Management Science

The existing theoretical literature provides little justification for a corporate debt subsidy. We illustrate the welfare benefit of this subsidy and study how the social costs and benefits change with the duration of industry distress. In our model, two ...

We study a seller’s optimal pricing and inventory strategies when behavioral (nonpecuniary) motives affect consumers’ purchase decisions. In particular, the seller chooses between two pricing strategies, markdown or everyday low price, and determines the ...

The security market line accords with the capital asset pricing model by taking on an upward slope in pessimistic sentiment periods, but is downward sloping during optimistic periods. We hypothesize that this finding obtains because periods of optimism ...

Most existing portfolio choice models ignore the prevalent periodic market closure and the fact that market volatility is significantly higher during trading periods. We find that market closure and the volatility difference across trading and nontrading ...

We empirically examine the asset pricing implications of the Beckerian framework of household production, where utility is derived from both market consumption and home produced goods. We propose residential electricity usage as a real-time proxy for the ...

In this paper, we study the impact of consumer-generated quality information (e.g., consumer reviews) on a firm’s dynamic pricing strategy in the presence of strategic consumers. Such information is useful, not only to the consumers that have not yet ...

Multiple sourcing with quick response has been recognized as a useful tool to manage demand risk for short-life-cycle goods. However, general wisdom has traditionally ignored the effect of these practices on supplier incentives. In this paper we find that,...

Extant theory claims a firm’s information environment impacts the choice between debt and equity financing. However, empirical evidence supporting this contention is limited. We evaluate this relation within the context of Regulation Fair Disclosure (Reg ...

We examine how ex ante financial distress risk affects CEO compensation. To disentangle the joint effects of performance on compensation and distress risk, we focus our analyses on new CEOs. Our results indicate that financial distress risk affects ...

We experimentally investigate a repeated “inspection game” where, in the stage game, an employee can either work or shirk and an employer simultaneously chooses to inspect or not inspect. The unique equilibrium of the stage game is in mixed strategies ...

Although binding reverse auctions have attracted a good deal of interest in the academic literature, in practice, dynamic nonbinding reverse auctions are the norm in procurement. In those, suppliers submit price quotes and can respond to quotes of their ...

We provide a rationale for the recent burst in the amount of collaborative activities among firms selling complementary products, highlighting factors that may result in a lower profitability for such firms overall. To this end, we examine a game-...

We investigate the interplay between learning effects and externalities in the problem of competitive investments with uncertain returns. We examine a game theoretic duopoly investment model in which (i) a firm can learn about the profitability of the ...

Purchase shares of major national brands in consumer packaged-goods industries vary substantially across stores, both between geographic markets and across stores within markets. We measure the relationship between the variation in national-brand purchase ...

Many marketing activities take place within teams; these team activities often involve repeated interactions among team members over several projects. We study whether and what types of repeated interactions improve current production success, and under ...

Even though epidemiological evidence links specific workplace stressors to health outcomes, the aggregate contribution of these factors to overall mortality and health spending in the United States is not known. In this paper, we build a model to estimate ...