Publications

March 2005
Article

Sovereign Debt As a Contingent Claim: A Quantitative Approach

By: Laura Alfaro and Fabio Kanczuk

We construct a dynamic equilibrium model with contingent service and adverse selection to quantitatively study sovereign debt. In the model, benefits of defaulting are tempered by higher future interest rates. For a wide set of parameters, the only equilibrium is one... View Details

Keywords: Sovereign Finance; Borrowing and Debt; Interest Rates; Balance and Stability; Risk and Uncertainty; Risk Management; Mathematical Methods; Management Style; Segmentation; Debt Securities; Banking Industry

07 Apr 2003
Research & Ideas

How the U.S. Army Develops Leaders

understandings of ourselves from our experiences.— Scott A. Snook Within this framework, officer development involves qualitative shifts in how officers make sense of themselves and their experiences. Each shift leads to a progressively... View Details

Keywords: by Martha Lagace

02 May 2000
Research & Ideas

Leading Professional Service Firms

but the core components remain extremely effective. The curriculum resonates strongly with course participants because it deals with exactly the kinds of issues professional service firm leaders face daily. As in all HBS courses, we employ the case study View Details

Keywords: Re: Jay W. Lorsch; Service; Consulting; Accounting

23 Apr 2013
First Look

First Look: April 23

MIT Sloan Management Review Experiments in Open Innovation at Harvard Medical School By: Guinan, Eva C., Kevin J. Boudreau, and Karim R. Lakhani Abstract—Harvard Medical School seems an unlikely organization to open up its innovation process. By most measures, the more... View Details

Keywords: Sean Silverthorne

11 Sep 2007
First Look

First Look: September 11, 2007

Many deliver disappointing performances. Companies can avoid this scenario, contends Joseph Bower in The CEO Within. Drawing on a decade's research (including interviews with leading CEOs) and experience managing the succession process,... View Details

Keywords: Martha Lagace

September 2018
Article

Aggregation of Consumer Ratings: An Application to Yelp.com

By: Weijia Dai, Ginger Jin, Jungmin Lee and Michael Luca

Because consumer reviews leverage the wisdom of the crowd, the way in which they are aggregated is a central decision faced by platforms. We explore this "rating aggregation problem" and offer a structural approach to solving it, allowing for (1) reviewers to vary in... View Details

Keywords: User Generated Content; Crowdsourcing; Yelp; Social and Collaborative Networks; Information; Internet and the Web; Learning; Mathematical Methods; E-commerce

January 2008
Background Note

Index Options

By: Joshua Coval and Erik Stafford

The goal of this simulation is to understand the patterns in index option prices that are not predicted by the Black-Scholes model. In particular, the simulation focuses on two properties of options prices. First, at-the-money implied volatilities from index options... View Details

Keywords: Volatility; Stock Options; Investment; Price; Profit; Risk Management; Mathematical Methods

Educators

January 2002 (Revised October 2007)
Case

Grantham, Mayo, Van Otterloo & Co., 2001

By: Joshua Musher and Andre F. Perold

Asset manager GMO underperforms the market during the 1996-2000 stock market bubble because of the focus on absolute risk. After suffering significant client withdrawals, performance again shines when the bubble collapses. Did they win the battle only to lose the war?... View Details

Keywords: Customers; Asset Management; Stocks; Investment; Price Bubble; Mathematical Methods; Risk and Uncertainty

Educators

October 1993 (Revised August 1996)
Background Note

Forecasting with Regression Analysis

By: Arthur Schleifer Jr.

Provides an example of regression in one of its most important roles. Relating probabilistic forecasts based on past data to decision analysis. View Details

Keywords: Management Analysis, Tools, and Techniques; Analytics and Data Science; Forecasting and Prediction; Mathematical Methods

Educators

2009
Working Paper

Input Constraints and the Efficiency of Entry: Lessons from Cardiac Surgery

By: David M. Cutler, Robert S. Huckman and Jonathan T. Kolstad

Prior studies suggest that, with elastically supplied inputs, free entry may lead to an inefficiently high number of firms in equilibrium. Under input scarcity, however, the welfare loss from free entry is reduced. Further, free entry may increase use of high-quality... View Details

Keywords: Health Care and Treatment; Market Entry and Exit; Duopoly and Oligopoly; Government Legislation; Mathematical Methods; Health Industry; Pennsylvania

2010
Working Paper

The Unbundling of Advertising Agency Services: An Economic Analysis

By: Mohammad Arzaghi, Ernst R. Berndt, James C. Davis and Alvin J. Silk

We address a longstanding puzzle surrounding the unbundling of services occurring over several decades in the U.S. advertising agency industry: What accounts for the shift from bundling to unbundling of services and the slow pace of change? Using Evans and Salinger's... View Details

Keywords: Advertising; Change; Forecasting and Prediction; Cost; Price; Analytics and Data Science; Surveys; Marketing Strategy; Media; Service Operations; Agency Theory; Mathematical Methods; Advertising Industry; United States

02 Jan 2019
What Do You Think?

SUMMING UP: Do We Need an Artificial Intelligence Czar?

strategy on artificial intelligence research and development ” As he put it, “DARPA is a government agency responsible for developing and deploying weapons for war fighters of the future. We need CARPA—the Cyberhealth Advanced View Details

Keywords: by James Heskett; Technology

11 Dec 2006
Research & Ideas

Fixing Price Tag Confusion

data on when such exploded prices work best. We asked Wathieu to discuss his research. Sean Silverthorne: As you note in the paper, a number of recent studies have concluded that the way price information is presented (price framing) often influences perceptions of... View Details

Keywords: by Sean Silverthorne; Retail

30 May 2005
Research & Ideas

Germany’s Pioneering Corporate Managers

this interview he discusses the development of the German corporation and what modern managers can learn from that history. The book was edited by Thomas K. McCraw, the Isidor Straus Professor of Business History at HBS, and was View Details

Keywords: by Sean Silverthorne

2009
Working Paper

When Does Domestic Saving Matter for Economic Growth?

By: Philippe Aghion, Diego A. Comin, Peter Howitt and Isabel Tecu

Can a country grow faster by saving more? We address this question both theoretically and empirically. In our theoretical model, growth results from innovations that allow local sectors to catch up with frontier technology. In poor countries, catching up requires the... View Details

Keywords: Developing Countries and Economies; Economic Growth; Entrepreneurship; Foreign Direct Investment; Saving; Technological Innovation; Mathematical Methods

July 2006
Article

Dynamic Mixed Duopoly: A Model Motivated by Linux vs. Windows

By: Ramon Casadesus-Masanell and Pankaj Ghemawat

This paper analyzes a dynamic mixed duopoly in which a profit-maximizing competitor interacts with a competitor that prices at zero (or marginal cost), with the cumulation of output affecting their relative positions over time. The modeling effort is motivated by... View Details

May 2009 (Revised December 2009)
Teaching Note

Reliance Baking Soda: Optimizing Promotional Spending (Brief Case)

By: John A. Quelch and Heather Beckham

Teaching Note to Briefcase 4128 View Details

Keywords: Quantitative Analysis; Consumer Marketing; Marketing Planning; Product Management; Sales Promotions; Program Budgeting; Marketing Strategy; Marketing Channels; Mathematical Methods; Advertising; Budgets and Budgeting; Product Marketing; Communication Strategy

2007
Working Paper

Optimal Reserve Management and Sovereign Debt

By: Laura Alfaro and Fabio Kanczuk

Most models currently used to determine optimal foreign reserve holdings take the level of international debt as given. However, given the sovereign's willingness-to-pay incentive problems, reserve accumulation may reduce sustainable debt levels. In addition, assuming... View Details

Keywords: Sovereign Finance; Borrowing and Debt; Financial Liquidity; International Finance; Emerging Markets; Mathematical Methods

Fourth Quarter 2007
Article

Contingent Claims Approach to Measuring and Managing Sovereign Credit Risk

By: Dale . F. Gray, Robert C. Merton and Zvi Bodie

This paper proposes a new approach to measure, analyze, and manage sovereign risk based on the theory and practice of modern contingent claims analysis (CCA). The paper provides a new framework for adapting the CCA model to the sovereign balance sheet in a way that can... View Details

Keywords: Credit; Investment; Sovereign Finance; Risk Management; Emerging Markets; Market Transactions; Mathematical Methods; Valuation