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Passed the qualifying exam! July 16, 2007

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Finally nailed that damn sucker!  It’s about time to move on!

Poor Jen and Funny! Have to be vegetarians for the next three months with me to thank God’s mercy for my passing.

Wondering if Jen will eventually get me the iPhone for celebration….

Taiwan Version of American Idol July 11, 2007

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Watched the whole season of Super Star Avenue from youtube.  It’s a Taiwanese version of American Idol.  I guess singing competition of nomal and regular college kids is going crazy in Asian as well.  People are so crazy about the program and follow so closely with every movement of each competitor.  It’s amazing how much daily media coverage about the show. 

It’s so easy to get addicted with the show and makes people want to follow through with the progress.  I hardly watch any TV program anymore these couple years.  This is the one program that I have to watch religiously every week on youtube since I started watching.  Really enjoy the music a lot.  Hope all these boys continue doing what they love to do and introduce more good music in the future. 

Degree for what? July 6, 2007

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Dr. Ratchford asked me at lunch what do I want to do with my degree?  I told him that I will try to find out if I like teaching.  If so, I will go to the market and find a good school to go.  I do like the part of doing research since that’s when I learn the most.  Publication is the only issue, but everyone has the same problem.  It’s just the nature of the job.

I told him the way I am doing my credit hours is too slow – 30 credit hours in three years.  I need a more efficient and less expensive way to get there.  He said since I already have my master degree.  I only need to finish all the required courses and the seminars.  He doesn’t really know the minimum credit hours to graduate, but he said I might want to take the useful classes since I am paying for it.  Totally agree there….

Never had a degree plan in the past.  Always just taking whatever is offered as I go.  When people ask me how long left to go for school, my answer is always “I don’t know.”  I guess it’s about time to find out after the results of qualifying exam next week…the wait is such a tortue….   

Soul Mate July 4, 2007

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“A soul mate is someone who reflects or matches your energy and your path in life.  A soul mate is someone whose power and potential are complementary to your own.  While dating and light relationships are all about fun and playfulness, soul mates are all about deep emotional support, trust and faith.  When you choose to go deeper with someone, you are opening yourself up.  To love someone and be loved is a deeply spiritual state.”

—Barrie Dolnick

What’s next? June 29, 2007

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At the crossroad again after qualifying exam.  Either past or not.  Feeling kind of lost with what to pursue next.  All these big questions poping up left and right.  Do I really want to become a professor going down the academic road?  Or should I stay in the industry?  What about marriage and kids? 

Angela is having her first baby on Nov.  Julian is turning 2.  Didi is turning 5.   All these kids are growing up so fast.  Most of friends are married with kids.  I am still desparately single.  Still asking the same question that “am I going to get married and have kids someday?” and still no answer…Time keeps flying by and the window keeps shrinking…What should I do next?

The data is such a mess at work.  Between the vendor and IT, couldn’t even get the whole data loaded completely for the longest time.  After Jason moved to the other role, I am sure I will be forced to deal with all these data issues.  Without the cleaned data, I can’t do any of my job at all.  With all the requests pilling up and no data, it’s going to be a diseaster going down the road.  The job is becoming more demanding than in the past.  How long can I hold this job and still go to school at the same time?  Is it time to look for another job?

Completely forgot about Fall tuition coming up, forgot to budget that in before taking the unpaid leave.  Never run so low in my bank account in my whole life.  Hope the next two paychecks will be enough to cover next semester tuition.  Other than my own tuitions, need to start saving for Funny’s master degree tuitions.  I might have to work for another year to build the finanical backup for both of us to get through our education for the next couple years.  Money comes, money goes.  It’s always short…

Financially, I guess I can never be a full time student like everyone else does.  For the stupid PhD degree, another year of laboring myself to death yet to come…!  Damn…they better pass me…I will be so pissed if I fail after all these years….

Back to Work June 26, 2007

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Finally done with the qualifying exam.  Back to work for a week.  So much has changed during my two months absence.  Layoffs, quitting, promotions, new hires, and changing teams and cubes.  All within two months.  Jason is moving to another team on August.  The data is still not uploaded corretly.  Feeling a little shaky on that.  Wondering if I should start sending out resume just in case.  Hope I have enough time to build some backup financially before anything screwing up big time with the project.

Value of Retailing Services June 12, 2007

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–Manufacturers sell a certain good for which consumers have demands

–Retailers sell services in addition to goods.  Retailers sell to final consumers what someone else has made through phsical store or internet.  Retailers exist and operate profitably because they perform a service which their customers value.  The are then compensated through margins by marking-up goods they sell.

According to Bliss (1988), the retailer incurs overhead costs which must be recovered by markups.  The consumers also incur overhead costs in coming to the shop and would incur additional costs if they have to visit more than one shop.  An obvious condition of equilibrium is that all shops should offer equally good vlaue for moeny as measured by the indirect utility function common to all consumers.  A shop offering less good value than others would lose customer, while a shop offering an excess of value could raise some prices and increase its profit.  This is the reason why retailers provide various services along with the good that they sell to consumers.

Services provided by retailers include:

  • advertising
  • labor staffing
  • one-stop shopping
  • assortment
  • convenient location…

Most of these services improve information or cut down on search and transaction costs. Ratchford and Stoops (1992) illustrated that marginal contribution of retail advertising and labor as the marginal reduction in the consumer’s acquisition costs.  They key concept is that retail services will be traded off for increased margins up to the point where marginal saving for consumers is equal to marginal increase in the retailer’s margin.

Although manufacturer might also provide advertising to influence consumer preference, the advertising primarily serves to emphasize product differentiation and hance mostly increases the full price paid by consumers.

Retail Formats:

  • Bentancourt and Gautschi (1990): provide a formal analysis of the retail assortment problem by formulating the retail demand as a function of the underlying demand for various activities involved in the household production.  Based on this view, a household pursing a disaggregated consumption activity like dinner on Christmas eve may choose to shop at a specialty store with a greater depth of assortment than at a convenience store.  Thus, different retail formats exist to satisfy varying demand of the underlying consumption activities
  • Messinger and Narasimhan (1997): develop a model to explain the growth of one-stop shopping and suggests that greater prevalence of one-stop shoping has been a response to growing demand for time-saving convenience

Managing Channel Profits (Jeuland & Shugan 1983) June 12, 2007

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Results:

  1. Channel coordination problems occur with all marketing decision variables albeit in different directions.  Without coordination, marketing effort will be smaller than optimum.  This is a generalization of the result concerning margins: without coordination, they will be larger than optimum
  2. Achieving channel coordination can be difficult.  However, several mechanisms do exist for achieving coordination (e.g.  joint ownership, Simple contracts, implicit understand, profit sharing, and quantity discounts)
  3. Many channel phenomena (e.g. integration, contracts) may be implicit coordinating mechanisms
  4. Joint ownership and fixed price contracts are often inadequate mechanisms for coordination
  5. Quantity discounts can provide an optimal means for achieving coordination
  6. Quantity discounts can take the form of other marketing phenomena such as cooperative advertising or added service levels
  7. Quantity discounts are a method of profit sharing
  8. The channel coordination can be separated from the profit division issue.  Although, they are related decisions.
  9. A coordinated channel will make R&M’s margins appear to be too low
  10. Coordination, once achieved, will lead to lower margins, higher levels of marketing effort, lower retail prices and larger total channel profits

Signaling and Screening June 12, 2007

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Two types of information asymmetry:

  1. Hidden action (imperfect information) – Principal tries to induce the agent to take the single appropriate action
  2. Hidden type (incomplete information) – Principal tries to induce the agent to take the action that will reveal his type

Moral Hazard (in the context of hidden actions):

–A form of post-contractual opportunism that arises because actions that have efficiency consequences are not freely observable and so the person taking them may chose to pursue his or her private interests at other’s expenses

Adverse Selection (in the context of hidden types):

–Asymetric information about the pre-contractual information relevant to the transaction between the principal and agent

–The tendency of those in dangerous jobs or high risk lifestyles to get life insurance or seller has information about product quality but buyers don’t

Solutions to asymmetry information:

  1. Hidden actions: The principal develops incentive contracts (Mechanism)
  2. Hidden types: the informed party can use signaling while the uninformed party can use screening

Signaling: Agent conveys some meaningful information about himself to principal (signal before principal offers a contract)

Screening: Principal moves first or suggest a contract and learn agent’s type through his behavior (signal after a contract)

Examples:

  1. Manufacturer – Retailer: A manufacturer charges higher price or advertise more to convince that his product is in high quality (signaling).  A retailer asks “slotting allowance” to find the type of the product – high/low demand (screening)
  2. Used Car Trade: Seller proposed warranty/build reputation (signaling).  Buyer do a mechanic check on the car (screening)
  3. Education in the labor market: Employee obtains education to show that he is high performance type (signaling).  Employer chooses only graduate students expecting higher performance (screening)

Optimal Search Strategy June 12, 2007

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Choice                    A                          B

Probability      0.1      0.9           0.3       0.7

Payoff             $100    $0            $6        $4

Cost                        $5                         $2

The expected payoffs of the two alternatives, without search, are

A: -5+100*0.1+0*0.9 = 5

B: -2+6*0.3+4*0.7=2.6

Supposed we search B first and the A second:

If we see payoff $6 first, then the payoff is -5+(100*0.1+6*0.9)=10.4

If we see payoff $4 first, then the payoff is -5+(100*0.1+4*0.9)=8.6

The expected payoff of this sequential search is

-2+{[-5+(100*0.1+6*0.9)]*0.3+[-5+(100*0.1+4*0.9)]*0.7} =7.14

Suppose we search A first and then B second:

If we see payoff $100 first, then the payoff must be $100 since it is the highest it can get

If we see payoff $0 first, then the payoff is -2+(6*0.3+4*0.7)=2.6

The expected payoff of this sequential search is

-5{100*0.1+[-2+(6*0.3+4*0.7)]*09]=7.34

Apparently, consumer should search A first and then B second.  The expected payoff of this sequential search is the highest.