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This paper’s main objective is to expand the demand-driven strategic field by developing a model where endogenization of consumers’ preferences for clean(er) products becomes the driver of the firm green corporate social responsible (GCSR) profit maximization behavior.

The model proposes that in undifferentiated markets, firms using a conventional technology manage production-related negative externalities via information asymmetries. In turn, when consumer socially responsible individuals (CnSR) discover the nature of the information asymmetries, they then reveal their preferences. The building block of the model is that CnSR derive value both from intrinsic as well as extrinsic product features, and derive negative satisfaction from the production negative externalities. In turn, CnSR preferences offer a higher willingness to pay for a combined intrinsic (private good and direct utility) and extrinsic (public good and feel good–do good utility) product.

The model demonstrates that the firm’s GCSR behavior is a technological-driven process directly affecting the extrinsic component of the product through the development of a safe technology, and exclusively targeting CnSR type of consumers. The corollary of the model is that for the firm pursuing a GCSR behavior, the development of a competitive advantage with higher firm performance leads to profit maximization when exclusively serving the GCSR segment of the market. Thus, GCSR is the result of unusual innovation efforts.

This paper presents a model that expands the field of strategic management through the demand-driven incorporation and respective modeling. To the best of the author’s knowledge, this is the first model to explicitly develop this relationship in this format.

Current research within law and economics focus on money laundering as an externality problem caused by financial institutions. Thus, when existing research and legislation place the responsibility on financial institutions, it creates a void where it is neglected that clients of financial institutions may, in fact, play a vital role in the problem of externality. However, based on the definition of money laundering, this paper aims to examine and analyze the need to focus on the clients as part of the externality problem with regard to money laundering.

This paper examines how a lack of regulatory focus on the clients of financial institutions lead to inefficient anti-money laundering regulation. Through a functional approach of law and economics, it analyzes the externality problem of money laundering based on both the legal definition and the economic conditions of the problem.

Based on the fourth anti-money laundering directive, the paper argues that present regulation has a tendency to focus on financial institutions, thereby not considering the entire scope of the externality problem in money laundering. For regulation to efficiently combat money laundering, it is necessary to place some responsibility on the clients of financial institutions and not solely on the financial institutions. Nevertheless, the inclusion of client responsibility might lead to some legal or economic complications, which need to be subject to further research.

The paper identifies the need for a fundamental change in the perception of the externality problem of money laundering, and thus, presents the required approach to reach an efficient solution.

The purpose of this paper is to examine information cascades in the context of users’ e-book reading behavior and differentiate it from alternative factors that lead to herd behavior, such as network externalities and word-of-mouth effects.

This paper constructed panel data using information concerning 226 e-books in 30 consecutive days from Sina.com’s reading channel (Book.Sina.com.cn) from October 2, 2013, to October 31, 2013 of the same year in China. A multinomial logit market-share model was employed.

E-books’ ranking has a significant impact on their market share, as predicted by informational cascades theory. Higher ranking e-books’ clicks will see a greater increase as a result of an increase in clicks ranking. Due to the information cascades effect, review volume had no impact on the market share of popular e-books. Total votes had a powerful impact on the market share of e-books, showing that once information cascade occurred, it could be enhanced by the increase in total votes. The total clicks of e-books had a significant impact on their market share, suggesting that online reading behavior would be influenced by network externalities.

As important information, the ranking or popularity of e-books should be carefully considered by online reading web sites, publishers, and authors. It is not enough for the authors and publishers of e-books to simply pay attention to the content. They should design their marketing strategies to allow network externalities and informational cascades to work for them, not against them. Online reading web sites should also focus on eliminating certain behavior, such as “brush clicks” and “brush votes,” in order to prevent an undesirable information cascade due to false information.

To the best of the knowledge, this is the first study to examine information cascades in the context of users’ e-book reading behavior. Moreover, this study can help other researchers by utilizing a large sample of daily data from one of the earliest online reading platforms in China.

The purpose of this paper is to consider competition’s issues between European market firms, such as Euronext, and multilateral trading facilities, following Markets in Financial Instruments Directive’s enforcement. This new domestic competition is adding to the existing international competition among financial centers. While diversification of local trading services can improve the international competitiveness of a financial center, the fragmentation of order flows can harm its attractiveness.

The theoretical setting analyzes the interaction between heterogeneous who experiment network externalities, and heterogeneous local trading services providers (alternative platforms and incumbent) in an international context. The authors compare two forms of organizations of the market: a consolidated market, and a fragmented market with alternative platforms – in both cases, in competition with a foreign universe.

The results of this study point out the importance of the trade-off between diversification and externalities. With alternative platforms entry, enhanced competition decreases fees and redistributes informed investors between the foreign market and the domestic one. The increase of domestic platforms’ number then has more complex effects on externalities (of information and liquidity). When the liquidity externalities are low, the diversification of financial platforms increases the number of investors on domestic centers. When liquidity externalities are not negligible, despite the decrease of fees, this same diversification orientates more informed investors to the foreign center.

This model is the first to analyze jointly the internal and international competition of trading platforms with heterogeneous investors.

The purpose of this paper is to analyse the way in which the factors influencing a transformation towards or away from modularity, according to general modular systems theory, appear in the context of health services, and the extent to which the special characteristics of health services might support or prevent its application.

The arguments constructed in the study are based on the theme of modularity, reflected against the special characteristics of health services identified in the context of health economics.

The results include 11 proposition pairs that direct health services both towards and away from modularity.

Health services are highly heterogeneous in nature and the authors illustrate this with a wide range of examples from elderly care as the authors discuss the application of modularity in this context. Nevertheless, the authors recognise that modularity might suit some health services better than others. The findings provide potentially important information to health service managers and providers, enabling them to understand how modularity would benefit health service provision and where contradictions are to be expected.

This study contributes to the discourse on service modularity in general, and complements the literature on modularity with reference to both public and private health services.

This paper sets out to describe and illustrate an emerging shift in the conceptualisation of value creation in business, namely the emergence of value ecology thinking.

This paper examines shifts in the understanding of value creation in key business, economic and innovation literature and focuses on developments in creative industries at the forefront of technology and innovation – film, TV, computer games, e‐business, mobile phones – to illustrate how business increasingly creates value through ecologies.

This paper identifies five important shifts in the conceptualization of value creation by highlighting a growing prevalence in the literature of several ecological metaphors used to explain business processes, namely: the shift from thinking about consumers to co‐creators of value; the shift from thinking about value chains to value networks; the shift from thinking about product value to network value; the shift from thinking about simple co‐operation or competition to complex co‐opetition; and the shift from thinking about individual firm strategy to strategy in relation to value ecologies.

This paper synthesizes emerging trends in the literature in relation to value creation and defines the concept of a value‐creating ecology. In the process it sheds light on the structure of next generation business systems.

This paper examines the asymptotic (in)efficiency of Stackelberg markets with incomplete information. Firms who are early in the queue make their quantity choices based on limited information and their output choices are likely to deviate from those optimal under complete information. Due to the presence of both payoff externality and information externality, the output deviations of early firms have a lasting effect on all subsequent output decisions. Consequently, the total market output diverges from the competitive equilibrium output even as the number of firms goes to infinity. That is, Stackelberg markets with incomplete information are asymptotically inefficient with probability one.

The purpose of this paper is to use a dynamic model of optimal patent design and, in the presence of information externalities, to study the evolution of technological progress in the context of a pharmaceutical industry.

A theoretical analysis approach is adopted to drive the paper’s findings.

Pharmaceutical firms with an active drug discovery program behave strategically in their R&D and in the product markets. It is shown that a firm holding an earlier-expiring patent only chooses to proceed with R&D activates when the patent it holds expires if the expected discounted payoff net of R&D costs yielded by this action is positive. The expected discounted payoff net of R&D costs obtained by this firm is then decreasing in R&D costs, increasing in the cumulative quality discovered in the past R&D activates, and decreasing in the number of past R&D activities, etc.

The preceding literature on the topic works with only one brand, the brand with the highest quality. As well, the demand is assumed to be completely inelastic. In the conventional models of patent design, the role of competitive fringe firms is discussed implicitly. The model presented in this research is a rigorous continuous in-time dynamic model. It considers several differentiated products. Furthermore, the demand for a brand is taken to be a function of income, its price, and the prices of other brands. The interaction of the fringe firm with other patent-holding firms is also explicitly considered under this framework.