Research Newsletter

"Sold to the Bidder Online!" by Scott Fay, assistant professor of finance

The Internet has made online auction sites somewhat ubiquitous—and has facilitated the rise of name-your-own-price (NYOP) auctions, a few of which are quite popular and profitable. With NYOP auctions, as most prominently exemplified by Priceline, consumers bid on products or services without knowing the threshold price. If their bid exceeds the concealed threshold price, they receive the product at the amount they’ve bid.

"Skin in the Game" by David Weinbaum, associate professor of finance

Conflicts of interest in mutual funds between managers, fund sponsors, and shareholders are, in some ways, the nature of the beast given that mutual fund managers benefit from high-paying risky investments while sponsors and shareholders tend to benefit from lower risk investments.

"Whitman Research Spotlight"

Ning Nan and Donald E. Harter, “Impact of Budget and Schedule Pressure on Software Development Cycle Time and Effort,” (forthcoming) IEEE Transactions on Software Engineering.

Previous software engineering research has implied a nonlinear impact of schedule pressure on software development outcomes. Borrowing insights from organizational studies, the authors formalize the effects of budget and schedule pressure on software cycle time and effort as U-shaped functions. The authors found that controlling for software process, size, complexity, and conformance quality, budget pressure, a less researched construct, has significant U-shaped relationships with development cycle time and development effort. Sschedule pressure did not display significant nonlinear impact on development outcomes.

Alexander McKelvie, J. Michael Haynie, and Veronica Gustavsson, “Unpacking the Uncertainty Construct: Implications for Entrepreneurial Action,” (forthcoming) Journal of Business Venturing.

The study focus on the primary decision-maker’s willingness to exploit a given opportunity in the face of varying combinations and manifestations of uncertainty and find that the type of uncertainty experienced influences the willingness to engage in entrepreneurial action differently. Further, the authors find that differences in how each type of uncertainty is manifested in the environment, the scale of exploitation (i.e. large vs. small), and the entrepreneur’s expertise serve to moderate the relationship between uncertainty and action in counter-intuitive ways.

This paper focuses on the defaultable lease rate term structure with endogenous default. The authors combine the competitive lease market argument proposed by Grenadier (1996) and the endogenous default structural model proposed by Leland and Toft (1996) to examine the interaction between the lessee’s capital structure and the equilibrium lease rate. Under this framework, determining the lease rate is a simultaneous equation problem that captures the tradeo® between debt and lease financing. Using data on 2,482 real estate lease transactions, the authors empirically confirm the predictions derived from the numerical analysis of the model.

Corinne A. Coen and Catherine A. Maritan, “Investing in Capabilities: The Dynamics of Resource Allocation,” (forthcoming) Organization Science.

The authors examine the dynamic capability of resource allocation to invest in operational capabilities. Using a computer simulation, they model a process of firms competing in factor markets for opportunities­ to invest in existing capabilities and acquire new ones. The authors find that endowment and search ability both matter and that in many circumstances, the effects of possessing a superior endowment dominate the effects of superior search ability.

Karl Wennberg, Johan Wiklund, Dawn R. DeTienne, and Melissa S. Cardon, “Reconceptualizing Entrepreneurial Exit: Divergent Exit Routes and Their Drivers,” (forthcoming) Journal of Business Venturing.

The authors develop a conceptual model of entrepreneurial exit which includes exit through liquidation and firm sale for both firms in financial distress and firms performing well. This represents four distinct exit routes. In developing the model, they complement the prevailing theoretical framework of exit as a utility-maximizing problem among entrepreneurs with prospect theory and its recent applications in liquidation of investment decisions. The authors found that entrepreneurs exit from both firms in financial distress and firms performing well.

Kristin Byron, Shalini Khazanchi, and Deborah Nazarian, “The Relationship between Stressors and Creativity: A Meta-Analysis Examining Competing Theoretical Models,” (forthcoming) Journal of Applied Psychology.

Competing theoretical models and equivocal evidence leave unanswered questions regarding stressors’ effect on creativity. The present meta-analysis of 76 experimental studies (including 82 independent samples) aims to clarify stressors’ effect on creativity and identify factors that may explain differences between studies. The authors’ results suggest that the effect of stressors on creative performance depends on how stress-inducing the stressor is and what type of stress is induced. The results suggest that stressors’ effect on creativity is more complex than previously assumed and points to the need for understanding boundary conditions that shed light on inconsistent findings.

Padmal Vitharana, Julie King, and Helena Chapman, “Impact of Internal Open Source Development on Reuse: Participatory Reuse in Action,” (forthcoming) Journal of MIS.

Adoption of Open Source Software (OSS) principles to internal software development has gained considerable momentum. Often labeled as Internal Open Source (IOS), several large firms have started to implement these programs. In this research, the authors focus on how IOS impacts reuse. In employing a qualitative case study, they examine the IOS program at IBM called Community Source. Analyzing data gathered from multiple sources reveals that IOS adoption facilitates participatory reuse by enhancing information sharing and leveraging of broader community skills. Based on data, the authors develop a theoretical model to illustrate how IOS impacts reuse. The model informs managers wishing to foster participatory reuse that they are wise to adopt IOS as a vehicle to promote greater openness of the software development infrastructure for leveraging broader community skills and enhancing information sharing among projects’ stakeholders.