Decision Making & Negotiations

Motivated by applications in financial services, we consider a seller who offers prices sequentially to a stream of potential customers, observing either success or failure in each sales attempt. The parameters of the underlying demand model are initially unknown, so each price decision involves a trade-off between learning and earning. Attention is restricted to the simplest kind of model uncertainty, where one of two demand models is known to apply, and we focus initially on performance of the myopic Bayesian policy (MBP), variants of which are commonly used in practice.

Why companies have had difficulties determining marketing ROI and how they should approach evaluating marketing ROI. (Reprinted from Columbia Ideas at Work, "Many Happy Returns on Marketing," 8/31/2009, pp. 1-2.)

We develop a dynamic incomplete-markets model of entrepreneurial firms, and demonstrate the implications of nondiversifiable risks for entrepreneurs' interdependent consumption, portfolio allocation, financing, investment, and business exit decisions. We characterize the optimal capital structure via a generalized tradeoff model where risky debt provides significant diversification benefits.

Although established money managers operate in an environment which seems com- petitive, they also seem to be very profitable. The present value of the expected future profits from managing a collection of funds is equal to the value of the assets under management times the profit margin, assuming that the managed funds will remain in business forever, zero asset flow into and out of the funds, zero excess returns net of trading costs, fixed management fee proportional to the assets under management and a fixed profit margin for the management company.

Focus groups are the most used and abused qualitative marketing research method. Refocusing Focus Groups by Robert J. Morais lays out, in simple terms, the best practices for planning, designing, conducting, and interpreting focus groups. The book draws upon perspectives and techniques from psychology and anthropology, along with decades of the author's and other experts' experience.

We consider a general infinite horizon inventory control model which combines demand and supply risks and the firm's ability to mitigate the supply risks by diversifying its procurement orders among a set of N potential suppliers. Supply risks arise because only a random percentage of any given replenishment order is delivered as useable units. The suppliers are characterized by the price they charge and the distribution of their yield factor.