Decision Making & Negotiations

In this work we suggest that trait observability is an important predictor of what kind of feedback will be incorporated into self-knowledge. In two studies we find evidence that feedback about ones own observable traits, referencing social or physical characteristics, becomes incorporated into self-knowledge.  In our work, feedback on less observable traits, referencing internal states or competency, was not incorporated into self-knowledge.  This pattern holds for both positive and negative feedback, regardless of whether the feedback is explicitly or implicitly provided.

We develop a theoretical model to investigate the incentives for coordinating the positioning and pricing of horizontally differentiated products in the context of a vertical trading relationship between a retailer and multiple suppliers. We also use the model to analyze various trading relationships, such as category management, and characterize the channel efficiency of each, leading to interesting insights about when such practices may be most effective.

The problem of determining nurse staffing levels in a hospital environment is a complex task due to variable patient census levels and uncertain service capacity caused by nurse absenteeism. In this paper, we combine an empirical investigation of the factors affecting nurse absenteeism rates with an analytical treatment of nurse staffing decisions using a novel variant of the newsvendor model. Using data from the emergency department of a large urban hospital, we find that absenteeism rates are correlated with anticipated future nurse workload levels.

We consider a pricing problem in an environment where the customers' willingness-to-pay (WtP) distribution may change at some point over the selling horizon. Customers arrive sequentially and make purchase decisions based on a quoted price and their private reservation price. The seller knows the WtP distribution pre- and post-change, but does not know the time at which this change occurs. The performance of a pricing policy is measured in terms of regret: the loss in revenues relative to an oracle that knows the time of change prior to the start of the selling season.

This paper reviews the pattern of bank failures during the financial crisis and asks whether there was a link with corporate governance. It revisits the theory of bank governance and suggests a multiconstituency approach that emphasizes the role of weak creditors. The empirical evidence suggests that, on average, banks with stronger risk officers, less independent boards, and executives with less variable remuneration incurred fewer losses. There is no evidence that institutional shareholders opposed aggressive risk-taking.

Many economic decisions can be described as an option exercise or optimal stopping problem under uncertainty. Motivated by experimental evidence such as the Ellsberg Paradox, we follow Knight (1921) and distinguish risk from uncertainty. To afford this distinction, we adopt the multiple-priors utility model. We show that the impact of ambiguity on the option exercise decision depends on the relative degrees of ambiguity about continuation payoffs and termination payoffs. Consequently, ambiguity may accelerate or delay option exercise.

Blight findings have functioned as a cornerstone for condemnation since the great urban decline of the mid-twentieth century prompted governments at all levels throughout the country to intervene in the real estate market. Elements of blight, and then the term itself, became a basis for this intervention. But the use of blight as a basis for takings has become increasingly controversial as its application has migrated from slum clearance to urban renewal, then to economic development projects, and on to revenue-enhancing projects.