Position in Sequence Matters: How Previous Hedonic Experiences May Bias Current Evaluations

Marketing managers often have the responsibility of setting the sequence of hedonistic or indulgent experiences for customers, who evaluate them and give feedback, which is used in developing future events and experiences. Thus, making sure the end user enjoys his experiences is important to achieve the managerial goals of fairness, accuracy and influencing choice. Customers encounter a sequence of choices, say in a restaurant or a bar, and this sequence construction is critical to how the options are judged, given the influence of multiple prior reference points. In their research paper, Tanuka Ghoshal, Assistant Professor of Marketing at the Indian School of Business and her co-authors, use experimental as well as real-world data to posit that there is a benefit to setting a very high-quality first experience, while a strategic positioning of high or poor quality choices in a sequence can impact evaluations of other choices.

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Effect of Derivative Gains/ Losses on CEO Compensation

Firms use derivatives for hedging (reducing risk) and non-hedging purposes (possibly risky investments). These activities have a significant impact on the overall earnings of the firm. Should CEO compensation be based on such derivative gains/ losses? Hariom Manchiraju, Assistant Professor in the Accounting area at the Indian School of Business, and his co-authors examine whether derivative gains and losses affect the compensation of a CEO.

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