319 Morgan Hall, Soldiers Field
Boston, MA 02163
NBER Working Papers and Publications
|October 1998||Love or Money? The Effects of Owner Motivation in the California Wine Industry|
with Fiona M. Scott Morton: w6743
Many industries are characterized by heterogeneous objectives on the part of firm owners. Owners of private firms, in particular, are likely to maximize utility, rather than profits. In this paper, we model and measure motivations of owners in on particular industry, the California wine industry. In both a formal model and an empirical analysis, we examine the implications of these motivations for market behavior. We find evidence that owners with strong non-financial motivations choose higher prices for their wines, controlling for quality; owners with strong profit-maximizing motives choose lower prices for their wines, controlling for quality. We also find that utility-maximizers are more likely to locate at the higher end of the quality spectrum, whereas profit-maximizers are more...
Published: Scott Morton, Fiona M & Podolny, Joel M, 2002. "Love or Money? The Effects of Owner Motivation in the California Wine Industry," Journal of Industrial Economics, Blackwell Publishing, vol. 50(4), pages 431-56, December.