Strategy

The Millennium Date Change (often referred to as Y2K) was anticipated to be a major liquidity event by many financial and corporate institutions as well as the central banks around the world. The timing of the event was foreseeable and thus satisfies the assumptions in the economic theory on public provision of private liquidity. We apply the theory to understand the liquidity premium in financial markets and the actions of the U.S. central bank in the period surrounding Y2K.

Many fundamental questions in oligopoly models reduce to the analysis of the monotonicity properties of various performance measures under the model's Nash equilibrium, with respect to specific exogenously specified parameters. These strategic parameters may have an impact on the demand functions of the various competitors, their cost structures or both.

This paper explores the motivations and desirability of off-balance sheet financing of credit card receivables by banks. We explore three related issues: the degree to which securitizations result in the transfer of risk out of the originating bank, the extent to which securitization permits banks to economize on capital by avoiding regulatory minimum capital requirements, and whether banks'' avoidance of minimum capital regulation through securitization with implicit recourse has been undesirable from a regulatory standpoint.

In a contingent claims framework, with a single issue of debt and full information, we show that the presence of a bankruptcy code with automatic stay, absolute priority rules, and potential debt forgiveness, can lead to significant conflicts of interest between the borrowers and lenders. In the first-best outcome, the code can add significant value to both parties by way of higher debt capacity, lower spreads, and improvement in the overall value of the firm.

We model the trade-off between low-asset risk and low leverage to satisfy preferences for low-risk deposits and apply it to interwar New York City banks. During the 1920s, profitable lending and low costs of raising capital produced increased bank asset risk and increased capital, with no deposit risk change. Differences in the costs of raising equity explain differences in asset risk and capital ratios. In the 1930s, rising deposit default risk led to deposit withdrawals. In response, banks increased riskless assets and cut dividends.

We address infinite-horizon models for oligopolies with competing retailers under demand uncertainty. We characterize the equilibrium behavior which arises under simple wholesale pricing schemes. More specifically, we consider a periodic review, infinite-horizon model for a two-echelon system with a single supplier servicing a network of competing retailers. In every period, each retailer faces a random demand volume, the distribution of which depends on his own retail price as well as those charged by possibly all competing retailers.

Product Management, 4th ed., by Lehmann and Winer is a defining text that covers three major tasks facing today's product mangers: analyzing the market, developing objectives and strategies for the product or service in question, and making decisions about price, advertising, promotion, channels of distribution and service. Product Management utilizes the familiar Marketing Plan as the unifying framework for its lessons, and takes a "hands-on" approach toward preparing graduates to assume the position of product manager.