Publication database

The literature on resource allocation under adverse selection has focused on models in which the resource being allocated is such that the privately informed agent always prefers more of it to less. We analyze a firm’s optimal resource allocation mechanism when this assumption does not hold and show that the resulting mechanism has a number of novel characteristics. For example, first best may be achievable even with nontrivial information asymmetry; when first best cannot be achieved, it is always optimal to overinvest relative to first best, and the most efficient agent may not earn rents, even when a less efficient agent does.

© 2020, INFORMS

We consider a setting where online advertisers seek to acquire impressions from an advertising exchange through a multi-tier network of intermediaries, and study the mechanisms offered by the ad exchange and intermediaries when the advertisers’ values are private. As opposed to traditional manufacturer/retailer settings, intermediaries in display advertising auction off contingent goods which they only purchase when downstream buyers have signaled interest. Thus motivated, we determine how intermediaries should bid on behalf of their customers in the mechanism of an upstream intermediary and study how the structure of the intermediation network affects the profits of its participants. We provide a game theoretic model to study the mechanisms offered by the ad exchange and intermediaries within a practically relevant class of mechanisms. We characterize a subgame perfect equilibrium of the game among intermediaries and the seller, and show that the equilibrium mechanisms have a simple and appealing structure: intermediaries bid the virtual value associated with the maximum downstream report in the upstream intermediary’s mechanism, whenever this quantity is positive. We show that economic incentives are not necessarily aligned along the network and the position in the intermediation network has a significant impact on the profits of the intermediaries. Besides, we analyze the impact of different network structures on the seller’s revenue and investigate whether intermediaries have an incentive to merge horizontally or vertically.

Copyright © 2020, INFORMS

Automation Surprise or Ambiguous Cockpit Information manifests itself as a miscommunication between man and machine and may lead to serious incidents and accidents. Focusing on factual communication between crew members as well as using training scenarios that specifically address the lesser known, less critical malfunctions may prepare pilots for dealing with losses in automation.

With permission of the German Armed Forces Aviation Office (Luftfahrtamt der Bundeswehr)

From pandemics to populism, new weapons to the rise of artificial intelligence, and gaping inequalities to climate change, humanity faces unprecedented challenges that threaten our very existence. In FRAMERS: Human Advantage in an Age of Technology and Turmoil, the authors offer a reason to be optimistic: humans have a unique ability to frame—or think in mental models—and so come up with solutions that meet our moment in history.

To frame is to make a mental model that enables us to see patterns, predict how things will unfold, and make sense of new situations. Frames guide the decisions we make and the results we attain. People have long focused on traits like memory and reasoning leaving framing all but ignored. But with computers becoming better at some of those cognitive tasks, framing stands out as a critical function—and only humans can do it. This book is the first guide to mastering this innate human ability.
Framers shows how framing is not just a way to improve how we make decisions in the era of algorithms—but why it will be a matter of survival for humanity in a time of societal upheaval and machine prosperity.

The article examines the first decisions issued by Facebook's newly established Oversight Board that deal with the exacerbating problem of health misinformation. In this context, it is questioned whether the Board's applied standard of 'imminent harm' is suitable for the problem at hand given the viral proliferation of potentially consequential false and misleading information about public health policies amid a pandemic.

Taking on a substantial new role without a change in title or authority is hard, but there are ways to manage this transition.

In an age where manufacturers are challenged to increase production with fewer resources and get their finished products to market sooner, mature manufacturing systems envisioned by I4 promise to rev up production lines, help turn out goods faster, and crunch delivery times and cost .

Research Summary
Whereas prior innovation and strategy literature studied how attentional and search dynamics influence the creation of inventions, we examine how these same processes affect the impact of inventions after their creation. We theorize that inventions classified in “high‐contrast” technological categories garner more attention by potential users and, hence, accrue more citations than otherwise‐equivalent inventions classified in “low‐contrast” categories. We test this hypothesis via three studies. First, we estimate citation‐count models among all USPTO patents granted between 1975 and 2010. Second, we conduct a “twin patents” test comparing inventions patented both at the USPTO and at the EPO. Third, we examine minute‐by‐minute search logs from a sample of USPTO examiners. These studies support our hypothesis and extend current understandings of attentional and search dynamics in the innovation process.

Managerial Summary
Patents that receive more citations tend to have greater economic value and greater impact on future technological developments. We show that the number of citations a patent receives does not only depend on its inherent technological value, but also on seemingly neutral classification decisions affecting the likelihood that it will be noticed by potential future users. We test our arguments via three related studies. Our results demonstrate that inventions classified in “high‐contrast” technology classes garner considerably more attention – and hence citations – than twin‐inventions classified in “low‐contrast” classes. The key managerial implication is that, whenever feasible, nudging an invention towards higher‐contrast classes will increase its future worth. The key policy implication is that maximizing categorical contrast across technology classes will help users identify relevant prior patents.

© 2021 Strategic Management Society

This paper sheds fresh light on our 2010 paper How Open Is Innovation by taking into consideration notable developments in innovation over the last decade. The original paper developed four types of openness: sourcing, acquiring, selling, and revealing. Reflecting on important technological, organizational, and societal changes in the past decade, we highlight how these changes prompt novel questions for open innovation. While the core features of the original framework still stands, there are many new questions that have emerged in recent years. We end by chartering a path for future research that emphasizes opportunities, costs and tradeoffs between different modes of open innovation, the need to better understand the nature of data, new organizational designs and legal instruments, and multilevel aspects and relationships that affect the extent and nature of openness.

With permission of Elsevier