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April sbr 2004

Strategic Transfer Pricing with Risk Averse Agents
Robert F. Göx/Jens Robert Schöndube
In this paper we analyze strategic transfer pricing with risk- and effort-averse divisional managers. In contrast to earlier literature, we find that the existence of a standard agency problem allows transfer pricing to serve as a commitment device even if the transfer prices are not mutually observable. The reason is that transfer prices are set above marginal cost to solve the agency problem and not for strategic purposes. Therefore, delegating the pricing authority to a risk-averse manager implies that he sets a higher product price than does the risk-neutral owner, because at the divisional level the transfer price represents the relevant unit cost for pricing. We show that the optimal scope of managerial authority generally depends on both the risk premium and the intensity of competition in the product market. We also identify conditions under which the delegation of pricing responsibilities to risk-averse managers constitutes a dominant strategy equilibrium.
pp. 98-118

Assessing the Effectiveness of Sport Sponsorships - An Empirical Examination
Reinhard Grohs/Udo Wagner/Sabine Vsetecka
Recent surveys find that while managers favored issues of media coverage not more than ten years ago, now they rate sponsor awareness and image transfer from the sponsored event to the sponsor as the main reasons for engaging in sport C. However, the evaluation of C has not kept up with this change in priorities. Companies seem to be reluctant to evaluate sponsor awareness even though measurement is straightforward and not very costly. An important reason might be that previous studies showed unsatisfying effects of "ambush marketing". In this form of marketing, other firms make consumers believe, incorrectly, that these companies are the actual sponsors of an event. In the case of image transfer, evaluation seems to be difficult due to a lack of a compelling comprehensive and testable model.

We examine these obstacles of assessing sponsor awareness and image transfer in sport sponsorships in two ways. As a means of reducing the danger of ambush marketing, we analyze what drives correct sponsor identification. Our empirical results indicate that event-sponsor fit, event involvement, and exposure are the dominant factors predicting sponsor recall. These factors offer sponsors a basis for successful sponsorship planning and execution through the selection of an appropriate sponsorship. Second, we propose and empirically test a model that assesses image transfer in sport sponsorships. We find support for a basic level of image transfer for all sponsors. However, more detailed research and interpretation of results suggest that the magnitude of image transfer depends on two factors, sponsorship leverage and event-sponsor fit.
pp. 119-138

Voluntary Disclosure of Partially Verifiable Information
Evelyn Korn
I consider voluntary disclosure of nonproprietary information. Established research presents two classes of models. Some authors assume that the manager can be sanctioned prohibitively high if he lies. Others assume cheap talk.

I analyze a setting with positive but non-prohibitive punishments. In my scenario, misreporting is part of the information equilibrium. To assess the consequences of such misreporting, I present two distinct cases: If the capital market is already well informed about possible firm values prior to the disclosure, the majority of misreportings is detected. If the capital market has only very rough information, misreportings may lead to failures in the market's valuation and thus damage investors.
pp. 139-163

Marketing in New Ventures: Theory and Empirical Evidence
Marc Gruber
Marketing is considered to be of utmost importance for the success of new ventures. Therefore, research on entrepreneurial marketing has increased considerably since the late 1980s. Its findings are varied and vibrant, yet also large and extremely fragmented, and a comprehensive theory of entrepreneurial marketing is still lacking. This situation proves to be a major hurdle for further advances, as the status quo of research cannot be accessed without major efforts. To help researchers and lecturers synthesize the growing body of knowledge, this paper brings together and reviews important research findings in entrepreneurial marketing. Thus, the paper creates a much needed map of the field, making this highly relevant topic readily accessible. Furthermore, the paper provides directions for future research, showing that many key questions of this field (e.g., various strategies and tactics of low-cost marketing) must be explored more thoroughly.
pp. 164-199