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Significance of pricing and product-line strategies

In new research, Ramnath Chellappa, associate professor of information systems & operations management, and coauthor Amit Mehra (U Texas) investigate the business practice of IT “versioning,” whereby a company creates different models of a product in order to charge varying prices for each one. Much research takes into account economies of scale and a company’s marginal costs—the price of making an additional unit of a product. However, Chellappa and Mehra note that companies also need to consider consumer usage costs when they decide to create various versions of the same IT product. But for IT products and services, the “costs” are not monetary. The pair note the “time commitment and physical effort” to use IT products or services. They use the example of mobile devices: “One cannot enjoy these information goods without them consuming resources such as memory and processing power.” They determine that “this consumption-related disutility” is critical to feature bundling and consumer segmentation. The researchers create a model to test the consumer cost impact, using a “digital goods firm with a unique production cost structure and agents—consumers who face resource constraints in consuming these goods.” Given the usage costs, they determine that individuals may not necessarily prefer products with more features to lower-quality items. The pair concludes “marginal cost and consumers’ usage costs have the same impact on versioning strategy.” Source:

The role of behavior in managing mergers

Despite corporate interest in M&As as a growth strategy, research indicates that financial returns on such deals often fall short of expectations. Corporate leaders spend considerable time looking at the financial and quantitative aspects of mergers and acquisitions; however, Sandy Jap, Sarah Beth Brown Professor of Marketing; A. Noel Gould (Texas State U); and Annie H. Liu (Texas State U) argue that factoring in people should also be a major consideration when it comes to a proposed deal. Their research indicates that better employee and customer management is especially critical to an organization’s M&A strategy and implementation success. The trio analyzed ANZ New Zealand’s horizontal merger with the National Bank of New Zealand to better understand the impact of employee and customer behavior on the deal. They contend that this brand and technology merger succeeded due to ANZ’s commitment to ensuring customer satisfaction and addressing employee concerns about the merger. ANZ New Zealand also focused on business efficiencies and rebranding efforts. Jap, Gould, and Liu note that collaboration became a big key to the success of the merger with ANZ’s financial, IT, marketing, and communications personnel working closely together to retain customers. Source:

Dubious loan origination and the housing collapse

Gonzalo Maturana, assistant professor of finance, and coauthor John M. Griffin (U of Texas) argue that securitization was not the only factor in the recent housing crisis. Their new research indicates that questionable mortgage origination practices played a significant role in the distortions in the 2003 to 2012 real estate boom and bust. Specifically, the underreporting of the true risk profiles of borrowers, including the misreporting of second-liens, helped to drive housing demand and, ultimately, contributed to the crisis. They note, “The process of underreporting key loan attributes can have the by-product of facilitating credit to borrowers who have little ability to repay.” The researchers tested their theory by using county deed records, securitized loan information, house price statistics, and home loan application data from a number of reliable sources to detail the 2003 to 2006 run-up of housing prices and its subsequent 2007 to 2012 collapse. After controlling for securitization, they determined that “originator malfeasance” in certain areas also served to raise the credit supply. Maturana and Griffin concluded that dubious originator practices helped to cause house prices in certain zip codes to increase relative to other areas and eventually led to larger price crashes. Source:

Misreporting in securitized loans

Nonagency mortgage-backed securities (MBSs) and collateralized debt obligations (CDOs) derived from MBSs and their role in the recent financial and housing crisis remain a subject of discussion. An MBS is an asset-backed security secured by a mortgage or grouping of mortgages. Non-agency MBSs are not guaranteed by any government-sponsored organization, such as Freddie Mac or Fannie Mae, or the federal government. According to research from Gonzalo Maturana, assistant professor of finance, and John Griffin (U of Texas), the complexity of these structured products made it difficult to learn the true value of the underlying assets. They analyzed “apparent fraud among securitized nonagency loans, looking at unreported second liens, owner occupancy misreporting, and appraisal overstatements.” The study data comes from Lewtan’s ABSNet Loan and HomeVal data sets, along with DataQuick’s Assessor and History files, for the time period between January 2002 and December 2011. The researchers discovered that “48% of loans exhibited at least one indicator of misrepresentation.” The level of misreporting was similar for low- and full-documentation loans. Also, loans with a misreporting were 51% more likely to be delinquent. Maturana and Griffin’s research points to apparent fraud by loan originators and MBS underwriters, and it also suggest that MBS underwriting banks were aware of some of the MBS representations at issuance. Source:

Relational signaling and gift giving

Prior research indicates that gift givers are motivated by competing goals. Often, they will simply select an item of the recipient’s choosing. However, gift givers are also likely to select an item on their own to help show knowledge of the recipient and further define and maintain a personal connection. Morgan Ward, assistant professor of marketing, and coauthor Susan Broniarczyk (U Texas) take the research a step further by analyzing how the closeness of a relationship further impacts the gift-giving decision when a gift registry is readily available. The duo employed five separate studies with human subjects presented with various gift-giving scenarios. The paper notes, “We find that despite their stated primary intention to please recipients, close (vs. distant) givers ultimately are more likely to ignore recipients’ explicit registry preferences in favor of freely chosen gifts.” Ward and Broniarczyk conclude that divergence from the registry was not necessarily about finding a better gift. Instead, it occurred only when givers specifically received attribution for their selection. The closeness of the personal connection resulted in a “perceptual distortion of the gift options in favor of relational-signaling gifts.” Distant givers were much more likely to pick an item from the registry, selecting gifts closely aligned with recipients’ preferences. Source:

Independence Day: Baylor’s Benjamin Franklin Scholars Bring Light to Complex Figure

Founding Father Benjamin Franklin was a complex man. Among his many roles, he was a businessman, entrepreneur, inventor, journalist, author, printer, editor, politician, postmaster, statesman, ambassador and signer of the Declaration of Independence. And even with a treasure trove of accomplishments, sometimes the Franklin legends are bigger than Franklin the man – and it’s taken an army of historians and scholars throughout the centuries to sort it out. As July 4 Independence Day approaches, Baylor University's two Franklin scholars share different perspectives of Franklin, his faith and his business acumen: • Thomas Kidd, Ph.D., Distinguished Professor of History and associate director of Baylor’s Institute for Studies of Religion • Blaine McCormick, Ph.D., associate professor and chair of the management department in Baylor’s Hankamer School of Business Both have penned Franklin books and both have been featured nationally for their research on the Founding Father. Kidd’s 2017 book, “Benjamin Franklin: The Religious Life of a Founding Father,” has received high marks for its analysis of Franklin’s beliefs. From his Puritan upbringing to deism, skepticism and more, the book explores the influences and evolution of faith throughout Franklin’s life. “In today’s polarized political and religious environment, some pundits seek to remake the Founding Fathers in their own image. Benjamin Franklin’s example reveals that the historical truth is often more complicated,” Kidd wrote in a column for The Wall Street Journal. McCormick, who wrote “Ben Franklin: America’s Original Entrepreneur,” discovered a passion to study the Founding Father after listening to an audiobook of Franklin’s autobiography. “Franklin could do things as a statesman, and understand things, and achieve things as a statesman, because he had achieved things in the marketplace first,” he said. “I’ve yet to find a better book for businesspeople to learn about how to run a business in the American Experiment. He wrote the autobiography to help train people in the life of business. Many of the principles are still very robust.” And the way he shared those principles (many of which have been misquoted and made into memes through the decades) is important, McCormick said. “Franklin used sentences no longer than a Tweet to train generations of colonial businesspeople,” he said. “They were short. They were memorable. They were high-impact.” Source:

Baylor Gerontology Expert: It's Important for People to Know the Signs of Elder Abuse

Gerontology expert James Ellor, Ph.D., M.Div., professor in Baylor University’s Diana R. Garland School of Social Work, said it's important to remind people what elder abuse looks like and how they can respond if they see the signs. Reports of abuse are most often submitted by family members, hospital staff and law enforcement. But churches and other organizations should also be diligent, Ellor said, adding that clergy are considered mandatory reporters in many states. “No one group of caring persons can solve this problem alone; it takes a community of caring lay and professional leaders to even try to start to make a difference,” Ellor said. Elder abuse – intentional or negligent acts by a caregiver or trusted individual – comes in many forms: * neglect or isolation * physical abuse, sexual abuse * exploitation or financial abuse * emotional and psychological abuse * verbal abuse and threats “If signs are noticeable, the next steps will depend on the type of abuse. In most cases, counseling support is critical, but often the need for medical help or legal help is also very important,” Ellor said. Read the linked article to learn more. ... Dr. Ellor works with older adults around issues of mental and spiritual health. He has served on the executive committee of the Midwestern Geriatric Education Center and provided education, counseling and planning for individuals and groups who work with seniors. His research includes work in entrostomal therapy, hunger, the church as service provider, spiritual assessment and intervention techniques with cognitively impaired older adults. Source:

Baylor Adoption Expert Says Birth Mothers Need Increased Support During, Following Adoption Process

Dr. Elissa Madden's latest social work research centers on the experience of birth mothers who decide to place their children for adoption. Madden and her research team found that time impacts the level of satisfaction (or lack thereof) these women feel regarding their decision -- and that impact isn't always positive. While many birth mothers reported satisfaction with their decision, the newest findings show that the more time that has passed since the birth mothers placed their child, the less overall satisfaction some birth mothers felt. Some prior research suggests birth mothers’ grief and adjustment attenuates with the passage of time. However, the researchers note “the findings of this analysis highlight the importance of not confusing birth mother’s satisfaction with her decision and the feelings of loss that she may feel about the placement.” A birth mother may feel she made the right decision regarding placement and yet still experience ongoing feelings of loss and grief even years later, Madden said. Madden's multiple studies of birth mothers' experiences have shown that there's a need for more resources for these women. “Adoption professionals must be especially attuned to the needs and concerns of expectant mothers who seek their counsel, as many lack a full understanding of their options,” Madden said. Madden and her team suggest: • Annual “grief and loss” training for adoption professionals • State and federal policies ensuring birth mothers have access to ongoing post-relinquishment support services • Free grief support groups for all birth mothers • Adoption of national standards to ensure that expectant mothers and prospective adoptive parents receive standardized information detailing the benefits of ongoing post-adoption contact • Stipends for expectant mothers to hire independent legal counsel to represent the mothers at the relinquishment and during sensitive discussion regarding post-adoption contact Elissa Madden, Ph.D., associate professor, joined the Diana R. Garland School of Social Work in August 2016. Her primary research interest is in child welfare, with a particular focus on ways to promote permanency for children in foster care. Dr. Madden is a former child welfare conservatorship worker with Child Protective Services in Texas. She is a licensed social worker and has extensive experience working with children & families. Source:

Make America Safe Again

Dear President Trump, In response to the numerous school shootings, Please re-consider your agenda and work to make the educational system safe for our children. Consider allocating funding to allow for the following: *The placement of police sub-stations in middle and high schools that are in at-risk neighborhoods and studying the effect of police presence on the culture of safety. *The creation of school-based mental health clinics run by nurse practitioners and social workers. This will allow at risk and troubled youth to have immediate access to interventions and services. *The ability for community-based researchers to work pro-actively with schools to creatively solve the issue at the local level. Pass federal legislation addressing the minor consent to treat laws for mental health issues. In Washington State, where I live and practice, minors over the age of 13 can consent to mental health treatment without parental consent. The goal isn’t to take the healthcare decision making authority away from parents, the goal is to get youth the help they need before something tragic happens. Appoint a special task force or committee consisting of educators, healthcare providers, lawyers, social workers, and anyone else who directly works with at risk youth. I believe that the solutions will come from these committees. Submitted to POTUS May 19, 2018 Source:

Talking to Kids about Tragedies (Such as Shootings and Terror Attacks) in the News

News of yet another #schoolshooting reminds us of the vulnerability all children face. Even if not directly involved, children may be affected by the media coverage. The resources here can provide guidance: https://www.schoolcrisiscenter.org/resources/talking-kids-about-tragedies/ Source: