Although marketers increasingly rely on customer data, firms have little insight into the ramifications of such data use and do not know how to prevent negative effects. Data management efforts may heighten customers' vulnerability worries or create real vulnerability. Using a conceptual framework grounded in gossip theory, the authors link customer vulnerability to negative performance effects. Three studies show that transparency and control in firms' data management practices can suppress the negative effects of customer data vulnerability. Experimental manipulations reveal that mere access to personal data inflates feelings of violation and reduces trust. An event study of data security breaches affecting 414 public companies also confirms negative effects, as well as spillover vulnerabilities from rival firms' breaches, on firm performance. Severity of the breach hurts the focal firm but helps the rival firm, which provides some insight into mixed findings in prior research. Finally, a field study with actual customers of 15 companies across three industries demonstrates consistent effects across four types of customer data vulnerability and confirms that violation and trust mediate the effects of data vulnerabilities on outcomes.

Online chatter is important because it is spontaneous, passionate, information rich, granular, and live. Thus, it can forewarn and be diagnostic about potential problems with automobile models, known as nameplates. The authors define perverse halo (or negative spillover) as the phenomenon whereby negative chatter about one nameplate increases negative chatter for another nameplate. The authors test the existence of such perverse halo for 48 nameplates from 4 different brands during a series of automobile recalls. The analysis is by individual and panel Vector AutoRegressive models.Perverse halo is extensive. It occurs for nameplates within the same brand across segments and across brands within segments. It is strongest between brands of the same country.Perverse halo is asymmetric, being stronger from a dominant brand to a less dominant brand than vice versa. Apology advertising about recalls has harmful effects on both the recalled brand and its rivals. Further, these halo effects impact downstream performance metrics such as sales and stock market performance. Online chatter amplifies the negative effect of recalls on downstream sales by about 4.5 times.Autoregressive Models; Panel Vector Autoregressive Models; Dynamic Response

Online virality has attracted the attention of academics and marketers who want to identify the characteristics of online content that promote sharing. This article adds to this body of research by examining the phenomenon of improvised marketing interventions (IMIs)—social media actions that are composed and executed in real time proximal to an external event. Using the concept of quick wit, and theorizing that the effect of IMIs is furthered by humor and timeliness or unanticipation, the authors find evidence of these effects on both virality and firm value across five multimethod studies, including quasiexperiments, experiments, and archival data analysis. These findings point to the potential of IMIs in social media and to the features that firms should proactively focus on managing in order to reap the observed online sharing and firm value benefits.

F irms constantly grapple with the question of whether to make, buy, or ally for innovations. The literature has not, to our knowledge, analyzed the choice of and payoff from these alternate routes to innovation for the same firm. To address this issue, we collect, code, and analyze the choice of and payoff from 3,522 announcements of make, buy, and ally for 192 firms across 108 industries over five years. We find that announcements to make or ally generate positive and higher payoffs than announcements to buy, which generate negative payoffs. Nevertheless, firms continue to buy for two reasons. First, firms seem to have no memory of the payoff from buy, even though they have a memory of the payoff from make. Second, firms tend to buy when they lack commercializations, even though this strategy does not always seem to pay off. These results suggest that firms see buy as a signal to investors that they have a solution for what may be a deep strategic problem. Nevertheless, the negative returns to a buy can be mitigated if the acquirer is experienced, and the target is related and offers high customer benefit. We offer explanations for and implications of the results.

Research summary: Scholars have actively researched the initial public offering (IPO) underpricing phenomenon as it relates to the issuing firm's resource acquisition and entrepreneur's wealth retention. In this study, we attempt to replicate three studies that examine how top management and board‐level characteristics impact IPO underpricing using signaling theory. Focusing on a different time period and using a new sample of 234 U.S. IPO firms, we do not find evidence for the signaling effects of top management, governance structure, and social ties on resource acquisition and wealth retention during the IPO process. We propose possible theoretical and empirical reasons for our results and discuss two major external changes that researchers should account in future research. Managerial summary: Past studies on initial public offering (IPO) underpricing have systematically documented the effectiveness of signals (i.e., having seasoned CEO and top management team, director independence, and director network) that influence the amount of money entrepreneurs “leave on the table” during the IPO process. Since these studies were conducted before the ongoing information revolution, we re‐examined the effectiveness of these signals in the current IPO market. Despite using similar methodological approaches that past studies used, we do not find evidence supporting the prior findings. To explain our findings, we discuss two notable recent changes—unprecedented access to information and a regulatory change—that future researchers should examine in the context of IPO underpricing research. Copyright © 2016 John Wiley & Sons, Ltd