Economics Insights @ CBS

In most vehicle routing problems, a given set of customers is to be partitioned into a collection of regions each of which is assigned to a single vehicle starting at a depot and returning there after visiting all of the region's customers exactly once in a route. In this paper we consider problem settings where the cost of a route may depend on its length ϑ as well as m, the number of points on the route, according to some general function f(ϑ,m), assumed to be nondecreasing and concave in ϑ.

A central assumption of meta-analysis is that the sample of studies fairly represents all work done in the field, published and unpublished. However, if studies with "poor" results are less likely to be published, a potential publication bias is present. The authors propose a maximum likelihood approach to estimating publication bias for the situation in which censorship based on effect size may occur. An explicit hypothesis test is provided for testing whether or not censorship is present.

By committing to terminate funding if a firm's performance is poor, investors can mitigate managerial incentive problems. These optimal financial constraints, however, encourage rivals to ensure that a firm's performance is poor; this raises the chance that the financial constraints become binding and induce exit. We analyze the optimal financial contract in light of this predatory threat. The optimal contract balances the benefits of deterring predation by relaxing financial constraints against the cost of exacerbating incentive problems. (JEL 610)