Attitudes toward risk and the risk-return paradox: prospect theory explanations

Article Abstract:

This study attempted to explain Bowman's risk-return paradox in terms of recent research in behavioral decision theory and prospect theory. The research emphasized the role of reference, or target, return levels in analyzing risky choices. For returns below target, a large majority of individuals appear to be risk seeking; for returns above target, a large majority appear to be risk averse. Using extensive COMPUSTAT-based data on U.S. firms, we consistently found a negative risk-return association for firms having returns below target levels and a positive association for firms with returns about target. These results support the basic propositions of prospect theory and are extremely robust within and across industries and for all time periods studied. (Reprinted by permission of the publisher.)

Decision-making, Decision making, Management

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Assessing mobility barriers in dynamic strategic groups analysis

Article Abstract:

The Mobility Barriers Paradigm (Caves and Porter, 1977) has strongly influenced research in strategic management, particularly in the areas of competitive analysis and strategic groups. In this article we develop a procedure called MOBIUS, based on 'match ratios' (MRs), in order to identify those competitive variables which act as mobility barriers in a particular industry. We also attempt to classify mobility barriers in terms of the degree of observed mobility around key strategic variables and the extent to which change is desired on these variables. The MOBIUS procedure is illustrated briefly in the context of the pharmaceutical industry. (Reprinted by permission of the publisher.)

Pharmaceutical preparations, Research, Models, Competition (Economics), Pharmaceutical industry, Strategic planning (Business)

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Strategic time periods and strategic groups research: concepts and an empirical example

Article Abstract:

This article briefly reviews previous research on strategic groups and focuses upon the influence of time on strategic positioning. This stability approach also motivates research into the dynamics of strategic group shifts. An illustrative example drawn from the drug industry emphasizes the practical application of these concepts. The analytically-derived strategic groupings are then compared with evidence drawn from industry and academic research. Finally, following discussion of the results, some suggestions about integrating the strategic group concept into strategic management research are also made. (Reprinted by permission of the publisher.)

Methods, Group work in research, Group research

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