Barry Scholnick’s research while affiliated with University of Alberta and other places

Manufacturers' attempts to signal quality via longer warranties can have unintended effects on independent retailers' behaviour in categories where extended service contracts (ESCs) are offered. The results of this research indicate that independent retailers are likely to promote brands with shorter rather than longer manufacturer warranties to maximise the likelihood of selling an ESC as an option. This research provides an explanation as to why manufacturers find it difficult to use warranty length as a signal of product quality. This research is based on a field study of brand shares of household appliances and consumer electronics by a major retailer over a ten-year period. The results have important implications for manufacturer and retailer marketing strategies.

Add ons are features or services that can enhance the functionality or quality of base goods. They are pervasive. Yet we know little about the behavior of add‐on prices over the business cycle. We use 10 years of data from a nationwide Canadian retailer to investigate the local cyclicality of extended warranty prices, a classic add on. We find base prices are acyclical. Warranty prices are procyclical because local stores use warranties to make demand for durable goods less price‐elastic. We show add ons amplify responses to national business cycles and study the implications for inflation rate bias.

We examine whether relative income differences among peers can generate financial distress. Using lottery winnings as plausibly exogenous variations in the relative income of peers, we find that the dollar magnitude of a lottery win of one neighbor increases subsequent borrowing and bankruptcies among other neighbors. We also examine which factors may mitigate lenders’ bankruptcy risk in these neighborhoods. We show that bankruptcy filers obtain more secured, but not unsecured, debt, and lenders provide additional credit to low-risk, but not high-risk, debtors. In addition, we find evidence consistent with local lenders taking advantage of soft information to mitigate credit risk. Received October 12, 2016; editorial decision January 15, 2019 by Editor Philip Strahan. Authors have furnished an Internet Appendix, which is available on the Oxford University Press Web site next to the link to the final published paper online.

We examine deals between listed firms and promoters who have been secretly hired to increase their stock prices. This behavior by the secret promoter is illegal (and leads to prosecution) but the actions of the hiring firm are legal. We use data from these prosecutions to analyze the behavior and motivations of the hiring firms. We find that secret promotion leads to an initial increase in the price and trading volume of the firms on the date that the secret promotion started. Subsequently, however, we find that this increase in price is reversed when regulators (e.g. SEC or NASD) take action against these promoters for not disclosing their relationships with the hiring firms. We find that the main motives behind these relationships are to maximize the private benefits of the firm’s managers and owners through pumping the share prices and subsequently dumping their shareholdings.

We hypothesize that face-to-face communication between international business partners is a valuable mechanism for reducing transaction costs, even in contexts where electronic communication is pervasive. Specifically, we examine whether face-to-face interactions (as measured by international business travel) have greater impacts where transaction costs are higher, e.g., where services with greater complexity are outsourced offshore. Matching data from the Survey of International Air Travelers with Bureau of Economic Analysis data on U.S. service outsourcing, we find that international business travel leads to more outsourcing of more complex services. We further provide evidence on the differential role of international business travel by showing that: (i) business travel by managers leads to relatively more outsourcing of more complex services and (ii) business travel by non-diaspora members leads to relatively more outsourcing of more complex services.

Background We examined the association between personal bankruptcy filing and acute myocardial infarction (AMI) rates in Canada. Methods Between 2002 and 2009, aggregate and yearly bankruptcy and AMI rates were estimated for 1,155 forward sortation areas of Canada. Scatter plot and correlations were used to assess the association of the aggregate rates. Cross-lagged structural equation models were used to explore the longitudinal relationship between bankruptcy and AMI after adjustment for socio-economic factors. Results A cross-lagged structural equation model estimated that on average, an increase of 100 in bankruptcy filing count is associated with an increase of 1.5 (p = 0.02) in AMI count in the following year, and an increase of 100 in AMI count is associated with an increase of 7 (p < 0.01) in bankruptcy filing count. Conclusions We found that regions with higher rates of AMI corresponded to those with higher levels of economic and financial stress, as indicated by personal bankruptcy rate, and vice-versa.

Face-to-face communication between international business partners is a valuable mechanism for reducing transaction costs, even in contexts where electronic communication is pervasive. This paper empirically examines whether face-to-face interactions (as measured by international business travel) have greater impacts where transaction costs are higher, e.g. where services with greater complexity are outsourced offshore. Matching data from the Survey of International Air Travelers with Bureau of Economic Analysis data on US service outsourcing, we find that international business travel has a significantly positive impact on service outsourcing, and that this impact is significantly larger for outsourcing more complex services. We further provide more evidence on the role of international business travel by showing that: (a) business travel by managers leads to relatively more outsourcing; (2) business travel by non-diasporas leads to relatively more outsourcing; (3) the role of international business travel remains the same before and after the digital revolution. All these findings are supported by IV estimation where we use leisure travel or terrorism incidents as instruments for business travel.