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In this article, the author discusses various topics related to publication of the journal. Topics include changes in research areas of management science such as analytics; criteria for submission of research papers to the journal, such as research relevant to the management science community; and different departments related to selection of papers, like departments of Behavioral Economics, and Judgment and Decision Making.

The article discusses points contained in the research papers of mathematician L.V. Kantorovich. There is little in either the Soviet or the Western literature in management, planning, or economics available in 1939 that could have served as a source for the ideas in this paper, in the concrete form in which they were presented. From its own internal evidence, the paper stands as a highly original contribution of the mathematical mind to problems which few at that time would have perceived as mathematical in nature-on a par with the earlier work of von Neumann on proportional economic growth in a competitive market economy, and the later work of Dantzig well known to readers of Management Science. Recently Kantorovich has published a book, "Economic Calculation of the Best Utilization of Resources," in which it is proposed that linear programming methods be applied in nationwide planning for the Soviet economy. This has already given rise to a lively debate in Russian economic and planning periodicals.

This paper examines the relationship between one form of manufacturing flexibility--process range--and structure, infrastructure, and managerial policy at the plant level. The paper provides evidence of the strength of the links between manufacturing flexibility and such factors as scale, technology vintage, computer integration, and workforce management. Data from 54 plants in the fine-paper industry are presented, and a model of the determinants of short-term flexibility is developed. The plants examined differed by a factor of 20 in their ability to accommodate large process variation. The evidence suggests that flexibility is strongly negatively related to scale and degree of computer integration, yet positively related to newer vintages of mechanical technology and workforce experience. Some results differ significantly from the prevailing view of the industry, in particular, that newer plants are less flexible. The paper shows that newer machine technology is more flexible once other factors are controlled for. In the longer term, the results show that management has a significant impact on the improvement of flexibility in operations, regardless of the technology and infrastructure in place. Plant network managers' views of flexibility are important. The data suggest that inflexible plants may be inflexible partly as a result of their being considered inflexible by network managers, and never being assigned the product range needed to improve the capability. [ABSTRACT FROM AUTHOR]

This paper addresses primarily two questions. First, when (and why) should a company's strategy be developed by its CEO versus by some outside analyst or other insider? Second, how does strategy interact with vision (in the sense of a strong belief about the right course of action)? The paper studies these questions using a functional definition of strategy as "the smallest set of choices to optimally guide other choices." Among other things, the paper shows that strategy formulation by the CEO leads to both better strategy and better execution, and that a strategist's vision may improve execution. In the process, the paper also identifies criteria that make a decision strategic and derives explanations why strategies often reflect the background of the strategist. This paper was accepted by Bruno Cassiman, business strategy. [ABSTRACT FROM AUTHOR]

The article presents statements from the the editors of the various departments of the scholarly journal "Management Science," including the departments of Business Strategy, Entrepreneurship and Innovation, and Operations Management, concerning the types of papers and research they seek to publish in the journal.

This year marks the 50th anniversary of Management Science. We take this opportunity to trace the history of the Marketing Department in Management Science, outline the role that the Marketing Department has played in supporting management science research in Marketing, its impact on the field, and its plans for the future. [ABSTRACT FROM AUTHOR]

The article discusses editorial policy for healthcare management research papers submitted to the journal, citing the department's focus on how to better organize and manage the delivery of healthcare services, and mentions need of context-specific and problem-oriented research.

What makes a decision strategic? When is strategy most important? This paper formally studies these questions, starting from a (functional) definition of strategy as the smallest set of choices to optimally guide (or force) other choices. The paper shows that this definition coincides with the equilibrium outcome of a 'strategy formulation game,' in which such strategy endogenously creates a hierarchy among decisions. With respect to what makes a decision strategic and what makes strategy valuable, the paper considers the effect of commitment, reliability, and irreversibility of a decision; the presence of uncertainty (and the type of uncertainty); the number and strength of its interactions and the centrality of a decision; its level and importance; the development of capabilities; and competition. This paper was accepted by Bruno Cassiman, business strategy. [ABSTRACT FROM AUTHOR]

We examine whether the Environmental Protection Agency (EPA) uniformly enforces the Clean Air Act for politically connected and unconnected firms using a close election setting. We find no difference in regulated pollutant emissions or EPA investigations between the two groups, although connected firms experience less regulatory enforcement and lower penalties. These results are more pronounced for firms connected to politicians capable of influencing regulatory bureaucrats and for connected firms that are more important to their supported politicians. Taken together, our results show that campaign contributions can indirectly benefit firms by way of reduced environmental regulatory enforcement and penalties. This paper was accepted by Colin Mayer for the Special Issue of Management Science: Business and Climate Change. Supplemental Material: The data files and online appendix are available at https://doi.org/10.1287/mnsc.2020.3931. [ABSTRACT FROM AUTHOR]

An editorial is presented on the intersection of accounting with risk management, data science, finance, entrepreneurship and marketing. Topics mentioned include the integration of mathematical theory with data analysis related to accounting, the submission of accounting papers in the journal and the importance of an appropriate fast track process for accounting.

The article discusses the editorial policy for research papers on management of operations and organization of businesses submitted to the journal, citing the department's focus on areas such as dynamics of groups and teams, and mentions interests in identifying novel mechanisms or processes.

This paper reports some research, ideas, and theory about managerial decision making. The first research projects dealt with are aggregate production and employment scheduling. From this is developed the idea that management's own (past) decisions can be incorporated into a system of improving their present decisions. Decision rules are developed, with the coefficients in the rules derived from management's past decisions (rather than from a cost or value model). Half a dozen test cases are used to illustrate and test these ideas (theory). Some rationale about decision making in organizations and criteria surfaces is supplied to help interpret the major ideas presented. [ABSTRACT FROM AUTHOR]

Commentary is presented for an article published in the July 1960 issue of "Management Science," written by L. V. Kantorovich with an introductory note by T. C. Koopmans. According to the author, in his introduction Koopmans addresses in particular a linear programming problem and a matrix game presented by Kantorovich. Also presented is an interpretation of the article's treatment of decision variables and mathematical optimization. The author notes that the article presents algorithms that have been improved from their contemporary presentations.

The article discusses the editorial policy for research papers on optimization related to business management submitted to the journal, citing the department's focus on areas such as convex optimization, general-purpose nonlinear optimization; along with applications of optimization methods.

The paper "Asymmetric Information, Incentives and Intrafirm Resource Allocation," by Harris, Kriebel, and Raviv, was published in the June 1982 issue of Management Science. In this article, written as part of this journal's 50-year anniversary celebration, we highlight the significance of the Harris et al. paper for research in managerial accounting. We first formulate and solve a continuous version of the Harris et al. model to illustrate the key assumptions and findings of their paper. We then review several strands of the resource-allocation literature in managerial accounting that have taken their inspiration, either directly or indirectly, from the work of Harris et al. [ABSTRACT FROM AUTHOR]

Zero inventory (ZI) and the related concepts of Just in Time and Kanban are innovative and powerful means to improve production efficiency. This paper applies these concepts to a series facility production system and, in particular, identifies which facilities will never hold inventory irrespective of product demand. Pinpointing beforehand that certain facilities will have no inventory can simplify such strategic decisions as facility design, site location, and space utilization, plus it eases production scheduling. Next, a procedure is developed which increases the number of facilities that will never hold inventory. This procedure implements the ZI philosophy of cutting set up costs to increase efficiency. The results of this paper impact three major areas of production research: (1) strategy and planning—by detecting beforehand facilities that need never hold inventory irrespective of demand; (2) operations—by simplifying day to day production scheduling; and (3) productivity improvement—by cutting set up costs to enhance efficiency. [ABSTRACT FROM AUTHOR]

This paper introduces a solution procedure for solving the project time/cost tradeoff problem of reducing a project duration at a minimum cost. The solution to the time/cost problem is achieved by locating a minimal cut in a flow network derived from the original project network. This minimal cut is then utilized to identify the project activities which should experience a duration modification in order to achieve the total project reduction. The paper will document this cut-based procedure and provide a practical application to a project situation. [ABSTRACT FROM AUTHOR]

This paper deals with the problem of a firm that searches the optimal location of plants under the following conditions: (1) Transport costs for delivery are incurred by the firm: transport costs between a plant and a customer are linear. (2) The customers' demands are known and have to be met; customers are scattered. (3) The possible plant locations are known. (4) The production cost, at each possible plant, may be divided into two parts: (a) a fixed charge supported only if there is some production: (b) a linear unit cost The rigorous treatment of the problem involves the production and transport costs' being minimized for each combination of plant locations. This paper presents an algorithm using the special features of the problem that reduces the number of combinations of plant locations to study. A heuristic method based on market simulation is also shown to work pretty well. [ABSTRACT FROM AUTHOR]

Although the comment provides some additional insight, it in no way diminishes the contribution of the original paper. That paper is the first and only theoretical explanation for why firms behave as though they use round prices to signal quality. Further, the paper provides empirical evidence in support of this explanation. [ABSTRACT FROM AUTHOR]

In some strategic alliances, a firm shares its manufacturing capacity with another, and the latter shares its distribution capacity with the former. Even though such bidirectional alliances have become more common, they remain challenging to manage because of the frequent disputes over capacity allocation, especially when demand is uncertain. In this paper, we investigate whether there exists a contractual mechanism that can mitigate the extent of these disputes while improving the profits of all participating firms. We consider two types of bidirectional contracts, namely, the ex post transfer payment contract and the ex ante capacity reservation contract. By modeling the capacity allocation and the bidirectional contract design as a noncooperative game between two firms with noncompeting product lines, we show that, relative to a situation with no contract, either contract can improve the alliance's total profit in equilibrium. In terms of distribution of the total surplus, we find that capacity reservation contracts always make both firms better off, whereas ex post transfer payment contracts may make one firm worse off. Hence, capacity reservation contracts are more likely to be implemented in practice in such bidirectional alliances. This paper was accepted by Gad Allon, operations management. [ABSTRACT FROM AUTHOR]

Why do firms manage risk? According to various theories, firms hedge to mitigate credit rationing, to alleviate information asymmetry, and to reduce the risk of financial distress. However, empirical support for these theories is mixed. Our paper addresses the "why" by directly asking the managers that make risk management decisions. Our results suggest that personal risk aversion in combination with other executive traits plays a key role in hedging. Our analysis also indicates that risk-averse executives are more likely to rely on (more conservative) fat-tailed distributions to estimate risk exposure. While most theories of risk management ignore the human dimension, our results suggest that managerial traits play an important role. This paper was accepted by Karl Diether, finance. [ABSTRACT FROM AUTHOR]

This paper surveys the underlying theory and practice in the use of options in support of emerging business-to-business (B2B) markets. Such options, on both capacity and output, play an important role in integrating long-and short-term contracting between multiple buyers and sellers in such markets. This trend is especially important in capital-intensive industries, where improvements in fine tuning the coordination of supply and demand carry large economic benefits. Typically, such options are benchmarked (or defined) on the basis of spot market information conveyed through near real-time B2B transactions. This paper notes a broad set of goods and services currently being traded in both B2B short-run markets and long-term contract markets, and reviews economic and managerial frameworks that have been proposed to explain the structure of contracting in these markets. We provide a general framework based on transactions cost economics, and we use this framework to provide a review and synthesis of existing literature to explain various types of contracting linked to B2B exchanges in capital-intensive industries. The paper concludes with a discussion of implementation challenges and open research questions. [ABSTRACT FROM AUTHOR]

To date, the largest part of literature on multi-unit auctions has assumed that there are k homogeneous objects being auctioned, where each bidder wishes to win exactly one or all of k units. These modeling assumptions have made the examination of ordering in sequential auctions inconsequential. The aim of this paper is to introduce and highlight the critical influence that ordering can have on the efficiency of an auction. We study a buyer who outsources via sequential 2nd-price auctions two heterogeneous jobs, and faces a diverse set of suppliers with capacity constraints. [ABSTRACT FROM AUTHOR]

The article discusses various topics related to publication of the journal. It states that articles published in the journal deal with issues important to managers and executives; and are supposed to serve interests of people in the management science community. It mentions that proposals for reengineering of the journal, which includes measures like revamping departments, topics, and methodologies. It notes that the journal will consider shorter papers with high-impact research.

In this paper we compare various efficiency measures by investigating the sets that are termed efficient. [ABSTRACT FROM AUTHOR]

Due to the complexity of optimum replacement problems over finite time horizons various asymptotic criteria based upon fixed age replacement policies have been employed in the literature and in practice. In this paper the relationships between the optimum policies under three alternative cost criteria are considered. An ordering of the accounting costs under two of these is obtained, and for distributions with Increasing Hazard Rate an ordering of the optimum replacement time is derived. For a finite time horizon the policies are compared to the optimal sequential and fixed-age replacement polices through the example of a gamma distribution previously investigated by Barlow and Proschan (1962, 1965). [ABSTRACT FROM AUTHOR]

This paper presents a model of the strategic process concerning entrepreneurial activity in large, complex organizations. Previous empirical and theoretical findings can be integrated in this new conceptual framework. The paper makes the following key points. First, firms need both diversity and order in their strategic activities to maintain their viability. Diversity results primarily from autonomous strategic initiatives of participants at the operational level. Order results from imposing a concept of strategy on the organization. Second, managing diversity requires an experimentation-and-selection approach. Middle level managers play a crucial role in this through their support for autonomous strategic initiatives early on, by combining these with various capabilities dispersed in the firm's operating system, and by conceptualizing strategies for new areas of business. Third, top management's critical contribution consists in strategic recognition rather than planning. By allowing middle level managers to redefine the strategic context, and by being fast learners, top management can make sure that entrepreneurial activities will correspond to their strategic vision, retroactively. Fourth, strategic management at the top should be to a large extent concerned with balancing the emphasis on diversity and order over time. Top management should control the level and the rate of change rather than the specific content of entrepreneurial activity. Finally, new managerial approaches and innovative administrative arrangements are required to facilitate the collaboration between entrepreneurial participants and the organizations in which they are active. [ABSTRACT FROM AUTHOR]

This paper surveys work done to date on the problem of laying out the facilities of some system in terms of specifying which activities are to be adjacent. Each pair of facilities has a closeness rating which represents the desirability that they are located adjacently. Ratings are usually proportional to the flow of goods or people between facilities. The aim of the layout analyst is to design a system so that the sum of the ratings of adjacent pairs is maximized as this represents travel saved. This paper formulates the layout problem and reviews exact and heuristic methods of solution. In the literature review special emphasis is placed on the newly-emerging graph-theoretic techniques which appear promising. [ABSTRACT FROM AUTHOR]

A new method for solving the corrugator trim problem is presented. This problem draws its name from the difficult task facing scheduling personnel in corrugator box plants each day: to determine the least-cost method of combining customer orders on the corrugator, where one of the major costs to avoid is waste or excess trim lost from the materials used. Trim loss, however, is only one of several major concerns. Others include corrugator width utilization, cutting pattern changes, avoidance of split orders, and so on. A full discussion of these factors and associated trade-offs is included in the paper. The solution procedure presented is capable of dealing with these and other trade-offs in a systematic manner. In particular, this approach eliminates the spreading of orders over several stock sizes, a characteristic which has plagued the linear programming-based procedures that have been proposed for solving the problem. This improved material handling characteristic of the solution is obtained through the controlled generation of solution elements. These elements then become potential activities to be scheduled by a 0-1 integer programming algorithm. The algorithm used is well suited to computers of moderate size and speed. In addition to solving the corrugator trim problem, the proposed method has sufficient flexibility to make it a useful vehicle for solving similar problems in other industries which manufacture such products as glass, steel, composition board, and furniture. [ABSTRACT FROM AUTHOR]

This report is a sequel to our review paper, Lemoine [50], on the equilibrium analysis of networks of queues. In this paper we review some weak convergence results for networks of queues, which include heavy traffic limit theorems for open networks and asymptotic results for large closed Markovian systems which are generalizations of the classical repairman problem. These weak convergence results justify certain approximation schemes for processes of interest. We also discuss some important open problems in the area of weak convergence results for networks of queues, [ABSTRACT FROM AUTHOR]

Most of the published literature on planning is either prescriptive (i.e., what ought to be the way planning is done), or descriptive (i.e.. how it is actually carried out). This paper addresses the problem of moving from a relatively ineffective planning process to one that meets the prescriptive characteristics it theoretically ought to contain. The premise of the paper is that the conversion of a planning system needs as much planning as the process being planned. Hence, the short-hand title of "meta-planning". The argument is made for more research on meta-planning, some initial hypotheses are developed toward a theory of meta-planning, and an extensive case study is presented to show the credibility of the hypotheses. [ABSTRACT FROM AUTHOR]

We consider the situation of a family of items sharing a common supplier or common production facility. There is a major setup (header) cost to make a replenishment of the family and a minor (line) cost for each item included in the replenishment. In such a setting it makes sense to coordinate replenishments of the various items of a family. Under the assumption of deterministic demand, several authors have suggested iterative solutions which are not necessarily guaranteed to be optimal, yet are not easy to implement. We present an alternative procedure which is extremely simple to use, yet appears to have rather small cost penalties in relation to the earlier more sophisticated methods. [ABSTRACT FROM AUTHOR]

In the past few years, increasing numbers of automatic warehousing systems using computer-controlled stacker cranes have been installed. Our research concerns the scientific scheduling and design of these systems. There are three elements to scheduling: the assignment of multiple items to the same pallet (Pallet Assignment); the assignment of pallet loads to storage locations (Storage Assignment); and rules for sequencing storage and retrieve requests (Interleaving). This paper deals with optimal storage assignment. Results are obtained which compare the operating performance of three storage assignment rules: random assignment; which is similar to the closest-open-location rule used by many currently operating systems; full turnover-based assignment; and class-based turnover assignment. It is shown that significant reductions in crane travel time (and distance) are obtainable from turnover-based rules. These improvements can, under certain circumstances, be directly translated into increased throughput capacity for existing systems, and may be used to alter the design (e.g., size and number of racks, speed of cranes, etc.) of proposed systems in order to achieve a more desirable system balance between throughput and storage capacity. [ABSTRACT FROM AUTHOR]

This paper presents an algorithm for finding the K loopless paths that have the shortest lengths from one node to another node in a network. The significance of the new algorithm is that its computational upper bound increases only linearly with the value of K. Consequently, in general, the new algorithm is extremely efficient as compared with the algorithms proposed by Bock, Kantner, and Haynes [2], Pollack [7], [8], Clarke, Krikorian, and Rausan [3], Sakarovitch [9] and others. This paper first reviews the algorithms presently available for finding the K shortest loopless paths in terms of the computational effort and memory addresses they require. This is followed by the presentation of the new algorithm and its justification. Finally, the efficiency of the new algorithm is examined and compared with that of other algorithms. [ABSTRACT FROM AUTHOR]

The paper focuses on multi-stage production systems. If such a system is of the more general type than a production line and many products have to be manufactured according to different technological sequence restrictions then two problems arise: (1) scheduling and (2) sequencing. The formulation of that problem requires the simultaneous consideration of the scheduling and sequencing aspect. The paper integrates these two functions into one single model using zero-one programming. [ABSTRACT FROM AUTHOR]

Mixed-model assembly occurs when more than one model of the same general product are intermixed on one assembly line. The amount of work required to assemble units can vary from model to model, creating an uneven flow of work along the line. This paper describes a procedure of adapting single-model line balancing techniques to mixed-model schedules. The paper also introduces a sequencing procedure for determining the order in which models are to flow down the line. Because the line balancing and sequencing procedures consider a wide variety of factors, they are applicable to many types of assembly lines. [ABSTRACT FROM AUTHOR]

The paper presents a new type of learning function useful in describing how firms improve their performances in new processes. The function, termed the "adaptation function," is shown to be capable of being related to variables that may affect a firm's rate of learning. Next, these variables are discussed, and the adaptation function is fitted to some actual sets of data. Finally, the paper turns to some normative implications of the function. Specifically, the adaptation function is shown to be useful to firms in their budgeting of training and in aiding their equipment replacement decisions. [ABSTRACT FROM AUTHOR]

This paper calculates some of the operating characteristics of opportunistic replacement and inspection policies. An operating characteristic of a particular policy is a function defined on the stochastic process induced when the policy is implemented. An opportunistic replacement policy makes the replacement of a single uninspected part conditional on the state (good or failed) of one or more continuously inspected (monitored) parts. An opportunistic inspection policy makes the inspection of a non-monitored part conditional on the state (good or failed) of a monitored part. Some of the operating characteristics of these policies examined in this paper are: the expected rate of opportunistic (joint) replacement of the uninspected part and one of the monitored parts; the expected rate of planned replacement of the uninspected part; the probability of at least m failures of a monitored part in the interval [0, t]; the expected rate of opportunistic inspection — inspection of the non-monitored part which is triggered by a failure of the monitored part; and the expected rate of planned inspection of the non-monitored part. These operating characteristics are precisely the information needed to establish a suitable supply policy. They should also be helpful to the maintenance manager in his efforts to predict the relative frequencies of the various maintenance actions. As an example the opportunistic replacement policy is applied to the rocket engines of a hypothetical ballistic missile. Several operating characteristics are then computed and the sensitivity of these operating characteristics to changes in the rocket engine failure rate is exhibited. This illustrative analysis indicates that both the expected rate of opportunistic (joint) replacement of the rocket engines and re-entry vehicle and the expected rate of replacement of the rocket engines due to mandatory replacement are highly sensitive to changes in the rocket engine failure rate. On the other hand, the expected rate of opportunistic (joint) replacement of the rocket engines and the guidance and control system is relatively unaffected by changes in the engine failure rate. [ABSTRACT FROM AUTHOR]

The article discusses an industrial programming problem in the area of maximization of L. V. Kantorovich. According to the author, the problem presents a linear model of industrial production. The objective of the problem is the maximization of a non-linear function of the output. The author notes that optimal production programs can be characterized by Lagrange multipliers or shadow prices. Also noted is the fact that final products are ordered into a certain package, the size of which is to be as large as possible.

Conventional production scheduling makes use of a minimum cost production quantity. Since cost is relatively insensitive to the production quantity within some range of the minimum cost production quantity, substantial freedom of action can be given the production scheduler provided he stays within some defined range. This paper presents two approaches to defining such a range. One approach involves little computation but can be applied only to the simplest type of cost function. The other approach can be applied to any cost function, but is more difficult to compute. With either approach, precomputed tables can simplify the scheduling process on a near-optimum basis. [ABSTRACT FROM AUTHOR]

The relationship between a buyer and its suppliers often relies on factors beyond the terms of a contractual agreement. Buyers can therefore benefit from identifying trustworthy suppliers. We argue that precontractual actions by a supplier, for example making costly buyer-specific investments without a long-term contract, can signal a supplier’s trustworthiness. We develop a theoretical model to reflect supplier trustworthiness, and determine when a buyer can benefit from identifying trustworthy suppliers. We show that costly relationship-specific investments can serve as a signal of trustworthiness, and that supply chain profits increase when trustworthy suppliers are able to identify themselves in this fashion. We demonstrate the importance of the signaling mechanism using laboratory experiments. The experimental results show that relationship-specific investments lead to more collaborative transactions, with buyers offering higher prices and suppliers returning higher-quality products. This results in increased profits for both buyers and suppliers. Additionally, we design a treatment which shuts down the signaling mechanism and show that the benefits of the buyer-specific investment are no longer present in this case. Finally, we show that the benefits of buyer-specific investments for both suppliers and buyers are strengthened when firms interact repeatedly. Data and the online appendix are available at https://doi.org/10.1287/mnsc.2017.2817. This paper was accepted by Yossi Aviv, operations management. [ABSTRACT FROM AUTHOR]

First, this paper introduces and axiomatizes range-dependent utility as a new conceptual framework for decision making under risk. It is a simple and well-defined generalization of expected utility theory in which utility depends on the range of lottery outcomes. Second, a special case of this framework is proposed for prediction. It is based on applying a single utility function (decision utility) to every normalized lottery range. The resultant decision utility model predicts well-known expected utility paradoxes without recourse to probability weighting. Necessary and sufficient conditions for the model to satisfy monotonicity with respect to first-order stochastic dominance are identified. The typical decision utility function, which is confirmed by both experimental data and normative considerations, is S shaped. [ABSTRACT FROM AUTHOR]

This paper studies the effect of learning information on people's attitudes toward ambiguity. We propose a method to separate ambiguity attitudes from subjective probabilities and to decompose ambiguity attitudes into two components. Under models like prospect theory that represent ambiguity through nonadditive decisionweights, these components reflect pessimism and likelihood insensitivity. Under multiple priors models, they reflect ambiguity aversion and perceived ambiguity. We apply our method in an experiment wherewe elicit the ask prices of options with payoffs depending on the returns of initial public offerings (IPOs) on the New York Stock Exchange. IPOs are a natural context to study the effect of learning, as prior information about their returns is unavailable. Subjects perceived substantial ambiguity and they were insensitive to likelihood information. We observed only little pessimism and ambiguity aversion. Subjective probabilities were well calibrated and close to the true frequencies. Subjects' behavior moved toward expected utility with more information, but substantial deviations remained even in the maximum information condition. [ABSTRACT FROM AUTHOR]

Management has a large effect on the productivity of medium and large firms. But does management matter in micro and small firms, where the majority of the labor force in developing countries works? We develop 26 questions that measure business practices in marketing, stock-keeping, record-keeping, and financial planning. These questions have been administered in surveys in Bangladesh, Chile, Ghana, Kenya, Mexico, Nigeria, and Sri Lanka. We show that variation in business practices explains as much of the variation in outcomes-sales, profits, and labor productivity and total factor productivity-in microenterprises as in larger enterprises. Panel data from three countries indicate that better business practices predict higher survival rates and faster sales growth. The association of business practices with firm outcomes is robust to including numerous measures of the owner's human capital. We find that owners with higher human capital, children of entrepreneurs, and firms with employees employ better business practices. Data, as supplemental material, are available at . This paper was accepted by Toby Stuart, entrepreneurship and innovation. [ABSTRACT FROM AUTHOR]

This paper studies a manager's attempt to maximize his firm's discounted expected profits by choosing what strategic actions to select and what performance measurement system to employ in a setting where the manager is uncertain about what variables "drive" the firm's profits, the firm's profit drivers remain stationary over time, and strategic actions differ in the amount of information they produce about the firm's profit drivers. For each available performance measurement system, this paper identifies necessary and sufficient conditions for experimentation--that is, deviating from the firm's short-run expected profit-maximizing action--to be optimal. In addition, the paper determines what factors influence a firm's preferred performance measurement system, and it explains why the preferred performance measurement system is likely to change over time. [ABSTRACT FROM AUTHOR]

How organizations create, transfer, and retain knowledge has been the focus of intensive investigation by management researchers. However, one aspect of the dynamics of knowledge--organizational forgetting--has received comparatively little attention. In this paper, we draw on an exploratory, multiple-case study of learning in international strategic alliances to explore how and why organizations forget. Based on our case study, we develop a theory of organizational forgetting, discuss the role of forgetting in the dynamics of organizational knowledge, and present a typology of types of organizational forgetting. [ABSTRACT FROM AUTHOR]

In this paper, we present a branch-and-price method to solve special structured multistage stochastic integer programming problems. We validate our method on two different versions of a multistage stochastic batch-sizing problem (SBSP). One version adopts a recourse formulation, and the other is based on probabilistic constraints. Our algorithmic approach is applicable to both formulations. Our computational results suggest that both classes of problems can be solved using relatively few nodes of a branch-and-price tree. The success of our approach calls for extensions in methodology as well as applications. [ABSTRACT FROM AUTHOR]

Outcome prediction based on historical data has been of practical and theoretical interest in many disciplines. A common type of outcome prediction is binary or discrete outcome prediction, as found in medical diagnosis and firm bankruptcy prediction. The prediction problem studied in this paper is outcome time prediction, or prognosis. Prognosis in medicine refers to a prediction of probable outcome of a disease for a patient. Patient data used as the basis for disease prognosis are usually censored because some of the patients have not experienced the outcome of the disease at the time of prognosis. A mathematical-programming approach, called isotonic prediction, is developed for the purpose of such prognosis tasks. The proposed technique is different from well-known statistical survival analysis methods, such as Kaplan-Meier product-limit estimation and Cox's regression, in that it predicts individual patients' survival time frame. Two medical applications are presented to show the applicability of the proposed isotonic prediction technique. [ABSTRACT FROM AUTHOR]

How do firms avoid being "fenced in" by owners of patented technologies used, perhaps unknowingly, in the design or manufacture of their products? This paper examines the conditions under which firms expand their own portfolios of patents in response to potential hold-up problems in markets for technology. Combining insights from transactions cost theory with recent scholarship on intellectual property and its exchange, I predict firms will patent more aggressively than otherwise expected when markets for technology are highly fragmented (i.e., ownership rights to external technologies are widely distributed); this effect should be more pronounced for firms with large investments in technology-specific assets and under a strong legal appropriability regime. Although these characteristics of firms and their external environments have been highlighted in the theoretical literature, prior research has not explored the extent to which such factors interact to shape the patenting behavior of firms. To empirically test these hypotheses, I develop a citations-based "fragmentation index" and estimate the determinants of patenting for 67 U.S. semiconductor firms between 1980 and 1994. Accumulating exclusionary rights of their own may enable firms to safeguard their investments in new technologies while foregoing some of the costs and delays associated with ex ante contracting. [ABSTRACT FROM AUTHOR]

Researchers and managers broadly agree that coordination and harmony between manufacturing and marketing improve firm performance by eliminating suboptimal practices within the firm. In this paper, we present a contrasting view of the manufacturing-marketing interface. We model a duopoly in which the firms compete on price and quality dimensions. The manufacturing and marketing managers within each firm are presented with conflicting incentives focused on cost minimization and revenue maximization, respectively. These managers bargain with each other before arriving at compromise decisions regarding price and quality. While frequently encountered in practice, this "conflicting-objectives puzzle" is surprising because one expects that centralized coordination by the owners of the firm towards profit maximization would lead to higher profits. In this paper, we resolve the conflicting-objectives puzzle and demonstrate that, surprisingly, the firm's resulting profits in this setting of conflict can be higher than those obtained when the decisions of the managers are perfectly coordinated. We also analyze the equilibrium in incentive plans when the owners can choose between compromise and perfect coordination. Our results offer a new interpretation of manufacturing-marketing conflict as a strategic tool that can enhance firm profits. [ABSTRACT FROM AUTHOR]