11 - Myopic Marketing Management

Question 1

Übersetzung
Myopic

Answer 1

kurzsichtig

Question 2

Bedeutung
Myopic management

Answer 2

practice of cutting marketing and research-and-development spending to inflate earnings

Question 3

Bedeutung
Discount rate

Answer 3

Determines appropriate balance between current- and future-term benefits

Question 4

Bedeutung
Principal-Agent Problem

Answer 4

Occurs when one person or entity (agent) is able to make decisions on behalf of, or that impact, another person or entity (principal)

Question 5

Bedeutung
Hidden action model in context of myopic management

Answer 5

Because principal can observe distorted earnings but cannot decompose reported numbers into “true” and “distortion” components, manager can manipulate short-term earnings at expense of future long-term earnings.
Managerial incentives to engage in myopia and manipulate current earnings increase with the importance managers attach to their current-period earnings and current stock price.

Question 6

Bedeutung
Hidden information model

Answer 6

Stock market may try to infer private information managers have based on firm actions (infer quality of firm actions) -> actions serve as tool for manipulation

Question 7

Bedeutung
Signaling (hidden information model)

Answer 7

To inform market about advantageous prospects, firms can send signal about state (by means of investment level or strategy type). Problem if firms with poor prospects mimic behavior of good-type firms (“signal-jamming”).

Question 8

Bedeutung
Lemons problem (hidden information model)

Answer 8

Firms with good prospects might forgo profitable investment opportunity and stay out of market

Question 9

Bedeutung
Information neglect (hidden information model)

Answer 9

If managers have better information than outsiders but cannot credibly reveal their better private information about the firm prospects.
Managers choose suboptimal project stock market believes are in best interest of firm rather than acting on their better private information.

Question 10

Übersetzung
Principal

Answer 10

Vertretener / Auftraggeber / Schuldner

Question 11

Bedeutung
Seasoned equity offerings (SEO)

Answer 11

(also known as secondary equity offering)

New equity issue by an already publicly traded company. They may involve shares sold by existing shareholders (non-dilutive), new shares (dilutive) or both.