Publications

November 2012 (Revised April 2013)
Case

Konys, Inc.

By: Deishin Lee and Tunay I. Tunca

This case describes the sourcing policy for a consumer electronics company. The company must decide how to structure contracts with their supplier—using a purchase contract, an option contract, or combination of the two. The company can also buy from the spot market.... View Details

Keywords: Option Contract; Uncertainty; Sourcing; Supplier Relationship; Risk and Uncertainty; Contracts; Supply Chain; Consumer Products Industry; Electronics Industry

Educators

April 2013
Teaching Note

Konys, Inc. (TN)

By: Deishin Lee and Tunay Tunca

This case describes the sourcing policy for a consumer electronics company. The company must decide how to structure contracts with their supplier—using a purchase contract, an option contract, or combination of the two. The company can also buy from the spot market.... View Details

Keywords: Contracts; Option Contract; Uncertainty; Sourcing; Supplier Relationship; Supply Chain

January 2001 (Revised August 2003)
Case

Diageo plc

A major U.K.-based multinational is reevaluating its leverage policy as it restructures its business. The treasury team models the tradeoffs between the benefits and costs of debt financing, using Monte Carlo simulation to estimate the savings from the interest tax... View Details

Keywords: Cost vs Benefits; Multinational Firms and Management; Capital Structure; Restructuring; United Kingdom

Educators

2024
Working Paper

Incorporating Micro Data into Differentiated Products Demand Estimation with PyBLP

We delineate a general framework for incorporating many types of micro data from summary statistics to full surveys of selected consumers into Berry, Levinsohn, and Pakes (1995) style estimates of differentiated products demand systems. We extend recommended practices... View Details

Research Summary

Heteroskedasticity Autocorrelation Consistent Covariance Matrix Estimation with Wavelets

I propose a new HAC estimator based on the wavelet representation of the spectral density. Whereas kernel-based HAC estimators [e.g. Newey West (1987) Andrews (1991)] have a fixed bandwidth, a wavelet estimator has bandwidths that vary across wavelet resolution... View Details

Article

Best Practices for Differentiated Products Demand Estimation with PyBLP

Differentiated products demand systems are a workhorse for understanding the price effects of mergers, the value of new goods, and the contribution of products to seller networks. Berry, Levinsohn, and Pakes (1995) provide a flexible random coefficients logit model... View Details

2016
Working Paper

Entrepreneurship and Public Health Insurance

By: Gareth Olds

I examine the relationship between public health insurance and firm formation. Developing a variant of regression discontinuity, I find the Child Health Insurance Program lowered the child uninsured rate by 40% and increased self-employment by 15%. Monte Carlo evidence... View Details

Keywords: Insurance; Entrepreneurship

January 2021
Case

The FIRE Savings Calculator

By: Michael Parzen and Paul Hamilton

This case follows Carol Muñoz, a member of the Financial Independence, Retire Early (FIRE) lifestyle movement. At the age of 45, Carol is considering retiring and living off the $1 million she has accumulated. Using Monte Carlo simulation, Carol forecasts the... View Details

Keywords: Analysis; Forecasting and Prediction; Financial Strategy; Investment Portfolio; Investment Return; Personal Finance; Saving; Risk and Uncertainty; Diversification; Theory; Personal Development and Career; Financial Services Industry

Educators

February 2003 (Revised October 2004)
Background Note

Antamini Simulation Model

By: Peter Tufano

Antamini is a simulation of the value of an investment project whose outcome is uncertain. This case describes the situation facing a natural resource firm as it contemplates bidding on a copper mine in Peru. The bidder faces uncertainties about the ore deposit size... View Details

Keywords: Valuation; Auctions; Investment; Mining; Mining Industry; Peru

2016
Working Paper

Food Stamp Entrepreneurs

By: Gareth Olds

This paper explores how eligibility for the Supplemental Nutrition Assistance Program (SNAP, formerly known as the Food Stamps Program) affects firm formation. Using a variety of identification strategies, I show that expanded SNAP eligibility in the mid-2000s... View Details

Keywords: Entrepreneurship; Welfare or Wellbeing

November 2019
Article

How Do Sales Efforts Pay Off? Dynamic Panel Data Analysis in the Nerlove-Arrow Framework

By: Doug J. Chung, Byungyeon Kim and Byoung G. Park

This paper evaluates the short- and long-term value of sales representatives’ detailing visits to different types of physicians. By understanding the dynamic effect of sales calls across heterogeneous physicians, we provide guidance on the design of optimal call... View Details

Keywords: Nerlove-Arrow Framework; Stock-of-goodwill; Dynamic Panel Data; Serial Correlation; Instrumental Variables; Sales Effectiveness; Detailing; Analytics and Data Science; Sales; Analysis; Performance Effectiveness; Pharmaceutical Industry

Article

Total Cost Control in Project Management via Satisficing

By: Joel Goh and Nicholas G. Hall

We consider projects with uncertain activity times and the possibility of expediting, or crashing, them. Activity times come from a partially specified distribution within a family of distributions. This family is described by one or more of the following details about... View Details

Keywords: Project Management; Time And Cost Control; Robust Optimization; Satisficing; Linear Decision Rule; PERT; Management; Cost Management; Projects

2023
Article

Balancing Risk and Reward: An Automated Phased Release Strategy

By: Yufan Li, Jialiang Mao and Iavor Bojinov

Phased releases are a common strategy in the technology industry for gradually releasing new products or updates through a sequence of A/B tests in which the number of treated units gradually grows until full deployment or deprecation. Performing phased releases in a... View Details

Keywords: Product Launch; Mathematical Methods; Product Development

Article

Statistical Physics of Human Cooperation

By: Matjaž Perc, Jillian J. Jordan, David G. Rand, Zhen Wang, Stefano Boccaletti and Attila Szolnoki

Extensive cooperation among unrelated individuals is unique to humans, who often sacrifice personal benefits for the common good and work together to achieve what they are unable to execute alone. The evolutionary success of our species is indeed due, to a large... View Details

Keywords: Human Cooperation; Evolutionary Game Theory; Public Goods; Reward; Punishment; Tolerance; Self-organization; Pattern Formation; Cooperation; Behavior; Game Theory

2010
Working Paper

Substitution Patterns of the Random Coefficients Logit

By: Thomas J. Steenburgh and Andrew Ainslie

Previous research suggests that the random coefficients logit is a highly flexible model that overcomes the problems of the homogeneous logit by allowing for differences in tastes across individuals. The purpose of this paper is to show that this is not true. We prove... View Details

Keywords: Decision Choices and Conditions; Mathematical Methods; Behavior; Prejudice and Bias

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