Decision Making & Negotiations

We consider multimachine scheduling problems with earliness and tardiness costs. We first analyze problems in which the cost of a job is given by a general nondecreasing, convex function F, of the absolute deviation of its completion time from a (common) unrestrictive due-date, and the objective is to minimize the sum of the costs incurred for all N jobs. (A special case to which considerable attention is given to the completion time variance problem.)

This paper studies information system design in a model of double moral hazard in which there is both a decision problem and a control problem. If either problem is considered in isolation, an information system that provides more public information is preferred. However, an information system that provides less public information can, in fact, be desirable because of an interaction between the two problems. The benefit of choosing an information system that provides less information is that it serves as a substitute for commitment for the principal.

We use when-issued transactions data to assess the Treasury's current experiment with uniform auctions. When-issued volume is higher under uniform as compared to discriminatory auctions, suggesting a higher information release, which should reduce pre-auction uncertainty and the winner's curse. Under uniform auctions, when-issued volatility falls after the auction and again after the outcome announcement. The pattern is the opposite for discriminatory auctions. This is further evidence that uniform auctions increase pre-auction information and lower the short squeeze.

When the surge of equity REIT initial public offerings (IPOs) came to market in 1993 and 1994, the quality as well as an obvious increase in the quantity of newly securitized real estate (approximately $15.1 billion in the first two years of this bull market), defined a new REIT marketplace. By the end of 1995, the implied market capitalization of equity REITs had reached $59 billion, fourfold its size in 1992, and these real estate companies controlled approximately $83 billion in real estate.

In this paper we discuss stochastic Economic Lot Scheduling Problems (ELSP), i.e., settings where several items need to be produced in a common facility with limited capacity, under significant uncertainty regarding demands, production times, setup times, or combinations thereof. We propose a class of production/inventory strategies for stochastic ELSPs and describe how a strategy which minimizes holding, backlogging, and setup costs within this class can be effectively determined and evaluated.

A popular prediction in persuasion research is that decreased ability to process information increases reliance on peripheral cues and decreases reliance on central claims. This paper explains why this prediction does not necessarily hold when processing capacity is impaired by high arousal. Three experiments suggest that two types of processes underlie arousal effects on persuasion. Arousal induces selective processing of cues that are diagnostic at the expense of cues that are nondiagnostic - the selection effect.

The optimal number of items to be included in a service bundle for a profit-maximizing firm that uses pure components, pure bundling, or mixed bundling strategies is determined. When applied to Venkatesh and Mahajan's (1993) data, the number of events held is shown to have a substantial impact on firm profits. The pricing strategies of a nonprofit organization that seeks to maximize usage subject to a nondeficit constraint is also studied. Using the same data, it is shown that, compared to a profit maximizing firm, a usage-maximizing nonprofit organization 1. charges lower prices, 2.