Economics Insights @ CBS

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.

Building on the work of Dhar, Menon, and Maach (2004), this commentary describes how the compromise effect models developed in the work of Kivetz, Netzer, and Srinivasan (2004) can be extended to predict complex (business-to-business) purchase decisions and additional behavioral context effects. The authors clarify their general modeling approach and outline how it applies to choices among solutions (augmented products) and group decision making.

While the goal of OR/MS is to aid decision makers, implementation of published models occurs less frequently than one might hope. However, one area that has been significantly impacted by management science is emergency response systems. Dozens of papers on emergency service management appeared in the OR/MS literature in the 1970s alone, many of which were published in Management Science. Three of these papers won major prizes. More importantly, many of these papers led to the implementation of substantially new policies and practices, particularly in policing and firefighting.

Disputes by their nature involve contentious behavior. If one attributes such behavior to underlying personality traits, these attributions can be quite damning. The current research investigated negative trait attributions and their impact on dispute resolution decisions. We hypothesized that judging one's opponent to be low in agreeableness and high in emotionality (e.g. stubborn and volatile) shifts one's preference towards more formal procedures ? formal in the sense that a third party judge controls the process and outcome.