Decision Making & Negotiations

Bias in the market for news is well-documented. Recent research in economics explains the phenomenon by assuming that consumers want to read (watch) news that is consistent with their tastes or prior beliefs rather than the truth. The present paper builds on this idea but recognizes that (i) besides "biased" consumers, there are also "conscientious" consumers whose sole interest is in discovering the truth, and (ii) consistent with reality, media bias is constrained by the truth. These two factors were expected to limit media bias in a competitive setting. Our results reveal the opposite.

This paper proposes a simple back testing procedure that is shown to dramatically improve a panel data model's ability to produce out of sample forecasts. Here the procedure is used to forecast mutual fund alphas. Using monthly data with an OLS model it has been difficult to consistently predict which portfolio managers will produce above market returns for their investors. This paper provides empirical evidence that sorting on the estimated alphas populates the top and bottom deciles not with the best and worst funds, but with those having the greatest estimation error.

In the present investigation, we build on prior research by examining perceptions of choices and their outcomes as a factor of independent and interdependent self–construals, the identity of the chooser, and the recipient of the choice. Results from two experiments suggest that independent selves prefer to be both chooser and choice recipient, whereas interdependent selves are more amenable to choosing for others and having others choose on their behalf.

American manufacturers often employ specialized agencies to create and produce advertising campaigns. This paper focuses on a critical juncture in the creation of American advertising: the meeting between the manufacturer (client) and the advertising agency, where advertising ideas are presented, discussed, and selected. Although the participants enter these meetings with the common goal of reaching agreement on the ideas that will be advanced to the next step in the creative development process, the attendees have additional, sometimes conflicting, professional and personal objectives.

This paper uses an analytical model to examine when it makes sense to provide incentives to innovators to adopt a new product. The model allows for separate segments of innovators and imitators, each of which follows a Bass-type diffusion process. Interestingly "seeding" the market is optimal for a limited range of situations and these do not appear to include those where there is a downturn in sales (chasm) as sales move from the first to the second segment.

We characterize supply chain settings in which perfect coordination can be achieved with simple wholesale pricing schemes: either retailer-specific constant unit wholesale prices or retailer-specific volume discount schemes. We confine ourselves to two-echelon supply chains with a single supplier servicing a network of retailers who compete with each other by selecting sales quantities.

In this paper, we provide an exact particle filtering and parameter learning algorithm. Our approach exactly samples from a particle approximation to the joint posterior distribution of both parameters and latent states, thus avoiding the use of and the degeneracies inherent to sequential importance sampling. Exact particle filtering algorithms for pure state filtering are also provided. We illustrate the efficiency of our approach by sequentially learning parameters and filtering states in two models.

Consider a make-to-order manufacturer that offers multiple products to a market of price and delay sensitive users.