Decision Making & Negotiations

The purpose of this chapter is to discuss how regulatory focus theory (Higgins 1997, 1998, 2002)—a theory of motivation and self-regulation that has been rapidly gaining prominence in consumer research (e.g., Aaker and Lee 2001; Briley and Wyer 2002; Pham and Avnet 2004; Zhou and Pham 2004)—can be drawn upon to explain a variety of consumer decision-making phenomena. We briefly review the major tenets of the theory, which proposes a fundamental distinction between two modes of self-regulation called promotion and prevention.

Lynne Sagalyn's chapter from Contentious City reviews the emotionally charged planning for the redevelopment of the WTC site between September 2001 and the end of 2004. Though we do not yet know how these plans will be realized, we can nonetheless examine how the initial plans emerged—or were extracted—from competing ambitions, contentious turf battles, intense architectural fights, and seemingly unresolvable design conflicts.

In this paper, we investigate the equilibrium behavior of decentralized supply chains with competing retailers under demand uncertainty. We also design contractual arrangements between the parties that allow the decentralized chain to perform as well as a centralized one.

This article considers the problem of testing curvature (e.g., linearity, concavity, convexity) in a multivariate nonparametric regression model. A measure of curvature, called the simplex statistic, that does not require bandwidth choice and is easy to compute, is introduced. A global test of curvature based on the simplex statistic is also introduced. Localized versions of the test, which require smoothing parameters, are shown to be consistent against more general alternatives than the global test.

This paper conducts a probabilistic analysis of an important class of heuristics for multi-item capacitated lot sizing problems.

In this paper, we examine people's appraisals of unusual objects and their intuitions about whether others will like those objects. Prior work suggests uniqueness motives (e.g., Need for Uniqueness) affect appraisals, but the effect of these motives on projection of appraisals to others is unclear. Contrary to some prior work, we argue that uniqueness motives do not govern projection of appraisals but rather that individual differences in perceived similarity to a target group do.

In this paper, we analyze the optimal policy for a risk averse agent who wants to sell a large block of shares of a risky security in the presence of price impact and transactions costs. Our framework reduces to the standard Merton portfolio problem in the absence of any market frictions. Optimal liquidation results in revenue distributions which are substantially different from those generated by a naive strategy. The main tradeoff involves choosing between revenue distributions which have high means versus those which have low variances.

Despite the influx of measures which can be customized to the demands of each business unit (e.g., customer satisfaction surveys and quality indices), many firms have been dogged in their reliance on standardized measures (e.g., conventional financial metrics) in performance evaluation. In this paper, we consider one justification: though customized measures may more accurately target the goals of a particular unit, standardized measures may offer more meaningful opportunities for relative performance evaluation.