is simply $2\ensuremath{\pi}$ times the integral over $\ensuremath{\Sigma}$ of the Noether charge ($n\ensuremath{-}2$)-form associated with the horizon Killing field. Furthermore, we show that this black hole entropy always is given by a local geometrical expression on the horizon of the black hole. We thereby obtain a natural candidate for the entropy of a dynamical black hole in a general theory of gravity. Our results show that the validity of the "second law" of black hole mechanics in dynamical evolution from an initially stationary black hole to a final stationary state is equivalent to the positivity of a total Noether flux, and thus may be intimately related to the positive energy properties of the theory. The relationship between the derivation of our formula for black hole entropy and the derivation via "Euclidean methods" also is explained.

The Voice of the Customer

Abstract: In recent years, many U.S. and Japanese firms have adopted Quality Function Deployment QFD. QFD is a total-quality-management process in which the "voice of the customer" is deployed throughout the R&D, engineering, and manufacturing stages of product development. For example, in the first "house" of QFD, customer needs are linked to design attributes thus encouraging the joint consideration of marketing issues and engineering issues. This paper focuses on the "Voice-of-the-Customer" component of QFD, that is, the tasks of identifying customer needs, structuring customer needs, and providing priorities for customer needs. In the identification stage, we address the questions of 1 how many customers need be interviewed, 2 how many analysts need to read the transcripts, 3 how many customer needs do we miss, and 4 are focus groups or one-on-one interviews superior? In the structuring stage the customer needs are arrayed into a hierarchy of primary, secondary, and tertiary needs. We compare group consensus affinity charts, a technique which accounts for most industry applications, with a technique based on customer-sort data. In the stage which provides priorities we present new data in which product concepts were created by product-development experts such that each concept stressed the fulfillment of one primary customer need. Customer interest in and preference for these concepts are compared to measured and estimated importances. We also address the question of whether frequency of mention can be used as a surrogate for importance. Finally, we examine the stated goal of QFD, customer satisfaction. Our data demonstrate a self-selection bias in satisfaction measures that are used commonly for QFD and for corporate incentive programs. We close with a brief application to illustrate how a product-development team used the voice of the customer to create a successful new product.

Differences of Opinion Make a Horse Race

Abstract: A model of trading in speculative markets is developed based on differences of opinion among traders. Our purpose is to explain some of the empirical regularities that have been documented concerning the relationship between volume and price and the time-series properties of price and volume. We assume that traders share common prior beliefs and receive common information but differ in the way in which they interpret this information. Some results are that absolute price changes and volume are positively correlated, consecutive price changes exhibit negative serial correlation, and volume is positively autocorrelated. Article published by Oxford University Press on behalf of the Society for Financial Studies in its journal, The Review of Financial Studies.

The Measurement and Determinants of Brand Equity: A Financial Approach

Abstract: This paper presents a technique for estimating a firm's brand equity that is based on the financial market value of the firm. Brand equity is defined as the incremental cash flows which accrue to branded products over unbranded products. The estimation technique extracts the value of brand equity from the value of the firm's other assets. This technique is useful for two purposes. First, the macro approach assigns an objective value to a company's brands and relates this value to the determinants of brand equity. Second, the micro approach isolates changes in brand equity at the individual brand level by measuring the response of brand equity to major marketing decisions. Empirically, we estimate brand equity using the macro approach for a sample of industries and companies. Then we use the micro approach to trace the brand equity of Coca-Cola and Pepsi over three major events in the soft drink industry from 1982 to 1986.

Amyotrophic lateral sclerosis and structural defects in Cu,Zn superoxide dismutase

Abstract: Single-site mutants in the Cu,Zn superoxide dismutase (SOD) gene (SOD1) occur in patients with the fatal neurodegenerative disorder familial amyotrophic lateral sclerosis (FALS). Complete screening of the SOD1 coding region revealed that the mutation Ala4 to Val in exon 1 was the most frequent one; mutations were identified in exons 2, 4, and 5 but not in the active site region formed by exon 3. The 2.4 A crystal structure of human SOD, along with two other SOD structures, established that all 12 observed FALS mutant sites alter conserved interactions critical to the beta-barrel fold and dimer contact, rather than catalysis. Red cells from heterozygotes had less than 50 percent normal SOD activity, consistent with a structurally defective SOD dimer. Thus, defective SOD is linked to motor neuron death and carries implications for understanding and possible treatment of FALS.

Catholic schools and the common good

Abstract: Preface Prologue CONTEXT The Tradition of Catholic Schools Research Past and Present INSTITUTIONAL ANALYSIS Classroom Life Curriculum and Academic Organization Communal Organization Governance DIVERSITY AMONG CATHOLIC SCHOOLS The Transition to High School Variations in Internal Operations Single-Sex versus Coeducational Schools EFFECTS The Impact of Academic Organization The Impact of Communal Organization IMPLICATIONS Catholic Lessons for America's Schools Epilogue: The Future of Catholic High Schools Notes References Index

Affect, culture, and morality, or is it wrong to eat your dog?

Abstract: Are disgusting or disrespectful actions judged to be moral violations, even when they are harmless? Stories about victimless yet offensive actions (such as cleaning one's toilet with a flag) were presented to Brazilian and U.S. adults and children of high and low socioeconomic status (N = 360). Results show that college students at elite universities judged these stories to be matters of social convention or of personal preference. Most other Ss, especially in Brazil, took a moralizing stance toward these actions. For these latter Ss, moral judgments were better predicted by affective reactions than by appraisals of harmfulness. Results support the claims of cultural psychology (R.A. Shweder, 1991a) and suggest that cultural norms and culturally shaped emotions have a substantial impact on the domain of morality and the process of moral judgment. Suggestions are made for building cross-culturally valid models of moral judgment.

Black strings and p -branes are unstable

Abstract: We investigate the evolution of small perturbations around black strings and branes which are low energy solutions of string theory. For simplicity we focus attention on the zero charge case and show that there are unstable modes for a range of time frequency and wavelength in the extra 10[minus][ital D] dimensions. These perturbations can be stabilized if the extra dimensions are compactified to a scale smaller than the minimum wavelength for which instability occurs and thus will not affect large astrophysical black holes in four dimensions. We comment on the implications of this result for the cosmic censorship hypothesis.

Political Regimes and Economic Growth

Abstract: Arguments that relate regimes to growth focus on property rights, pressures for immediate consumption, and the autonomy of dictators. While everyone seems to agree that secure property rights foster growth, it is controversial whether democracies or dictatorships better secure these rights. The main mechanism by which democracy is thought to hinder growth is pressure for immediate consumption, which reduces investment. Only states that are institutionally insulated from such pressures can resist them, and democratic states are not. The main argument against dictatorships is that authoritarian rulers have no interest in maximizing total output. These views are summarized in turn.

Talented Teenagers: The Roots of Success and Failure

Abstract: Acknowledgments 1. Introduction Part I. Talented Teens: 2. What is talent? 3. How the study was conducted: methods and procedures 4. What are talented teenagers like? 5. How talented teenagers live Part II. The development of Talent: 6. Fields and domains of talent in adolescence 7. The experience of talent 8. How families influence the development of talent 9. Schools, teachers, and talent development Part III. The Cultivation of Talent: 10. Commitment to talent and its correlates 11. Cultivating talent throughout life 12. What have we learned? Appendixes References Index.

Conditional Choice Probabilities and the Estimation of Dynamic Models

Abstract: This paper develops a new method for estimating the structural parameters of (discrete choice) dynamic programming problems. The method reduces the computational burden of estimating such models. We show the valuation functions characterizing the expected future utility associated with the choices often can be represented as an easily computed function of the state variables, structural parameters, and the probabilities of choosing alternative actions for states which are feasible in the future. Under certain conditions, nonparametric estimators of these probabilities can be formed from sample information on the relative frequencies of observed choices using observations with the same (or similar) state variables. Substituting the estimators for the true conditional choice probabilities in formulating optimal decision rules, we establish the consistency and asymptotic normality of the resulting structural parameter estimators. To illustrate our new method, we estimate a dynamic model of parental contraceptive choice and fertility using data from the National Fertility Survey.

Contrarian Investment, Extrapolation, and Risk

Abstract: For many years, stock market analysts have argued that value strategies outperform the market. These value strategies call for buying stocks that have low prices relative to earnings, dividends, book assets, or other measures of fundamental value. While there is some agreement that value strategies produce higher returns, the interpretation of why they do so is more controversial. This paper provides evidence that value strategies yield higher returns because these strategies exploit the mistakes of the typical investor and not because these strategies are fundamentally riskier.

Turning points in the life course: why change matters to the study of crime*

Abstract: This article examines conceptual issues relating to continuity and change in crime over the life course. Building on past efforts, we first distinguish self-selection from a cumulative, developmental process whereby delinquent behavior attenuates adult social bonds (e.g., labor force attachment, marital cohesion). We then conceptualize various types of change and argue that social capital and turning points are crucial in understanding processes of change in the adult life course. These concepts are illustrated by examining person-based, life-history data drawn from the Gluecks' longitudinal study of 1,000 men. Although adult crime is clearly connected to childhood behavior, these qualitative data suggest that both incremental and abrupt change are structured by changes in adult social bonds. We conclude with some hypotheses and implications for future research on subjective contingencies, opportunity structures, and chance encounters as potential turning points for change, especially as they interact with race, class location, and historical context.

Amphetamine: effects on catecholamine systems and behavior.

Abstract: Amphetamine (AMPH) was first synthesized in 1887 (2). The sympathomi­ metic and respiratory stimulant effects of AMPH were described in 1933 (3-5) and in 1 935 its stimulant actions were found to be useful in the treatment of narcolepsy (6) . AMPH has been used for the treatment of obesity (7) , attention deficit hyperactivity disorder (ADHD) (8) , and occasionally for Parkinson's disease (9) . AMPH causes euphoria and stimulation in humans , and these effects often lead to its habitual use or abuse. With repeated AMPH use, tolerance to its effects on mood often develops and the dose is escalated (7, 10). Large doses of AMPH can induce a psychotic state resembling paranoid schizophrenia (11-13). The effects of AMPH in humans have close parallels in animals. At low doses , AMPH increases stereotypic locomotor activity and species-specific stereotypies at higher doses ( 14); AMPH interferes with intake

Multiple scenario development: its conceptual and behavioral foundation

Abstract: This paper examines the multiple scenario approach as an important corporate innovation in strategic planning. Using a participant/observer perspective, I examine how scenario planning tries to meet certain methodological, organizational and psychological challenges facing today's senior managers. Three prime characteristics are identified as setting the scenario approach apart from more traditional planning tools: (1) the script or narrative approach, (2) uncertainty across rather than within models, and (3) the decomposition of a complex future into discrete states. After exploring the intellectual roots of scenario planning, I examine such organizational aspects as the need for diversity of views and the importance of simplicity and manageability. Both benefits and obstacles to using scenarios in organizations are identified. Cognitive biases are examined as well, especially the well-known biases of overconfidence and the conjunction fallacy. Two experiments test the impact of scenarios on people's subjective confidence ranges. Another two experiments test the internal coherence of subjects' beliefs. The psychological benefit of scenario planning appears to tie in the exploitation of one set of biases (e.g., conjunction fallacies) to counteract another (such as overconfidence).

The Syndromes of Resistance to Thyroid Hormone

Abstract: I. Introduction THE syndromes of resistance to thyroid hormone are characterized by reduced clinical and biochemical manifestations of thyroid hormone action relative to the circulating hormone levels. In practice, most patients are identified by the persistent elevation of serum levels of T4 and T3 with “inappropriately” nonsuppressed TSH, in the absence of intercurrent acute illness, drugs, or alterations of thyroid hormone binding to serum proteins. More importantly, administration of supraphysiological doses of thyroid hormone fail to produce the expected suppressive effect on the secretion of pituitary TSH and/or to induce the expected metabolic responses in the peripheral tissues. Since the publication of the index cases in 1967 (1), 347 subjects have been reported who exhibit the characteristics of the syndrome (Refs. 1–129 and our personal communications and observations). In this review, we summarize all cases known to us, present their common features as well as unusual manifestations, and attem...

Crime in the Making

Abstract: This explanation of crime and deviance over the life course is based on the re-analysis of a classic set of data: Sheldon and Eleanor Glueck's mid-century study of 500 delinquents and 500 non-delinquents from childhood to adulthood. More than five years ago, Robert Sampson and John Laub dusted off 60 cartons of the Gluecks' data that had been stored in the basement of the Harvard Law School and undertook a lengthy process of recoding, computerizing, and reanalyzing it. On the basis of their findings, Sampson and Laub developed a theory of informal social control over the life course which integrates three ideas. First, social bonds to family and school inhibit delinquency in childhood and adolescence. Second, there is continuity in antisocial and deviant behaviour from childhood through adulthood across various dimensions, such as crime, alcohol abuse, divorce and unemployment. And finally, despite these continuities, attachment to the labour force and cohesive marriage sharply mitigate criminal activities. Sampson and Laub thus acknowledge the importance of childhood behaviours and individual differences, but reject the implication that adult social factors have little relevance. They seek to account for both stability and change in crime and deviance throughout the life course. "Crime in the making" challenges several major ideas found in contemporary theory and aims to provide an important new foundation for rethinking criminal justice policy.

What Do Judges and Justices Maximize? (The Same Thing Everybody Else Does)

Abstract: This article presents a positive economic theory of the behavior of appellate judges and Justices. The essay argues that the effort to insulate judges from significant economic incentives, through devices such as life tenure and stringent conflict of interest rules, has not rendered judicial behavior immune to economic analysis. Drawing on analogies to the managers of non-profit enterprises, to those who vote in political elections, and to theatrical spectators, the essay models the judicial utility function in terms that allows judges to be seen as ordinary people responding rationally to ordinary incentives. This model provides a theoretical alternative to the common view of judges as Prometheans or saints, and it suggests new ways of looking at such practical issues as the design of the judicial compensation system.

Some conceptual and statistical issues in analysis of longitudinal psychiatric data. Application to the NIMH treatment of Depression Collaborative Research Program dataset.

Abstract: L studies have a prominent role in psychiatric research; however, statistical methods for analyzing these data are rarely commensurate with the effort involved in their acquisition. Frequently the majority of data are discarded and a simple end-point analysis is performed. In other cases, so called repeated-measures analysis of variance procedures are used with little regard to their restrictive and often unrealistic assumptions and the effect of missing data on the statistical properties of their estimates. We explored the unique features of longitudinal psychiatric data from both statistical and conceptual perspectives. We used a family of statistical models termed random regression models that provide a more realistic approach to analysis of longitudinal psychiatric data. Random regression models provide solutions to commonly observed problems of missing data, serial correlation, time-varying covariates, and irregular measurement occasions, and they accommodate systematic person-specific deviations from the average time trend. Properties of these models were compared with traditional approaches at a conceptual level. The approach was then illustrated in a new analysis of the National Institute of Mental Health Treatment of Depression Collaborative Research Program dataset, which investigated two forms of psychotherapy, pharmacotherapy with clinical management, and a placebo with clinical management control. Results indicated that both person-specific effects and serial correlation play major roles in the longitudinal psychiatric response process. Ignoring either of these effects produces misleading estimates of uncertainty that form the basis of statistical tests of hypotheses.

A Simple Theory of Advertising as a Good or Bad

Abstract: Our analysis treats advertisements and the goods advertised as complements in stable metautility functions, and generates new results for advertising by building on and extending the general analysis of complements. By assimilating the theory of advertising into the theory of complements, we avoid the special approaches to advertising found in many studies that place obstacles in the way of understanding the effects of advertising. We also use this approach to evaluate advertising from a welfare perspective. Whether there is excessive or too little advertising depends on several variables: the effects on consumer utility, the degree of competition in the market for advertised goods, the induced changes in prices and outputs of advertised goods, and whether advertising is sold to consumers.

Growth Effects of Flat-Rate Taxes

Abstract: Recent estimates of the potential growth effects of tax reform vary widely, ranging from zero (Lucas 1990) to eight percentage points (Jones, Manuelli, and Rossi 1993). Using an endogenous growth model, we assess which model features and parameter values are important for determining the quantitative impact of tax reform. We find that the critical parameters are factor shares, depreciation rates, the elasticity of intertemporal substitution, and the elasticity of labor supply. The elasticities of substitution in production, on the other hand, are relatively unimportant. The quantitative estimates in several recent papers are compared with each other and with some of the evidence from U.S. experience.

Mechanical stress mechanisms and the cell. An endothelial paradigm.

Abstract: There are important physiological and pathological cardiovascular consequences related to endothelial biomechanical properties. The endothelium, however, is not unique in responding to external forces; virtually all cells accommodate or respond to the mechanical environment.