Publication records

This paper examines the effect of status loss on organizations’ price-setting behavior. We predict, counter to current status theory and aligned with performance feedback theory, that a status decline prompts certain organizations to charge higher prices and that there are two kinds of organizations most prone to make such price increases: those with broad appeal across disconnected types of customers and those whose most strategically similar rivals have charged high prices previously. Using panel data from U.S. News & World Report’s annual rankings of private colleges and universities from 2005 to 2012, we model the effect of drops in rank that take a school below an aspiration level. We find that schools set tuition higher after a sharp decline in rank, particularly those that appeal widely to college applicants and whose rivals are relatively more expensive. This study presents a dynamic conception of status that differs from the prevailing view of status as a stable asset that yields concrete benefits. In contrast to past work that has assumed that organizations passively experience negative effects when their status falls, our results show that organizations actively respond to status loss. Status is a performance related goal for such producers, who may increase prices as they work to recover lost ground after a status decline.

With permission of Sage

A comprehensively updated revision of a book regarded by many as one the leading and authoritative titles for practitioners, academics and students in the domain of information systems and technology (IS/IT) strategy. Presents a structured framework with tools, techniques and ways of thinking which provide a practical approach to building a digital strategy, expressed primarily in the language of business and management. Brings together the implications of the significant advances in IT and the most useful current thinking, research, and experiences concerning the business impact and strategic opportunities created by IS/IT. Peppard and Ward discuss the key questions that managers have to grapple with of where, when and how to invest in IS/IT, which is why a IS/IT (or digital) strategy is required.

This paper studies the design of voluntary disclosure regulations for a firm that faces a stochastic environmental hazard. The occurrence of such a hazard is known only to the firm. The regulator, if finding a hazard, collects a fine and mandates the firm to perform costly remediation that reduces the environmental damage. The regulator may inspect the firm at any time to uncover the hazard. However, because inspections are costly, the regulator also offers a reward to the firm for voluntarily disclosing the hazard. The reward corresponds to either a subsidy or a reduced fine, depending on whether it is positive or negative. Thus, the regulator needs to dynamically determine the reward and inspection policy that minimizes expected societal cost in the long run. We model this problem as a dynamic adverse selection problem with costly state verification in continuous time. Despite the complexity and generality of this setup, we show that the optimal regulation policy follows a very simple cyclic structure, which we fully characterize in closed form. Specifically, the regulator runs scheduled inspections periodically. After each inspection, the reward level decreases over time until a subsequent inspection takes place. If a hazard is not revealed, the reward level is reset to a high level, restarting the cycle. In contrast to the reward level, the mandated remediation level is constant over time. Nonetheless, when subsidies are not allowed in the industry, we show that the regulator should dynamically adjust this remediation level, which then acts as a substitute for a subsidy. Our analysis further reveals that optimal inspection frequency increases not only when the inspection accuracy decreases, but also when the penalty for not disclosing the hazard increases.

© 2016 INFORMS

Many industries, including consumer electronics and telecommunications equipment, are characterized with
short product life-cycles, constant technological innovations, rapid product introductions, and fast obsolescence. Firms in such industries need to make frequent design changes to incorporate innovations, and the
effort to keep up with the rate of technological change often leaves little room for the consideration of product
reuse. In this paper, we study the design for reusability and product reuse decisions in the presence of both
a known rate of incremental innovations and a stochastic rate of radical innovations over time. We formulate
this problem as a Markov Decision Process. Our steady-state results confirm the conventional wisdom that a
higher probability of radical innovations would lead to reductions in the firm's investments in reusability as
well as the amount of reuse the firm ends up doing. Interestingly, the design for reusability decreases much
more slowly than the actual reuse. We identify some specific scenarios, however, where there is no tradeoff
between the possibility of radical innovations and the firms reusability and reuse decisions. Based on over
425,000 problem instances generated over the entire range of model parameters, we also provide insights
into the negative impact of radical innovations on firm profits, but show that the environmental impact of
increased radical innovation is not necessarily negative. Our results also have several implications for policy
makers seeking to encourage reuse.

Diese Studie untersucht Trends in der Rekommunalisierung in der Entsorgungswirtschaft in Deutschland, analysiert mögliche Erklärungsansätze und überprüft diese empirisch. Wir finden Hinweise auf eine Rekommunalisierungsspirale: Kommunalisierung in der Vergangenheit verstärkt die Anreize für Kommunen zur Kommunalisierung in der Zukunft. Dies liegt, so unsere Vermutung, zum einen an „Ausstrahlwirkungen“ von benachbarten Kommunen, zum anderen an der sinkenden kommerziellen Attraktivität privater Angebote in einem schrumpfenden Wettbewerbsmarkt. Damit können von der Option der kommunalen Eigenerstellung wettbewerbliche Effekte ausgehen. Auf Basis der empirischen Ergebnisse schlägt diese Studie einen Test vor, ob Kommunen die Möglichkeit und den Anreiz zur Rekommunalisierung haben, um zu prüfen, ob die Option der kommunalen Eigenerstellung wettbewerbliche Effekte haben kann.

We study a contract change for tea pluckers on an Indian plantation, with a higher government-stipulated baseline wage. Incentive piece rates were lowered or kept unchanged. Yet, in the following month, output increased by 20 to 80 percent. This response contradicts the standard model and several variants, is only partly explicable by greater supervision, and appears to be "behavioral." But in subsequent months, the increase is comprehensively reversed. Though not an unequivocal indictment of "behavioral" models, these findings suggest that nonstandard responses may be ephemeral, and should ideally be tracked over an extended period of time.

Copyright © 2016 by the American Economic Association.