The lessons we (don't) learn: Counterfactual thinking and organizational accountability after a close call
We investigate how individuals learn from imagined might-have-been scenarios. We hypothesize that individuals are more likely to learn when they have responded to an event with upward-directed, self-focused counterfactual thoughts, and, additionally, that this learning process is inhibited by accountability to organizational superiors. Support for these hypotheses was obtained in two studies that assessed learning by aviation pilots from the experience of near accidents.
The Pricing of Underwriting Services in the Australian Capital Market
The reinstatement of dissonance and psychological discomfort following failed affirmations
The research in this article examined the consequences of a failed attempt to reduce dissonance through a self-affirmation strategy. It was hypothesized that disconfirming participants' affirmations would reinstate psychological discomfort and dissonance motivation. In Experiment 1, high-dissonance participants who affirmed on a self-relevant value scale and received disconforming feedback about their affirmations expressed greater psychological discomfort (Elliot & Devine, 1994) than either affirmation-only participants or low-dissonance/affirmation disconformed participants.
Times Square: A Revisionist Lesson in City Building
Rapid comprehensive change in the physical pattern of a city is a minor revolution — as is the transformation of 42nd Street and Times Square. Two decades ago the agenda for change posed two big questions: Is it possible for cities to reshape what the market is likely to deliver in an area? Is large-scale redevelopment even a plausible political objective, especially when aggressive actions such as condemnation are deemed a necessary part of the strategy?
94%-Effective policies for a two-stage serial inventory system with stochastic demand
A Structural Perspective on Organizational Innovation
Sociologists contend that industries can be importantly characterized as sets of interlocking producer positions. This paper argues that this distinctively relational conception of a market represents a powerful framework for depicting and analyzing the process of technical change.
Choosing remedies after accidents: Counterfactual thoughts and the focus on fixing "human error"
The present research is motivated by an interest in why organizational decision makers so often respond to accidents with remedy plans that focus narrowly on correcting human error rather than more environment-focused plans or more encompassing plans. We investigated the role of counterfactual thinking in the decision-making tendency toward human-focused plans. Our experiments indicated that even in a domain where human-focused remedies were not otherwise appealing, many participants decided on human-focused remedies after they had generated an “if only” conjecture about the accident.
Comparing Alternative Hedge Accounting Standards: Shareholders' Perspectives
We study the economic consequences of alternative hedge accounting rules in terms of managerial hedging decisions and wealth effects for shareholders. The rules we consider include the "fair-value" and "cash-flow" hedge accounting methods prescribed by the recent SFAS No. 133. We illustrate that the accounting method used influences the manager's hedge decision. We show that under no-hedge accounting, the hedge choice is different from the optimal economic hedge the firm would make under symmetric and public information.
Comparison Opportunity and Judgment Revision
Prior evaluations are frequently challenged and need to be revised. We propose that an important determinant of such revisions is the degree to which the challenge provides an opportunity to compare the target against a competitor. Whenever a challenge offers an opportunity, the information contained in the challene will carry a disproportionate weight in the revised judgments. We call this proposition the comparison-revision hypothesis.
Scrutinizing Creativity—Response
The effects of low inventory on the development of productivity norms
Low inventory, a crucial part of just-in-time (JIT) manufacturing systems, enjoys increasing application worldwide, yet the behavioral effects of such systems remain largely unexplored. Operations research (OR) models of low-inventory systems typically use a simplifying assumption that processing times of individual workers are independent random variables. This leads to predictions that low-inventory systems will exhibit production interruptions leading to lower productivity. Yet empirical results suggest that low-inventory systems do not exhibit the predicted productivity losses.
Meme's the Word
Global Financial Instability: Framework, Events, Issues
Non Falsified Expectations and General Equilibrium Asset Pricing: The Power of the Peso
Creative Sparks
Popular Appeal Versus Expert Judgments of Motion Pictures
Cultural commentators addressing the differences between high art and mere entertainment have suggested that the standards of popular appeal governing the tastes of ordinary consumers differ from the criteria for excellence employed by professional critics in rendering expert judgments. These concerns appear in discussions of the cultural hierarchy (distinguishing among levels of tastes) and in claims that commercialism tends to degrade cultural objects (by catering to tastes that represent the lowest common denominator).
Worst-case analysis of (<em>R,Q</em>) policies in a two-stage serial inventory system with deterministic demand and backlogging
Advances in Research on Mental Accounting and Reason-Based Choice
Research extending over twenty years in behavioral decision theory has led to the development of two important research streams--mental accounting and reason-based choice. This paper explores recent research on the role of mental accounting and reason-based choice in the construction of consumer preferences. Evidence suggests that the principles of mental accounting often regulate the purchase and consumption of luxuries and that reasons may play an important part in this process.
Agents to the Rescue?
Decentralized supply chains subject to information delays
Lessons from the Asian Crisis
All Negative Moods Are Not Equal: Motivational Influences of Anxiety and Sadness in Decision Making
Affective states of the same valence may have distinct, yet predictable, influences on decision processes. Results from three experiments show that, in gambling decisions, as well as in jobselection decisions, sad individuals are biased in favor of highrisk/high-reward options, whereas anxious individuals are biased in favor of low-risk/low-reward options. We argue that these biases occur because anxiety and sadness convey distinct types of information to the decision-maker and prime different goals.
Misperceiving negotiation counterparts: When situationally determined bargaining behaviors are attributed to personality traits
Several experiments provided evidence that negotiators make systematic errors in personality-trait attributions for the bargaining behaviors of their counterparts. Although basic negotiation behavior is highly determined by bargaining positions, negotiators primarily interpret their counterpart's behavior in terms of the counterpart's personality, such as his or her level of cooperativeness or agreeableness.
The impact of adding a make-to-order item to a make-to-stock production system
Stochastic Economic Lot Scheduling Problems (ELSPs) involve settings where several items need to be produced in a common facility with limited capacity, under significant uncertainty regarding demands, unit production times, setup times, or combinations thereof. We consider systems where some products are made-to-stock while another product line is made-to-order. We present a rich and effective class of strategies for which a variety of cost and performance measures can be evaluated and optimized efficiently by analytical methods.
A Reexamination of the Conglomerate Merger Wave in the 1960s: An Internal Capital Markets View
One possible explanation for bidding firms earning positive abnormal returns in diversifying acquisitions in the 1960s is that internal capital markets were expected to overcome the information deficiencies of the less-developed capital markets. Examining 392 bidder firms during the 1960s, we find the highest bidder returns when financially "unconstrained" buyers acquire "constrained" targets. This result holds while controlling for merger terms and for different proxies used to classify firms facing costly external financing.
An International Dynamic Asset Pricing Model
We examine the ability of a dynamic asset-pricing model to explain the returns on G7-country stock market indices. We extend Campbell's (1996) asset-pricing model to investigate international equity returns. We also utilize and evaluate recent evidence on the predictability of stock returns. We find some evidence for the role of hedging demands in explaining stock returns and compare the predictions of the dynamic model to those from the static CAPM. Both models fail in their predictions of average returns on portfolios of high book-to-market stocks across countries.
International Experiences with Different Monetary Policy Regimes
The value iteration method for countable state Markov decision processes
This paper deals with Markov decision processes with a countable state space. We demonstrate that a single, relatively simple condition suffices to guarantee that the value-iteration method converges and that an optimal policy can be computed via this method, once the existence of a solution to the average cost optimality equation has been established via any of the many available sets of existence conditions.
A randomized linear programming method for computing network bid prices
We analyze a randomized version of the deterministic linear programming (DLP) method for computing network bid prices. The method consists of simulating a sequence of realizations of itinerary demand and solving deterministic linear programs to allocate capacity to itineraries for each realization. The dual prices from this sequence are then averaged to form a bid price approximation. This randomized linear programming (RLP) method is only slightly more complicated to implement than the DLP method.
Revenue management: Research overview and prospects
This survey reviews the forty-year history of research on transportation revenue management (also known as yield management). We cover developments in forecasting, overbooking, seat inventory control, and pricing, as they relate to revenue management, and suggest future research directions. The survey includes a glossary of revenue management terminology and a bibliography of over 190 references.
Toward Identifying the Inventive Templates of New Products: A Channeled Ideation Approach
Is There a Free Lunch in Emerging Market Equities?
It is argued that a more realistic picture of the true diversification benefits from emerging equity markets is available from 3 investment vehicles that provide access to emerging market returns, while circumventing many of the restrictions and costs that limit the conclusions of previous emerging market research.
Asymptotically optimal importance sampling and stratification for pricing path-dependent options
This paper develops a variance reduction technique for Monte Carlo simulations of path-dependent options driven by high-dimensional Gaussian vectors. The method combines importance sampling based on a change of drift with stratified sampling along a small number of key dimensions. The change of drift is selected through a large deviations analysis and is shown to be optimal in an asymptotic sense. The drift selected has an interpretation as the path of the underlying state variables which maximizes the product of probability and payoff—the most important path.
Technological Change and Wages: An Interindustry Analysis
Previous research has shown that wages in industries characterized by higher rates of technological change are higher. In addition, there is evidence that skill-biased technological change is responsible for the dramatic increase in the earnings of more educated workers relative to less educated workers that took place during the 1980s.
When and How Is the Internet Likely to Decrease Price Competition?
Marketers all over the world agree that the Internet will have a major impact on the way firms do business. What changes will exactly occur, however, is hard to predict as the Internet is in a phase of rapid growth and constant change. Patterns are difficult to isolate, especially since despite its explosive growth, today, the Net is still in its infancy, only being available to a small proportion of people. In spite of this general lack of reliable patterns, one consensus among managers seems to be that the Internet is likely to intensify price competition.
An Economic Theory of GATT
Extent and Impact of Incubation Time in New Product Diffusion
This article examines the time between product development and market launch, and its relation to the subsequent diffusion of consumer durables. We find that this "incubation time" is long. Further, it is a useful predictor of the shape of the subsequent sales diffusion curve. Using the Bass model as a base, we find that the longer the incubation time, the lower the coefficient of innovation (p) and the longer the time to peak sales. Further, using the incubation time in a Bayesian forecasting model significantly improves forecasts early in the life cycle.
Rethinking the Value of Choice: A Cultural Perspective on Intrinsic Motivation
Conventional wisdom and decades of psychological research have linked the provision of choice to increased levels of intrinsic motivation, greater persistence, better performance, and higher satisfaction. This investigation examined the relevance and limitations of these findings for cultures in which individuals possess more interdependent models of the self. In two studies, personal choice generally enhanced motivation more for American independent, than for Asian interdependent selves.
Strategic Experimentation
This paper extends the classic two-armed bandit problem to a many-agent setting in which N players each face the same experimentation problem. The main change from the single-agent problem is that an agent can now learn from the current experimentation of other agents. Information is therefore a public good, and a free-rider problem in experimentation naturally arises.
Financial Consolidation: Dangers and Opportunities
A Segmentation You Can Act on
Anchoring, Confirmatory Search, and the Construction of Values
Beating a Moving Target: Optimal Portfolio Strategies for Outperforming a Stochastic Benchmark
Central Banking in a Democratic Society: Implications for Transition Countries
Combined pricing and inventory control under uncertainty
This paper addresses the simultaneous determination of pricing and inventory replenishment strategies in the face of demand uncertainty. More specifically, we analyze the following single item, periodic review model. Demands in consecutive periods are independent, but their distributions depend on the item's price in accordance with general stochastic demand functions. The price charged in any given period can be specified dynamically as a function of the state of the system. A replenishment order may be placed at the beginning of some or all of the periods. Stockouts are fully backlogged.
Commentary on "Analysis of Choice Expectations in Incomplete Scenarios"
Commercial Use of UPC Scanner Data: Industry and Academic Perspectives
Connecting Discrete and Continuous Path-Dependent Options
This paper develops methods for relating the prices of discrete- and continuous-time versions of path-dependent options sensitive to extremal values of the underlying asset, including lookback, barrier, and hindsight options. The relationships take the form of correction terms that can be interpreted as shifting a barrier, a strike, or an extremal price. These correction terms enable us to use closed-form solutions for continuous option prices to approximate their discrete counterparts.
Consumer Behavior and Y2K
Different theories, areas of substantive interest, and methods are needed to prevent consumer behavior from becoming increasingly isolated and of marginal relevance in market research. More progress will be made by focusing on relatively underresearched areas, such as: 1. focus on time, 2. the adaptive consumer, and 3. relevant dependent variables. Avenues for substantive focus include: 1. important decisions, 2. not just price and advertising, and 3. the impact of major events. Issues that arise with respect to the methods used to study consumer behavior include: 1.