Working Papers

The benefits from using a computer software, and hence the willingness of a customer to pay for it, often depends on the number of other customers using the same software. These benefits have been referred to in the literature as “network…

In this paper, we study the interaction between a firm’s internal organizational design, which we treat as an irreversible technology choice, and its external environment. We focus on two internal organizational design variables: product design…

Quality of products and services is a key strategic variable for many organizations. A good understanding of quality improvement drivers enables managers to better allocate resources to those areas most likely to improve quality levels. It can…

A quota plan pays a fixed salary which is supplemented by commission income that is a prespecified fraction of the dollar sales that exceed the quota. For a salesforce comprised of multiple salespersons/territories, the commission rate and…

This paper models a dynamic sequence of protest activities as an informational cascade. Such a synthesis of participation and signaling games motivates why large numbers of people may have incentives to engage in costly collective action. The…

This paper considers a two-period model of investment management. Investors decide how to reallocate their wealth between two mutual funds managed by different investment advisers after observing the performance of each adviser in the first…

This paper analyzes a model of financing for start-up companies, focusing on the investment decisions that are made in later stages of financing and on the interaction between entrepreneurs, venture capitalists and other capital providers. We…

This paper studies the shelf space allocation decision for a store brand. We argue that since the store brand can play a unique role in the overall strategy of the retailer, traditional arguments for shelf space allocation decisions may not be…

Stock market crashes, defined as precipitious declines in value for securities that represent a large proportion of wealth (Garber 1992), are rare, difficult to explain, and potentially catastrophic. During four trading days in the crash of…

This paper is motivated by an often-observed but under-studied phenomenon of the modern business enterprise, management by exception. The term describes the relative infrequency of management interference in the lower tiers of an organizational…

In this paper we explore the relationship between brand advertising and wholesale and retail margins. We show that when the retail market is characterized by oligopolistic competition, higher level of brand advertising by a manufacturer can lead…

Abstract not available.

What is the optimal structure of the banking industry? Is it one in which firms have close long-term relationships with a single bank or one in which firms have arms-length relationships with multiple creditors? And what is the effect of…

We discuss two contrasting styles of vertical organization of an industry with complementary activities or components: systems competition versus component competition. When firm’s competencies differ, systems competition is not a perfect…

Manufacturer supported trade deals remain one of the major competitive tools in today’s market place. This is true despite the fact that such trade deals are often claimed to be unprofitable for manufacturers. The unprofitability is attributed…

We propose a conditional measure of capital market integration that allows us to characterize both the cross-section and time-series of expected returns in developed and emerging markets. Our measure, which arises from a conditional regime-…

New electronic trading technologies have drastically reduced the costs of financial transactions and put tremendous pressure on financial exchanges to lower their costs. The London Stock Exchange (LSE) is a prominent example of the changes being…

We analyze the effect of extended warranties on manufacturer’s warranty policy under conditions of producer moral hazard. When all consumers in the market are identical, the manufacturer offers a full warranty, blockading entry into the…

Which is the more profitable way to sell a company: a public auction or an optimally structured negotiation with a smaller number of bidders? We show that under standard assumptions the public auction is always preferable, even if it forfeits all…

A clearer understanding of the strengths and weaknesses of measures of legislative preferences is essential for resolving substantive disputes about the composition of standing committees in legislatures. In criticizing interest group ratings as…