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Article
Publication date: 8 March 2011

Graeme Newell, Nelson Chan and Evan Goodridge

This paper aims to assess all compulsory land acquisition court decisions in Australia over 1985‐2009 to provide a risk assessment and compensation analysis involved in proceeding…

1393

Abstract

Purpose

This paper aims to assess all compulsory land acquisition court decisions in Australia over 1985‐2009 to provide a risk assessment and compensation analysis involved in proceeding to court for compulsory land acquisition cases.

Design/methodology/approach

Using the AustLII legal database, every publicly available compulsory land acquisition court case decision in Australia over 1985‐2009 is assessed. These 58 court cases are assessed for claim, offer and judgment value.

Findings

A total of 91.4 percent of compulsory land acquisition court cases over 1985‐2009 were found to be successful in achieving a judgment value of at least that of the offer. The median judgment value for successful cases was 60 percent higher than the offer value, while for unsuccessful cases it was 68 percent lower than the offer value. Successful smaller judgments (<$2 million) generated more upside compensation (median of 66 percent) than larger judgments (>$2 million) (median 41 percent upside compensation). Appealed cases were found to be only 28.6 percent successful, with only a maximum of 5.6 percent additional compensation achieved.

Practical implications

This paper provides a rigorous empirical risk assessment and compensation analysis for compulsory land acquisition court cases in Australia over the last 25 years. This provides an effective tool for dispossessed property owners, statutory acquirers and their professional legal and valuation advisors for more informed compulsory land acquisition court case decision making.

Originality/value

Using all compulsory land acquisition court decisions in Australia over the last 25 years, this paper is the first attempt internationally to rigorously and empirically conduct a risk assessment and compensation analysis involved with proceeding to court for compulsory land acquisition cases. Given the significance of the compulsory land acquisition process, this empirically validated research enables a more informed and critical understanding of the risk factors and compensation outcomes attached to the compulsory land acquisition court case judgment process.

Details

Journal of Property Investment & Finance, vol. 29 no. 2
Type: Research Article
ISSN: 1463-578X

Keywords

Article
Publication date: 7 August 2023

Bo Wang and Tingting Xie

According to construal level theory, close (versus far) psychological distance is associated with low (versus high) construal level. Despite the evidence for discount frame…

Abstract

Purpose

According to construal level theory, close (versus far) psychological distance is associated with low (versus high) construal level. Despite the evidence for discount frame effect, it is unclear whether psychological distance and product nature play moderating roles. In addition, little has been known whether the effect of discount frame can extend to other dependent variables such as willingness to pay (WTP). Driven by construal level theory, five experiments were conducted to explore whether the effect of discount frame is dependent on psychological distance and product nature (i.e. utilitarian versus hedonic product).

Design/methodology/approach

The experimental method was used, with discount frame, psychological distance and product type as the independent variables and purchase intention, attitude towards the advertisement, perceived value and WTP as the dependent variables. Participants were presented with promotion scenarios in which psychological distance and discount format were manipulated. In order to test the generalizability of results, promotional scenarios for both utilitarian (i.e. backpack bag and shampoo) and hedonic products (i.e. scenery ticket and perfume) were presented. Data were collected via the online experiment platform (i.e. www.Credamo.com).

Findings

The authors found an interaction between discount frame and spatial distance in that consumers had more positive attitude toward percent off than amount off under near-spatial distance. However, no interaction was observed between discount frame and temporal, social or hypothetical distance.

Originality/value

Taken together, the current study for the first time reveals that the effect of discount frame is contingent on a specific dimension of psychological distance (i.e. spatial distance), regardless of whether the product is utilitarian or hedonic. Findings from this study for the first time pose a challenge to the notion that construal-level match necessarily leads to more favorable consumer responses, suggesting that there may be a unique mechanism underlying the joint effects of spatial distance and discount frame. The current findings can provide important implications for marketers and retailers in an effort to design effective promotional messages.

Details

Marketing Intelligence & Planning, vol. 41 no. 6
Type: Research Article
ISSN: 0263-4503

Keywords

Article
Publication date: 21 June 2022

Bo Wang

This study examines whether the absolute number heuristic holds for consumers' responses to higher-priced versus lower-priced products. Further, it explores whether the different…

Abstract

Purpose

This study examines whether the absolute number heuristic holds for consumers' responses to higher-priced versus lower-priced products. Further, it explores whether the different construal level as induced from presence or absence of a product image can be a boundary condition for the absolute number heuristic.

Design/methodology/approach

Four experiments were conducted. In Experiments 1 and 2, participants were presented with a discount either in the amount off or percent off format, for products whose prices were 99 Yuan, 100 Yuan and 101 Yuan, respectively. In Experiment 3, the prices were changed to be 90 Yuan, 900 Yuan and 9,000 Yuan, respectively. In Experiment 4, the prices were 48 Yuan and 480 Yuan, respectively.

Findings

Experiment 1 showed neither main effect of discount frame nor interaction between price level and discount frame for all dependent variables (i.e. willingness to pay or WTP, purchase intention, attitude and perceived value), thus posing a challenge to the absolute number heuristic. Notably, the lack of main effect and interaction for purchase intention, attitude and perceived value were replicated in Experiments 2, 3 and 4. With WTP being the dependent variable, however, Experiment 4 showed that the effect of discount frame was dependent on price level.

Research limitations/implications

The current findings pose a challenge to the absolute number heuristic and contribute to the literature by revealing that the joint effects of price level and discount frame can be moderated by whether an ad contains the product image.

Practical implications

It is necessary for marketers to realize that inclusion of a product image may eliminate the effect of discount frame. Specifically, in terms of promoting a relatively expensive product, in order for the percent off discount to enhance the amount of money that consumers are willing to pay, an ad without a product image may be more favorable.

Originality/value

The current study is the first to challenge the absolute number heuristic by showing that the interaction between price level and discount frame is contingent on whether an ad contains the product image.

Details

Marketing Intelligence & Planning, vol. 40 no. 7
Type: Research Article
ISSN: 0263-4503

Keywords

Article
Publication date: 18 June 2019

Angelina Christie and Daniel Houser

The purpose of this paper is to test whether underpricing can serve as a signal of quality in a financing-investment environment and to compare it under the two institutions for…

Abstract

Purpose

The purpose of this paper is to test whether underpricing can serve as a signal of quality in a financing-investment environment and to compare it under the two institutions for financing offers that are commonly observed in corporate financial markets: take-it-or-leave-it offer (TLO) and the competitive bidding offer (CBO).

Design/methodology/approach

The research paper uses experimental economics methodology and laboratory experiments to investigate the research question.

Findings

The results suggest that underpricing can serve as a signal of quality but not sustainable as a repeat strategy. Over time, the high-quality firms converge to a pooling strategy rather than bearing the cost of signaling. Additionally, underpricing is lower under CBO than under TLO institution due to competitive bidding. Signaling under CBO institution may be less salient due to possible mimicking by the low-quality firms.

Originality/value

This paper presents a first experimental investigation of the underpricing-signaling hypothesis in a financing-investment environment under asymmetric information. The choice of institution in a financing environment produces qualitatively and strategically different behavior among firms and investors.

Details

Review of Behavioral Finance, vol. 11 no. 2
Type: Research Article
ISSN: 1940-5979

Keywords

Article
Publication date: 24 August 2010

Khaldoon Nusair, Hae Jin Yoon, Sandra Naipaul and H.G. Parsa

The purpose of this study is to investigate the effects of price discount frames and price discount levels on consumer perceptions about the quality of the service product, the…

7308

Abstract

Purpose

The purpose of this study is to investigate the effects of price discount frames and price discount levels on consumer perceptions about the quality of the service product, the value of the discount, their purchase intentions and their willingness to spread the word of mouth about the discount savings across different types of services.

Design/methodology/approach

The study uses an experiment design method using three interesting variables: discount format, discount level and service industry type. The experiment included four different types of low‐end price service levels: restaurants, hotels, mailing services, and retail services.

Findings

The findings indicate that price discount frames and discount levels do affect consumers' perceptions on the value of the discount, the quality of the service, their intention to purchase and their willingness to engage in WOM advertising.

Practical implications

The practical implication for service firms that want to use price discount promotions to encourage sales and increase revenue is that they should carefully consider the price range and the value or quality of image they intend to signal when using these different price discount frames and the service they are selling to determine the discount level to use.

Originality/value

This paper is valuable to low‐end service marketers that seek to use price discount promotions to encourage sales and increase revenue.

Details

International Journal of Contemporary Hospitality Management, vol. 22 no. 6
Type: Research Article
ISSN: 0959-6119

Keywords

Article
Publication date: 2 June 2010

Lisa K. Scheer, Omar Shehryar and Charles M. Wood

This research aims to study how buyers' budget constraints influence buyers' perceptions of discounts presented in a dollars‐off versus percentage‐off format. A comparison of…

1919

Abstract

Purpose

This research aims to study how buyers' budget constraints influence buyers' perceptions of discounts presented in a dollars‐off versus percentage‐off format. A comparison of perceptions of discount format under budget constraints is missing from the past literature. The current research aims to fill this gap.

Design/methodology/approach

The research is based on two experiments. In the first experiment, a study by Kahneman and Tversky is replicated and extended by including budget constraints. In the second experiment participants are given either a high or a low budget and then asked to compare objectively equivalent discounts that are presented in either dollars‐off or percentoff terms. Participants' willingness to buy is recorded and used to gauge the efficacy of the discount formats under budget constraints.

Findings

The research extends previous findings derived from the psychophysics of pricing. It demonstrates that, although it is believed that the attractiveness of an absolute discount is inversely proportional to the objective price, such evaluations are also influenced by the presence of budget information. Specifically, consumer budget interacts with discount formats such that the $‐off versus percentoff discounts may not be appropriate for expensive or inexpensive products respectively, as shown in past research. Instead, the value of the discount in proportion to the available budget may play a significant role in deal evaluation. Therefore it is an important issue retailers should consider when deciding what discount presentation format to use.

Originality/value

Although past research views price as a constraint, the findings indicate that price in itself may not be a constraint unless viewed within the context of a budget. Consumers implicitly make this comparison, but past research has not specifically tested for the effects of budgets and, instead, has relied on income as a proxy for a consumer's spending power. The results provide evidence that using income instead of budget may be an oversimplification.

Details

Journal of Product & Brand Management, vol. 19 no. 3
Type: Research Article
ISSN: 1061-0421

Keywords

Article
Publication date: 1 April 1997

Beng Soo Ong, Foo Nin Ho and Carolyn Tripp

Presents an account of a study which examined consumer perceptions of bonus pack offers. A bonus pack is a manufacturer’s sales promotion technique of giving the buyer an extra…

3616

Abstract

Presents an account of a study which examined consumer perceptions of bonus pack offers. A bonus pack is a manufacturer’s sales promotion technique of giving the buyer an extra quantity of a product at the usual price (e.g. an extra 6 oz free; buy four, get one free). No scholarly research on bonus packs was uncovered by the literature review. Hence, this study represents, perhaps, one of the earliest scholarly works on bonus packs. The research tested two offers of Vaseline Intensive Care skin lotion (one offer was of 80 percent, the other of 60 percent more free). Consumer responses ‐ their belief in the offers (quantities and prices claimed), their perceptions of the manufacturer and of the value of the deal, and their purchase intentions ‐ were measured.The measures were further analyzed by types of user (light versus heavy) and buyer (regular versus infrequent). Discusses managerial implications of the findings. For example, one finding was that bonus pack promotions lack credence. Offers suggestions on how to boost the credibility of bonus packs.

Details

Journal of Consumer Marketing, vol. 14 no. 2
Type: Research Article
ISSN: 0736-3761

Keywords

Article
Publication date: 26 September 2011

Karyn L. Neuhauser, Wallace N. Davidson and John L. Glascock

This study seeks to analyze the differences between merger cancellations and three types of takeover failures: failures that are associated with targeted share repurchases…

2737

Abstract

Purpose

This study seeks to analyze the differences between merger cancellations and three types of takeover failures: failures that are associated with targeted share repurchases (greenmail), failures in which the sole bidder simply withdraws the offer, and failures that are accompanied by a general share repurchase (buyback).

Design/methodology/approach

The paper uses event study methods and regression analysis.

Findings

The paper observes negative target stock price reactions around all types of takeover failures and merger cancellations. However, the cumulative effect of takeover attempts is positive, suggesting that even unsuccessful tender offers generate permanent gains to target firm shareholders, while the cumulative effect of canceled mergers is negative. Furthermore, the market reaction to greenmail‐induced takeover failure announcements is no worse than that of voluntary withdrawals, suggesting that greenmail may play an efficient role in mitigating the effects of takeover bid withdrawals. Finally, while bidder wealth is destroyed in takeover failures, the effect of merger cancellations on bidders is considerably more devastating.

Originality/value

The paper provides evidence of negative stock price reactions to all forms of merger failure. The paper also shows that the cumulative effect of all types of takeover failures is still positive: suggesting that being put into play is still beneficial overall but that canceled mergers destroy value for both targets and bidders. The paper shows that the market reaction to greenmail‐induced failure announcements is no worse than other forms of failure. Finally, while there is an immediate downturn in target prices around a failure, the negative outcome is more severe for the bidders. Thus, the market sees that there was something useful about the anticipated change in corporate control, which was lost when it failed to be completed.

Details

International Journal of Managerial Finance, vol. 7 no. 4
Type: Research Article
ISSN: 1743-9132

Keywords

Article
Publication date: 27 June 2008

Elizabeth Webb

The purpose of this paper is to examine the relationship between the extent of stock repurchase and measures of corporate governance.

2590

Abstract

Purpose

The purpose of this paper is to examine the relationship between the extent of stock repurchase and measures of corporate governance.

Design/methodology/approach

Using a sample of stock repurchase announcements by banks after the 2002 tax reform, the paper uses an event study methodology to confirm the positive market response to stock repurchase announcements. A regression analysis is then used to study the determinants of the abnormal response to the bank stock repurchases. Regression analysis is also used to analyze whether corporate governance variables are significant determinants of bank extent of stock repurchases and size.

Findings

Corporate governance techniques have little impact on market response to bank stock announcements, but are related to some extent to manager decisions regarding the stock repurchase. Board structure and executive/director stock ownership do not influence the market's response to repurchases. However, in some cases board structure is positively related to management's decision regarding the extent and size of the repurchase offer. Proportion of insider equity holdings has less influence on stock repurchase characteristics.

Practical implications

Board structure may have a more important role to play in the banking industry in regards to managerial decision‐making than equity ownership. Equity ownership in banks tends to be driven by bank size and therefore may have less of an impact on reducing agency problems within the banking industry.

Originality/value

The sample is taken after the 2002 tax reform, which provides an analysis of repurchases without tax effect implications. This is the first paper to study the contribution of board structure and equity ownership to stock repurchases in publicly‐traded banks.

Details

International Journal of Managerial Finance, vol. 4 no. 3
Type: Research Article
ISSN: 1743-9132

Keywords

Article
Publication date: 14 March 2008

Peter Curwen

This article is the eighth in a series that seeks to analyize the constantly changing structure of the TMT sector. It aims to cover the period 25 March 2006 to 24 March 2007.

Abstract

Purpose

This article is the eighth in a series that seeks to analyize the constantly changing structure of the TMT sector. It aims to cover the period 25 March 2006 to 24 March 2007.

Design/methodology/approach

The article is designed so as to contain at its core the creation of a series of databases in tabular form that can be used to analyze structural trends over a period of many years.

Findings

The article finds that, prior to March 2002, the TMT sector spent two years in the doldrums, and the overall trend continued to be broadly negative during the ensuing year, partly driven by the implosions at the likes of WorldCom. The following two years saw companies coming to terms with a radically different environment. The year commencing March 2005 witnessed a sharp upsurge in restructuring activity somewhat reminiscent of the late 1990s and this continued unabated throughout 2006 and the first half of 2007.

Originality/value

Empirical research based upon current data is very scarce in the public domain. This series of articles makes a major contribution to the analysis of how and why the structure of the TMT sector is evolving.

Details

info, vol. 10 no. 2
Type: Research Article
ISSN: 1463-6697

Keywords

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