Ability Of Buyers Research Articles

The wisdom of crowd, real option and game theory decisions: can they be used by clubs to improve their investment in football players?

PurposeThe aim of this work is to explain the final negotiated prices for some of the most famous transfers of football players over the last twelve years (2007–2018).Design/methodology/approachThe article analyses different values for forwards taken from the sports website Transfermarkt, developing a statistical model based on personal, performance, risk, environmental and popularity variables. From those values, the article finds an explanation for the final prices paid for 20 superstar players based on a combination of real option valuations, incorporating the players' life cycles and game theory.FindingsThe authors find that in a large percentage (70%) of the analysed cases, the price paid was higher than the intrinsic market value resulting from Transfermarkt, implying the existence of monopolistic rents, paid as “growth options” on prices from different negotiating conditions. On occasions, the final prices also exceed the value of the growth option, calculated under neutral bargaining conditions, highlighting the lack of economic viability of important transfers, leading to financial difficulties for the clubs involved.Originality/valueThe algorithm provides more flexibility and realism than previous proposals, based on the life cycle of football players, introducing the uncertainty and volatility of projections through Monte Carlo simulation, the capacity of clubs to bargain a price at any point of the contract and finally, the buyer's ability to transfer the player if his subsequent performance is not as expected.

ANTITRUST AND INEQUALITY

ANTITRUST AND INEQUALITY

Strategic Supplier Selection's Effects on Buyer Competitive Performance in Matching Domains: Is Supplier Integration Effective at Mediating Relationships?

The purpose of this research is to determine whether strategic supplier selection based on supplier capability in new product development, supplier quality, and supplier cost directly or indirectly improves the buyer's competitive performance capabilities in the matched domains of buyer product innovation, buyer quality, and buyer competitive pricing. The resource-based view of the firm is used to frame the direct effects of strategic supplier selection, arguing that a buyer's ability to select a supplier with resources and expertise in a specified domain should improve the buyer's performance capability in the "matched" domain (but not necessarily in "unmatched" domains). Two supplier integration techniques are considered as potential mediators, assuming indirect pathways. The research hypotheses examine both direct and indirect impacts for each of the matched domains, but do not assume cross-domain interactions. For instance, supplier selection for new product development capability should have an effect on buyer product innovation (in matched domains), but not always on buyer quality capability (unmatched domains). While the direct impacts of strategic supplier selection on buyer performance are supported in each matched domain, the indirect effects via supplier integration are not substantial for the matched domains. Strategic supplier selection is identified as a viable source of competitive advantage in the resource-based view. By contrast, supplier development and supplier partnership do not provide additional performance benefits in a particular domain over and beyond those obtained from strategic supplier selection in that domain; rather, it is the type of the resources selected that determines competitive advantage.

The Microstructure of the U.S. Housing Market: Evidence from Millions of Bargaining Interactions

We study the microstructure of the U.S. housing market using a novel data set comprising housing search and bargaining behavior for millions of interactions between sellers and buyers. We first establish a number of stylized facts, the most prominent being a nearly 50--50 split between houses that sold below final listing price and those that sold above final listing price. Second, we compare observed behavior with predictions from a large theoretical housing literature. Many predictions on the relationship between sales price, time on the market, listing price and atypicality are borne out in the data. However, existing models do not adequately explain the spread of the sales price around the final listing price. Using a modeling strategy that treats listing price changes as revisions of expectations about the sales price, we find sellers under-react to information shocks in estimating the sales price. Last, we find that the bargaining outcomes are influenced by previously undocumented buyers' bid characteristics, e.g., financing contingencies and escalation clauses, that signal a buyer's ability to complete or expedite the transaction. This suggests an important role for buyer bid characteristics, which are not explained by existing theories, in affecting bargaining power and surplus allocation in bilateral bargaining in housing transactions.

Interorganizational information processing and the contingency effects of buyer-incurred uncertainty in a supplier's component development project

Supplier integration into new product development (NPD) necessitates effective information exchange and absorption between a buyer and a supplier. While prior research has emphasized the buyer's ability to manage the supplier's interface, this research takes a supplier perspective and investigates under which circumstances a supplier's interorganizational information processing capability (IIPC) drives the supplier's component development performance. We take a contingency view and theorize that the effect of the supplier's IIPC is either amplified or dampened by three sources of buyer-incurred project uncertainty: a buyer's component novelty, a buyer's engineering change orders (ECOs), and a buyer's knowledge protectiveness. The hypotheses are tested with data collected from 103 supplier component development projects in South Korea. As a result, this study empirically demonstrates the significant effects of a supplier's IIPC in enhancing the supplier's component development performance. In addition, we substantiate that the magnitude of a buyer's ECOs positively amplifies the benefits of the supplier's IIPC, while the buyer's knowledge protectiveness significantly hampers it. Academic and managerial implications are presented, and future research directions are discussed.

SIGNIFICANT FACTORS OF KEY PARAMETERS FOR LOW MEDIUM COST HOUSING DEMAND IN MALAYSIA

Housing is one of the basic needs for human being. In Malaysia, there are most low cost and low medium cost houses being constructed due to high demand which in line with the fourth strategic objective outlined in the 10th Malaysia plan. The total number of population in Malaysia has increased by 0.17% from 17,563,420 in year 1991 to 27,565,821 in year 2010. Owing to this substantial increased, most of the low-income group cannot afford to own a house. The purpose of this paper is to identify key parameters of low-medium cost housing demand in Malaysia through questionnaire survey with local experts within the construction industry. Data acquired from the questionnaire survey is analysed using Mean Rank adopted from the Statically Package for Social Science (SPSS). Also the parameters identified are analysed using frequency analysis to determine the frequency and ranking. As a result, eight parameters for medium cost housing demand have been identified rom this study, namely population, economy, household income, ability of buyers, housing prices, politics, land price, and experts from industries. Ranking from experts has indicated that household income as the most prioritised parameter for lost medium cost housing, which are then subsequently followed by population, economy, house price, land price, ability of buyers, experts from industries and politics respectively.

ANALYSIS OF THE MAIN PROBLEMS OF THE STUDY AND MANAGEMENT MARKET TO PREMISES

They are considered main problems to segmenting market to premises and moving the real estate on him. It is motivated that correlation quality and cost realized object to premises must be balanced with buyer's ability of the consumers on corresponding to segment market. The offered managerial system operation, conducted on the market with real estates.

Strategic resource extraction and substitute development

We analyze a dynamic game between a buyer and a seller of a nonrenewable resource. The seller chooses resource supply; the buyer can pay a fixed cost to invent a perfect substitute for the resource at any time. In closed-loop equilibrium, the buyer adopts the substitute when the resource is exhausted. Investing makes the buyer worse off because it decreases resource supply, destroys his ability to derive surplus from the resource through delaying the investment cost incurrence, and causes a larger share of the resource stock to be sold at his reservation price. From the seller's perspective, the buyer's ability to develop a substitute is equivalent to an already available substitute with a higher marginal cost.

The dark side of buyer–supplier relationships: A social capital perspective

The literature on supply chain management (SCM) has consistently promoted the “bright side” of collaborative buyer–supplier relationships (BSRs). Based on the social capital argument, SCM scholars have investigated how a buyer can gain access to and leverage resources through its collaborative BSRs. Our study extends this research stream by considering the “dark side” of social capital in BSRs. It evaluates how social capital in its cognitive, relational, and structural forms contributes to or impedes value creation within BSRs. Both primary survey measures and secondary objective measures have been used in data analysis. The results show the presence of both the bright side, confirming the existing literature, and the dark side, extending the literature. There is an inverted curvilinear relationship between social capital and performance: Either too little or too much social capital can hurt performance. This study confirms that building social capital in a collaborative BSR positively affects buyer performance, but that if taken to an extreme it can reduce the buyer's ability to be objective and make effective decisions as well as increase the supplier's opportunistic behavior. Our study also examines how a buyer can delay the emergence of the dark side. It opens up new research avenues in the collaborative BSR context and suggests directions for future research and practice.

The Good, the Bad, or the Ugly? An Empirical Investigation of Revoking Behavior on Ebay

This study investigates a crucial aspect of the reputation mechanism design in electronic markets – the ability of buyers and sellers to revoke or mutually withdraw negative feedback and ratings. Based on an analysis of recent changes in eBay’s feedback mechanism design, we find that the two-way reputation system enables certain sellers to behave opportunistically by revoking negative feedbacks they receive. This makes the reputation system less effective in discerning the quality of sellers. We also find that changes in the reputation system have a significant influence on these sellers’ behaviors. After eBay’s ban on revoking, sellers exert more effort to improve the quality of their transactions. Our findings support the moral hazard assumption regarding seller’s strategic behavior. We discuss the implications of the above findings for reputation mechanism design and practice.

Preferred suppliers in auction markets

This article examines agreements between a buyer and one of the suppliers which increase their joint surplus. The provisions of such agreements depend on the buyer's ability to design the rules of the final procurement auction. When the buyer does not have this ability, their joint surplus can be increased by an agreement which grants to the preferred supplier a right of first refusal on the lowest price from the other suppliers. When the buyer has this ability, their joint surplus can be maximized by a revelation game for the cost of the preferred supplier and a reserve price based on that cost.

A Dynamic Model of Privatization with Endogenous Post-Privatization Performance

This paper presents a dynamic model of privatization, driven by improved institutional protection of private property rights and constrained by the buyer's financial constraints. Government ownership is more efficient than private ownership when private property rights are insecure. Improved institutional protection of property rights over time creates the need to privatize. The buyer's financial constraints affect the timing of privatization, causing the firm's post-privatization performance either to improve or to deteriorate in the short run. Financial constraints also have the possibility of inducing an underpricing phenomenon during privatization where the firm is priced below both what the buyer is willing to pay and the buyer's ability to pay. Faster institutional development calls for earlier privatization, but it also has the potential to either create or exacerbate deadweight losses associated with inefficient privatization. A host of empirically testable implications are derived. Copyright , Wiley-Blackwell.

THE IMPORTANCE OF PRIVATE PROPERTY RIGHTS FOR ECONOMIC GROWTH: THE CASE OF RURAL CHINA, 1979-1987

A study examines the importance of private property rights for economic growth, particularly with reference to variation of incomes in rural China between 1979 and 1987. Results suggest that economic growth in rural China between 1979 and 1987 is totally explained by increased efficiency in specifying and enforcing property rights, by its effects on both economic organisation, through division of labour, and on the ability of buyers and sellers to respond to relative price changes, which increases as transaction costs fall.

Understanding MACs: Moral Hazard in Acquisitions

The standard contract that governs friendly mergers contains material adverse change (MAC) and material adverse effect (MAE) clauses; these clauses permit a buyer to costlessly cancel the deal if such a change or effect occurs. In recent years, the application of the traditional standard-like MAC and MAE term has been restricted by a detailed set of exceptions that curtails the buyer's ability to exit. The term today engenders substantial litigation and occupies center stage in the negotiation of merger agreements. This article asks what functions the MAC and MAE term serve, what function the exceptions serve, and why the exceptions have arisen only recently. It answers that the terms encourages the target to make otherwise noncontractable synergy investments that would reduce the likelihood of low value realizations, because the term permits the buyer to exit in the event the proposed corporate combination comes to have a low value. The exceptions to the MAC and MAE term impose exogenous risk on the buyer; the parties cannot affect this risk and the buyer is a relatively superior risk bearer. The exceptions have arisen recently because the changing nature of modern deals makes the materialization of exogenous risk a more serious danger than it had been. The modern MAC and MAE terms thus respond to the threat of moral hazard by both parties in the sometimes lengthy interim between executing a merger agreement and closing it. The article empirically examines actual merger contracts and reports results that are consistent with the analysis.

Understanding MACs: Moral Hazard in Acquisitions

The standard contract that governs friendly mergers contains a material adverse change clause (a MAC) and a material adverse effect clause (a MAE); these clauses permit a buyer costlessly to cancel the deal if such a change or effect occurs. In recent years, the application of the traditional standard-like MAC and MAE term has been restricted by a detailed set of exceptions that curtails the buyer's ability to exit. The term today engenders substantial litigation and occupies center stage in the negotiation of merger agreements. This paper asks what functions the MAC and MAE term serve, what function the exceptions serve and why the exceptions have arisen only recently. It answers that the term encourages the target to make otherwise noncontractable synergy investments that would reduce the likelihood of low value realizations, because the term permits the buyer to exit in the event the proposed corporate combination comes to have a low value. The exceptions to the MAC and MAE term impose exogenous risk on the buyer; the parties cannot affect this risk and the buyer is a relatively superior risk bearer. The exceptions have arisen recently because the changing nature of modern deals make the materialization of exogenous risk a more serious danger than it had been. The modern MAC and MAE term thus responds to the threat of moral hazard by both parties in the sometimes lengthy interim between executing a merger agreement and closing it. The paper's empirical part examines actual merger contracts and reports preliminary results that are consistent with the analysis.

A solution to the hold-up problem involving gradual investment

We consider a setting in which the buyer's ability to hold up a seller's investment is so severe that there is no investment in equilibrium of the static game typically analyzed. We show that there exists an equilibrium of a related dynamic game generating positive investment. The seller makes a sequence of gradually smaller investments, each repaid by the buyer under the threat of losing further seller investment. As modeled frictions converge to zero, the equilibrium outcome converges to the first best. We draw connections between our work and the growing literature on gradualism in public good contribution games and bargaining games.

A Solution to the Hold-Up Problem Involving Gradual Investment

We consider a setting in which the buyer's ability to hold up a seller's investment is so severe that there is no investment in equilibrium of the static game typically analyzed. We show that there exists an equilibrium of a dynamic game generating positive investment. The seller makes a sequence of gradually smaller investments, each repaid by the buyer under the threat of losing further seller investment. As modeled frictions converge to zero, the equilibrium outcome converges to the first best. We draw connections between our work and the growing literature on gradualism in public good contribution games and bargaining games.

Negotiation Outcomes: The Impact of the Initial Offer, Time, Gender, and Team Size

A successful path to purchasing negotiation often hinges on a buyer's ability to gain relative bargaining strength. Unfortunately, the establishment of a strong bargaining position for a buyer is not a simple matter because of the multitude of factors affecting the buyer's negotiation leverage. To help purchasing professionals develop more effective negotiation strategies, this study empirically identifies key factors affecting the bargaining position of purchasing professionals and their subsequent impact on negotiation outcomes.