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We suggest foundations for the Shapley value and for the naïve solution, which assigns to any player the difference between the worth of the grand coalition and its worth after this player left the game. To this end, we introduce the decomposition of solutions for cooperative games with transferable utility. A decomposer of a solution is another solution that splits the former into a direct part and an indirect part. While the direct part (the decomposer) measures a player's contribution in a game as such, the indirect part indicates how she affects the other players' direct contributions by leaving the game. The Shapley value turns out to be unique decomposable decomposer of the naïve solution.

With permission of Elsevier

While consumers and marketers perpetuate the lay theory that indulging with a reason is more pleasurable and makes everyone happier, this research identifies a condition under which indulging without a reason “feels right” and produces a more positive emotional reaction. The authors show that indulging with or without a reason and consumers’ trait self-control interact to influence happiness felt following an indulgent purchase. While high self-control consumers are happier when they have a reason to buy indulgent products (e.g., when they can justify the indulgence), low self-control consumers are happier when they do not have a reason to indulge, compared to when they have a reason. That is, indulging with a reason is less pleasurable for consumers with low self-control. This effect on happiness has an impact on downstream judgments about the product and yields important implications for consumer welfare as well as marketing managers. Across four studies we show the effect on consumption happiness, examine consequences of the effect, and report evidence for the underlying process.

With permission of Elsevier

While many organizations talk the talk of sustainability — doing things like integrating environmental and societal concerns into their business models — very few walk the walk. Unsurprisingly, carbon emissions by the world’s largest companies are increasing, and only one-third of the 600 largest companies in the U.S. have any systematic sustainability oversight at the board level. Based on interviews with CEOs and other executives, companies that are winning the sustainability battle have created the conditions for their stakeholders to own sustainability. In these companies, sustainability is not someone else’s problem. A three-phase model of incubation, launching, and entrenching can help companies move beyond rhetoric and take ownership of sustainability.

We link the hiring of R&D scientists from industry competitors to the subsequent formation of collaborative agreements, namely technology-oriented alliances. By transferring technological knowledge as well as cognitive elements to the hiring firm, mobile inventors foster the alignment of decision frames applied by potential alliance partners in the process of alliance formation thereby making collaboration more likely. Using data on inventor mobility and alliance formation amongst 42 global pharmaceutical firms over 16 years, we show that inventor mobility is positively associated with the likelihood of alliance formation in periods following inventor movements. This relationship becomes more pronounced if these employees bring additional knowledge about their prior firm’s technological capabilities and for alliances aimed at technology development rather than for agreements related to technology transfer. It is weakened, however, if the focal firm is already familiar with the competitor’s technological capabilities. By revealing these relationships, our study contributes to research on alliance formation, employee mobility, and organizational frames.

 

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The report gives an overview on the current situation on cybersecurity and the political handling of that topic. It also recaps the goals and failures of the last four years and recommends action areas.

We study the capacity choice problem of a firm, whose access to capital is hampered by financial frictions, i.e., moral hazard. The firm optimizes both its capacity investment under demand uncertainty and its sourcing of funds from a competitive investor. Ours is the first study of this problem to adopt an optimal contracting approach: feasible sources of funds are derived endogenously from fundamentals and include standard financial claims (debt, equity, convertible debt, etc.). Thus, in contrast to most of the literature on financing capacity investments, our results are robust to a change of financial contract. We characterize the optimal capacity level under optimal financing. First, we find conditions under which a feasible financial contract exists that achieves first-best. When no such contract exists, we find that under optimal financing, the choice of capacity sometimes exceeds strictly the efficient level. Further, the firm invests more when its cash is low, and in some cases less when the project’s unit revenue is high. These results run counter to the newsvendor logic and standard finance arguments. We also show that our main results hold in the case of a strategic monopolist investor, and such an investor may invest more than a competitive one.

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