In this paper, we provide an axiomatic foundation for the value-based version of the drift diffusion model (DDM) of Ratcliff, a successful model that describes two-alternative speeded decisions between consumer goods. Our axioms present a test for model misspecification and connect the externally observable properties of choice with an important neurophysiologic account of how choice is internally implemented. We then extend our axiomatic analysis to multialternative choice under time pressure. In a nutshell, we show that binary DDM comparisons of the alternatives, paired with Markovian exploration of the consideration set, approximately lead to softmaximization.
参考文献：Baldassi, C., et al. (2020). "A Behavioral Characterization of the Drift Diffusion Model and Its Multialternative Extension for Choice Under Time Pressure." Management Science 66(11): 5075-5093.
Lacking credible rule-enforcement mechanisms to punish misconduct, existing reward-based crowdfunding platforms can leave backers exposed to two risks: entrepreneurs may run away with backers' money (funds misappropriation), and product specifications may be misrepresented (performance opacity). We show that each of these risks can materially impact crowdfunding efficiency, and, when jointly present, they interact with each other in ways that can dampen or, more worryingly, amplify their individual adverse effects. To mitigate these risks, we propose two mechanisms based on deferred payments. The first involves stopping the campaign once the funding goal is reached and servicing any unmet demand in the aftermarket. The second involves escrowing any funds raised in excess of the goal, as insurance for backers. We show that early stopping dominates escrow and boosts platform revenues. Pairing these deferred payment designs with (costly) performance verification contingencies can bring additional gains, but doing so can flip their relative performance, with escrow coming out on top. Overall, by accounting for different timing (pre- versus post-campaign) and enforcement rules (mandatory versus optional) of the verification contingencies, we analyze a total of 10 different designs and show that two of them dominate: the early stopping design and the escrow design with mandatory ex-post verification. We conclude by providing recommendations for which design works best under different conditions and exploring the potential of crowdsourced performance checks.
参考文献：Belavina, E., et al. (2020). "Rethinking Crowdfunding Platform Design: Mechanisms to Deter Misconduct and Improve Efficiency." Management Science 66(11): 4980-4997.
We examine a model of Cournot competition with congestion motivated by recent policy to allow commercial sharing of wireless spectrum that is assigned to other users such as government agencies. A key feature of such spectrum is that it is intermittently available because of the incumbent user's activity. In our model, wireless service providers (SPs) compete for a common pool of customers using their own proprietary (exclusively licensed) bands of spectrum along with access to an additional intermittent band. When the intermittent band is unavailable, any traffic carried on that band must be shifted to the proprietary bands. Customers are sensitive to both the price they pay and the average congestion they experience across the bands of spectrum from which they receive service. We compare two different access policies for this intermittent band: one in which it is open to all SPs and one in which it is licensed to a single SP. We also allow the band to be divided into multiple subbands where each subband is either open or licensed. We characterize trade-offs between social welfare and consumer welfare that depend on the choice of different access policies and assignments of subbands to SPs. These can involve subtle issues related to the ability of a larger SP to make more efficient use of intermittent spectrum and the increase in competition by assigning more spectrum to smaller SPs.
参考文献：Berry, R., et al. (2020). "The Value of Sharing Intermittent Spectrum." Management Science 66(11): 5242-5264.
We use a laboratory experiment to study the effects of disclosing the number of active participants in contests with endogenous entry. At the first stage, potential participants decide whether to enter competition, and at the second stage, entrants choose their investments. In a 2x2 design, we manipulate the size of the outside option, omega, and whether the number of entrants is disclosed between the stages. Theory predicts more entry for lower omega and the levels of entry and aggregate investment to be independent of disclosure in all cases. We find empirical entry frequencies decreasing with.. For aggregate investment, we find no effect of disclosure when omega is low but a strong positive effect of disclosure when omega is high. The difference is driven by substantial overinvestment in contests with a small, publicly known number of players contrasted by more restrained investment in contests in which the number of players is uncertain and may be small. The behavior under disclosure is explained by a combination of joy of winning and entry regret.
参考文献：Boosey, L., et al. (2020). "Information Disclosure in Contests with Endogenous Entry: An Experiment." Management Science 66(11): 5128-5150.
Prospect Theory's value function suggests that investors would be risk averse in the gain domain and risk seeking in the loss domain-that is, the reflection effect. However, most of the experimental evidence relies on choice tasks in the gain domain between prospects marked in dollar amounts and considering non-mixed lotteries. There is not much work that examines environments with properties typical in investment decisions where the task is fund allocation involving mixed lotteries with outcomes being rate of return. The recent negative deposit rates in Europe demonstrate the importance of this question and, in particular, understanding investment decisions in the loss domain. This paper fills this gap by using a series of laboratory experiments mimicking these properties of investment decisions with a range of investment amounts and with the money to invest either being earned and literally on the table or not. Yet, no matter the settings, we find no evidence for the reflection effect in investment, and behavior is most consistent with maximizing expected return. This holds regardless of the language used (abstract or not), whether we use a two- or a three-state lottery, whether the task is continuous rather than discrete, or the risky portfolio is a mixed lottery.
参考文献：Bracha, A. (2020). "Investment Decisions and Negative Interest Rates." Management Science 66(11): 5316-5340.
We consider an inventory control problem with multiple products and stockout substitution. The firm knows neither the primary demand distribution for each product nor the customers' substitution probabilities between products a priori, and it needs to learn such information from sales data on the fly. One challenge in this problem is that the firm cannot distinguish between primary demand and substitution (overflow) demand from the sales data of any product, and lost sales are not observable. To circumvent these difficulties, we construct learning stages with each stage consisting of a cyclic exploration scheme and a benchmark exploration interval. The benchmark interval allows us to isolate the primary demand information from the sales data, and then this information is used against the sales data from the cyclic exploration intervals to estimate substitution probabilities. Because raising the inventory level helps obtain primary demand information but hinders substitution demand information, inventory decisions have to be carefully balanced to learn them together. We show that our learning algorithm admits a worst-case regret rate that (almost) matches the theoretical lower bound, and numerical experiments demonstrate that the algorithm performs very well.
参考文献：Chen, B. X. and X. L. Chao (2020). "Dynamic Inventory Control with Stockout Substitution and Demand Learning." Management Science 66(11): 5108-5127.
We explore a subtle but important mechanism through which firms can control information flow to the markets. We find that firms that "cast" their conference calls by disproportionately calling on bullish analysts tend to underperform in the future. Firms that call on more favorable analysts experience more negative future earnings surprises and more future earnings restatements. A long-short portfolio that exploits this differential firm behavior earns abnormal returns of up to 149 basis points per month or almost 18% per year. We find similar evidence in an international sample of earnings call transcripts from the United Kingdom, Canada, France, and Japan. Firms with higher discretionary accruals, firms that barely meet/exceed earnings expectations, and firms (and their executives) that are about to issue equity, sell shares, and exercise options are all significantly more likely to cast their earnings calls.
We consider the problem faced by a firm that receives highly differentiated products in an online fashion. The firm needs to price these products to sell them to its customer base. Products are described by vectors of features and the market value of each product is linear in the values of the features. The firm does not initially know the values of the different features, but can learn the values of the features based on whether products were sold at the posted prices in the past. This model is motivated by applications such as online marketplaces, online flash sales, and loan pricing. We first consider a multidimensional version of binary search over polyhedral sets and show that it has a worst-case regret which is exponential in the dimension of the feature space. We then propose a modification of the prior algorithm where uncertainty sets are replaced by their Lowner-John ellipsoids. We show that this algorithm has a worst-case regret which is quadratic in the dimension of the feature space and logarithmic in the time horizon. We also show how to adapt our algorithm to the case where valuations are noisy. Finally, we present computational experiments to illustrate the performance of our algorithm.
参考文献：Cohen, M. C., et al. (2020). "Feature-Based Dynamic Pricing." Management Science 66(11): 4921-4943.
We examine the shareholder wealth effects of the adoption of the UK Modern Slavery Act 2015 (MSA). The MSA's Transparency in Supply Chains clause introduced new reporting requirements mandating certain firms to provide an annual statement outlining how they identify and mitigate modern slavery in their business and supply chain. An event study of stock price reactions of UK firms covered by the MSA to eight events associated with its adoption provides no evidence of abnormal stock returns. We do, however, uncover significant cross-sectional differences in stock price reactions, with results suggesting that the MSA provides a competitive advantage to firms with a demonstrated track record of addressing slavery risk. We find no effects for preregulatory corporate social responsibility disclosure levels on stock price reactions. Our findings highlight the economic value of maintaining socially responsible sourcing practices and inform the current policy debate on the importance of greater transparency in corporate supply chains.
参考文献：Cousins, P., et al. (2020). "Shareholder Wealth Effects of Modern Slavery Regulation." Management Science 66(11): 5265-5289.
We study the role of ad networks in the online advertising market. Our baseline model considers two publishers that can outsource the sale of their ad inventories to an ad network, in a market where consumers and advertisers multi-home. The ad network increases total advertising revenue by tracking consumers across outlets and reduces competition between publishers by centralizing the sale of ads. Consequently, outsourcing to the ad network benefits the publishers, but may penalize the advertisers. We show that the ad network's ability to track consumers may either expand or reduce the provision of ads, depending on consumers' preferences for the publishers and how advertisers use tracking information. Specifically, tracking is more likely to expand (respectively, reduce) the provision of ads when consumers' preferences for the publishers are positively (respectively, negatively) correlated. Tracking is also more likely to expand (respectively, reduce) the provision of ads when advertisers use tracking information to cap the frequency of impressions (respectively, target specific consumers). Furthermore, we study the implications of consumers' choice to block tracking. Generally, blocking negatively impacts the advertising industry by making ad allocation less effective. Blocking also entails an externality on consumers, which is negative when tracking reduces the provision of ads. Given these conditions, regulatory restrictions on tracking may reduce consumer surplus as well as advertising revenue. These findings contrast with the presumption that regulation should make it easier for consumers to avoid tracking. We propose further extensions, including competing ad networks, more than two publishers, and networks that do not sell ads, but only tracking information to the advertisers.
参考文献：D'Annunzio, A. and A. Russo (2020). "Ad Networks and Consumer Tracking." Management Science 66(11): 5040-5058.
We study assemble-to-order (ATO) problems from the literature. ATO problems with general structure and integrality constraints are well known to be difficult to solve, and we provide new insight into these issues by establishing worst-case approximation guarantees through primal-dual analyses and linear programming (LP) rounding. First, we relax the one-period ATO problem using a natural newsvendor decomposition and use the dual solution for the relaxation to derive a lower bound on optimal cost, providing a tight approximation guarantee that grows with the maximum product size in the system. Then, we present an LP rounding algorithm that achieves both asymptotic optimality as demand grows large, and a 1.8 approximation factor for any problem instance. In addition to theoretical guarantees, we perform comprehensive numerical simulations and find that our rounding algorithm outperforms existing techniques and is close to optimal. Finally, we demonstrate that our one-period LP rounding results can be used to develop an asymptotically optimal integral policy for dynamic ATO problems with backlogging and identical component lead-times.
参考文献：DeValve, L., et al. (2020). "A Primal-Dual Approach to Analyzing ATO Systems." Management Science 66(11): 5389-5407.
In the school choice market, where scarce public school seats are assigned to students, a key operational issue is how to reassign seats that are vacated after an initial round of centralized assignment. Practical solutions to the reassignment problem must be simple to implement, truthful, and efficient while also alleviating costly student movement between schools. We propose and axiomatically justify a class of reassignment mechanisms, the permuted lottery deferred acceptance (PLDA) mechanisms. Our mechanisms generalize the commonly used deferred acceptance (DA) school choice mechanism to a two-round setting and retain its desirable incentive and efficiency properties. School choice systems typically run DA with a lottery number assigned to each student to break ties in school priorities. We show that under natural conditions on demand, the second-round tiebreaking lottery can be correlated arbitrarily with that of the first round without affecting allocative welfare and that reversing the lottery order between rounds minimizes reassignment among all PLDA mechanisms. Empirical investigations based on data from New York City high school admissions support our theoretical findings.
参考文献：Feigenbaum, I., et al. (2020). "Dynamic Matching in School Choice: Efficient Seat Reassignment After Late Cancellations." Management Science 66(11): 5341-5361.
Although significant research has examined how technology can intensify racial and other outgroup biases, limited work has investigated the role information systems can play in abating them. Racial biases are particularly worrisome in healthcare, where underrepresented minorities suffer disparities in access to care, quality of care, and clinical outcomes. In this paper, we examine the role clinical decision support systems (CDSS) play in attenuating systematic biases among black patients, relative to white patients, in rates of amputation and revascularization stemming from diabetes mellitus. Using a panel of inpatient data and a difference-in-difference approach, results suggest that CDSS adoption significantly shrinks disparities in amputation rates across white and black patients-with no evidence that this change is simply delaying eventual amputations. Results suggest that this effect is driven by changes in treatment care protocols that match patients to appropriate specialists, rather than altering within physician decision making. These findings highlight the role information systems and digitized patient care can play in promoting unbiased decision making by structuring and standardizing care procedures.
参考文献：Ganju, K. K., et al. (2020). "The Role of Decision Support Systems in Attenuating Racial Biases in Healthcare Delivery." Management Science 66(11): 5171-5181.
We present a natural field experiment designed to measure other-regarding preferences in the market for taxis. We employed testers of varying ethnicity to take a number of predetermined taxi journeys. In each case, we endowed them with only 80% of the expected fare. Testers revealed the amount they could afford to pay to the driver midjourney and asked for a portion of the journey for free. In a 2 x 2 between-subjects design, we vary the length of the journey and whether a business card is elicited. We find that (1) the majority of drivers give at least part of the journey for free, (2) giving is proportional to the length of the journey, and (3) 27% of drivers complete the journey. Evidence of outgroup negativity against black testers is also reported. In order to link our empirical analysis to behavioral theory, we estimate the parameters of a number of utility functions. The data and the structural analysis lend support to the quantitative predictions of experiments that measure other-regarding preferences, and they shed further light on how discrimination can manifest itself within our preferences.
参考文献：Grosskopf, B. and G. Pearce (2020). "Do You Mind Me Paying Less? Measuring Other-Regarding Preferences in the Market for Taxis." Management Science 66(11): 5059-5074.
This paper models how firms or political campaigners (senders) persuade consumers and voters (receivers) by selectively disclosing information about their offering depending on individual receivers' preferences and orientations. We derive positive and normative implications depending on the extent of competition among senders, whether receivers are wary of senders collecting personalized data, and whether firms are able to personalize prices. We show how both senders and receivers can benefit from selective disclosure. Privacy laws requiring senders to obtain consent to acquire personal information that enables such selective disclosure increases receiver welfare if and only if there is little or asymmetric competition among senders, if receivers are unwary, and if firms can price discriminate.
参考文献：Hoffmann, F., et al. (2020). "Persuasion Through Selective Disclosure: Implications for Marketing, Campaigning, and Privacy Regulation." Management Science 66(11): 4958-4979.
We study how three matching institutions, differing in how relationships are dissolved, affect cooperation in a repeated prisoner's dilemma and how cooperation rates are affected by the presence of a reputation mechanism. Although cooperation is theoretically sustainable under all institutions, we show experimentally that cooperation rates are lowest under random matching, highest under fixed matching, and intermediate in a flexible matching institution, where subjects have the option to dissolve relationships. Our results also suggest important interactions between the matching institution and reputation mechanism. Under both the random matching and flexible matching institutions, both subjective (based on subjects' ratings) and objective (based on subjects' actions) reputation mechanisms lead to substantial increases in cooperative behavior. However, under fixed matching, only the subjective reputation mechanism leads to higher cooperation. We argue that these differences are due to different reputation mechanisms being more forgiving of early deviations from cooperation under certain matching institutions, which gives subjects the ability to learn the value of cooperation rather than getting stuck with a bad reputation and, consequently, uncooperative relationships.
参考文献：Honhon, D. and K. Hyndman (2020). "Flexibility and Reputation in Repeated Prisoner's Dilemma Games." Management Science 66(11): 4998-5014.
Temporal distance refers to the time between purchase and consumption in advanced-sales industries. We explore how the response of aggregate demand to price changes with temporal distance in a large, proprietary data set of Florida cruise prices, bookings, and product attributes. We offer the first evidence that cruise demand becomes more sensitive to price during the advance sales period, unlike extant findings in other settings. The results also show that demand is greatest late in the advance sales period, providing the first finding that a late-season high-demand period coincides with a late-season increase in aggregate price sensitivity. The high-demand effect more than offsets the high-price-responsiveness pattern, leading the firm to increase prices throughout the advance sales period. Although the data do not disentangle multiple competing explanations for the main findings, they are large enough to appear in simple data visualizations and robust enough to replicate across many model specifications, parameterizations, and partitions of the data.
参考文献：Joo, M., et al. (2020). "Temporal Distance and Price Responsiveness: Empirical Investigation of the Cruise Industry." Management Science 66(11): 5362-5388.
We propose a model for word-of-mouth (WoM) management where a firm has two tools at hand: offering referral rewards and offering a free contract. Current customers' incentives to engage in WoM can affect the contracting problem of a firm in the presence of positive externalities of users. Formally, we consider a classic Maskin-Riley contracting problem for the receiver of WoM where the firm can pay the senders referral rewards and a sender experiences positive externalities if the receiver adopts. A free contract can incentivize WoM because the higher adoption probability increases the expected externalities that the sender receives. We characterize the optimal incentive scheme and show when the two tools serve as substitutes and complements to each other depending on whether the market is niche and whether the product is social. We show that offering a free contract is optimal only if the fraction of premium users in the population is small, which is consistent with the observation that companies that successfully offer "freemium" contracts oftentimes have a high percentage of free users.
参考文献：Kamada, Y. and A. Ory (2020). "Contracting with Word-of-Mouth Management." Management Science 66(11): 5094-5107.
Data-driven decision-making (DDD) is rapidly transforming modern operations. The availability of big data, advances in data analytics tools, and rapid gains in processing power enable firms to make decisions based on data rather than intuition. Yet, most firms still allow managers to override decisions from DDD tools, as managers might possess private information not present in the DDD tool. We report on a field-experiment conducted by an automobile replacement parts retailer that examines the profit implications of providing discretionary power to merchants. We find that merchants' overrides of the DDD tool reduce profitability by 5.77%. However, our analysis over product life cycle (PLC) reveals that merchants increase (decrease) profitability for growth-(mature-&decline-) stage products.
参考文献：Kesavan, S. and T. Kushwaha (2020). "Field Experiment on the Profit Implications of Merchants' Discretionary Power to Override Data-Driven Decision-Making Tools." Management Science 66(11): 5182-5190.
We investigate the relation between corporate performance and overall economic growth in the United States. In particular, we focus on the impact of the U.S. corporate tax regime on this relation. Exploiting time-series variation and a tax shock, we document that the relatively higher corporate income tax rate and the tax treatment of foreign earnings of U.S. corporations have contributed to a disconnect between the performance of the corporate sector and the overall economy. Specifically, the growth of domestic (national) corporate profits, on average, has outpaced the growth of the domestic (national) economy, and this disconnect increases as the difference between the U.S. corporate income tax rate and the average tax rate of the other Organisation for Economic Co-operation and Development countries increases. The underlying mechanism is fewer corporate profits being channeled into subsequent domestic investments when the U. S. tax rate is relatively higher, leading to lower economic growth. Our findings have implications for policy setters.
参考文献：Khan, U., et al. (2020). "The Role of Taxes in the Disconnect Between Corporate Performance and Economic Growth." Management Science 66(11): 5427-5447.
Providing patients with timely care from the appropriate unit involves both correct clinical evaluation of patient needs and making admission decisions to effectively manage a unit with limited capacity in the face of stochastic patient arrivals and lengths of stay. We study human decision behavior in the latter operations management task. Using behavioral models and controlled experiments in which physicians and MTurk workers manage a simulated hospital unit, we identify cognitive and environmental factors that drive systematic admission decision bias. We report on two main findings. First, seemingly innocuous "occupancy information hurdles" (e.g., having to type a password to view current occupancy) can cause a chain of events that leads physicians to maintain systematically lower unit utilization. Specifically, these hurdles cause physicians to make most admission decisions without checking the current unit occupancy. Then-between the times that they do check-physicians underestimate the number of available beds when occupancy increases from admissions are more salient than occupancy decreases from discharges. Second, decision-related random error or "noise" leads to higher- or lowerthan-optimal utilization of hospital units in predictable patterns, depending on the system parameters. We provide evidence that these patterns are due to some settings providing more opportunity for physicians to mistakenly admit patients and other settings that provide more opportunity to mistakenly reject patients. These findings help identify when and why clinicians are likely to make inefficient decisions because of human cognitive limitations and suggest mitigation strategies to help hospital units improve their capacity management.
参考文献：Kim, S. H., et al. (2020). "Admission Control Biases in Hospital Unit Capacity Management: How Occupancy Information Hurdles and Decision Noise Impact Utilization." Management Science 66(11): 5151-5170.
Does the predeal geographic overlap of the branches of two banks affect the probability that they merge, postannouncement stock returns, and postmerger performance? We compile information on U.S. bank acquisitions from 1984 through 2016, construct several measures of network overlap, and design and implement a new identification strategy. We find that greater predeal network overlap (1) increases the likelihood that two banks merge; (2) boosts the cumulative abnormal returns of the acquirer, target, and combined banks; and (3) reduces employment, boosts revenues, reduces the number of branches, improves loan quality, and expedites executive turnover.
参考文献：Levine, R., et al. (2020). "Bank Networks and Acquisitions." Management Science 66(11): 5216-5241.
When wages are transparent, sales agents may compare their pay with that of their peers and experience positive or negative feelings if those peers are paid (respectively) less or more. We investigate the implications of such social comparisons on sales agents' effort decisions and their incentives to help or collaborate with each other. We then characterize the firm's optimal sales force compensation scheme and the conditions under which wage transparency benefits the firm. Our results show that the work environment-which includes such aspects as demand uncertainty, correlation across sales territories, and the possibility of help/collaboration-plays a significant role in the firm's compensation and wage transparency decisions. In particular, wage transparency is more likely to benefit the firm when demand uncertainty is low, sales outcomes are positively correlated across different sales territories, and sales agents can collaborate at low cost. We find that, contrary to conventional wisdom, social comparisons need not reduce collaboration among agents. Our study also highlights the importance of providing the right mix of individual and group incentives to elicit the benefits of wage transparency.
