Management Science

I present new stylized facts on the market for managers over the twentieth century, utilizing a novel data set on managerial careers. From the 1930s to the mid-1970s, the level of executive pay, inequality among executives across and within firms, and ...

We study a multiperiod dynamic pricing problem with contextual information, where the seller uses a misspecified demand model. The seller sequentially observes past demand, updates model parameters, and then chooses the price for the next period based on ...

Why do firms manage risk? According to various theories, firms hedge to mitigate credit rationing, to alleviate information asymmetry, and to reduce the risk of financial distress. However, empirical support for these theories is mixed. Our paper ...

Rapid improvements in the precision of mobile technologies now make it possible for advertisers to go beyond real-time static location and contextual information on consumers. In this paper we propose a novel “trajectory-based” targeting strategy for ...

People vary in what they view as a fair distribution of earnings in organizations and, more generally, society. Where do these different views originate? We study the question of whether the experience of failure or success in a winner-take-most ...

We examine the organizational choice and innovative activity of technology conglomerates—firms that explore different technology fields with heated inventive activity. We develop a measure of firm-to-economy technological proximity to capture the extent ...

In many production environments, a fixed network of capacity is shared flexibly between multiple products with random demands. What is the best way to configure the capacity of the production network and to allocate the available capacity to meet ...

When complex procurement projects are conducted, it is often not possible to write complete contracts. As a consequence, the relationship between buyer and supplier is important for the success of the project. In this paper we investigate the claim that ...

We study a firm’s capacity choice under demand uncertainty given that it must finance this investment externally. Sharing profits with investors causes governance problems affecting both capacity and demand: the firm may “steal” capital, which reduces ...

We study the value of short-lived and experientially oriented pop-up stores, a popular type of omnichannel retail strategy, on both retailers that participate in pop-up store events and retailing platforms that host these retailers. We conduct a large-...

Complementarity between performance pay and other organizational design elements has been argued to be one potential explanation for stark differences in the observed productivity gains from performance pay adoption. Using detailed data on internal ...

We propose a design for philanthropic or publicly funded seeding to allow (near) optimal provision of a decentralized, self-organizing ecosystem of public goods. The concept extends ideas from quadratic voting to a funding mechanism for endogenous ...

Although many franchisors choose to own some stores and franchise others, attempts to estimate the effect of franchising on store performance are hampered by an important selection issue: The franchisor may choose to assign the least desirable locations ...

This paper evaluates the short- and long-term value of sales representatives’ detailing visits to different types of physicians. By understanding the dynamic effect of sales calls across heterogeneous physicians, we provide guidance on the design of ...

We provide a new theory of ad valorem contracts (i.e., contracts that vary with the value of the transaction), which can explain why such contracts are widely used between vertically related parties (e.g., in franchising and licensing). Ad valorem ...

Firms are increasingly giving consumers the vote. Eight studies show that, when firms empower consumers to vote, consumers infer a series of implicit promises—even in the absence of explicit promises. We identify three implicit promises to which consumers ...

Our dynamic model of information technology (IT) outsourcing integrates incomplete contracts, moral hazard, and adverse selection under both perfect and, more realistically, bounded rationality. In addition to the classical profit-maximizing firm ...

Using comprehensive data on London Interbank Offer Rate (Libor) submissions from 2001 through 2012, we provide evidence consistent with banks manipulating Libor to profit from Libor-related positions and to signal their creditworthiness during distressed ...

We analyze whether growth firms should delay current investment to hoard cash in order to reduce dilution from external financing. This hoarding motive is the natural counterpart to saving cash as a precaution to help secure funding for future investment ...

We use principal component analysis on 55 bilateral exchange rates of 11 developed currencies to identify two important global risk sources in foreign exchange (FX) markets. The risk sources are related to Carry and Dollar but are not spanned by these ...

Bank lending standards vary over time. Periods in which firms find it relatively easy to borrow are followed by periods in which banks scrutinize borrowers more and tighten lending. We predict that changes in lending standards affect the accounting ...

We analyze relational contracts between a principal and a set of risk-neutral agents whose outputs are correlated. When only the agents’ aggregate output can be observed, a team incentive scheme is shown to be optimal, where each agent is paid a bonus for ...

The reputation information provided by market feedback systems tends to be compressed in the sense that reliable and unreliable sellers have similar feedback scores. The experiment presented here features a market in which what a buyer receives is a noisy ...

Using transaction data from a sample of 1.8 million credit card accounts, we provide the first field test of a major prediction of Prelec and Loewenstein’s theory of mental accounting: that consumers will pay off expenditure on transient forms of ...

We analyze how relationship finance, such as venture capital and relationship lending, affects growth firms’ capital structure choices. We show that relationship investors that obtain a strong bargaining position because of their privileged information ...

Using the setting of extreme mutual fund flow-driven trading pressure, this paper examines sell-side analysts’ role in stabilizing capital markets. We find that a select group of analysts persistently issue price-correcting recommendation changes for ...