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Is it feasible to build desalination plants for the coproduction of salt and fresh water from U.S. seawater that could lead to a restructuring of supply chains for salt imports? As it is predicted that climate change will increase water stress worldwide, an increasing number of countries are using desalination plants to generate fresh water. In most such cases, residual concentrates must be disposed of, and the disposal cost is increasing as countries are becoming more environmentally conscious. Selective salt recovery can help to alleviate this issue as it reduces the need for concentrate disposal and generates additional revenue. To gain some insights into the costs and benefits of coproduction plants, we have collected data on current desalination practices and salt imports in the United States along with the manufacturing costs and energy requirements for coproduction plants. We have used this data to build an optimization model to determine an optimal number and location of coproduction plants in the United States and their potential markets for the sale of coproduced salt. In our analysis, we consider a different total number of coproduction facilities, and for each configuration, we evaluate the resulting net water cost and carbon emissions impact. Our results indicate that there exists the potential for building several coproduction plants in the United States that would be both financially competitive with existing desalination plants and lead to a reduction in carbon emissions. This information might be of use to both governments and businesses when they make decisions about the type of desalination facilities built and the implemented "polluter pays" policies. This paper was This paper was accepted by Beril Toktay, Special Section of Management Science on Business and Climate Change. Supplemental Material: Data are available at https://doi.org/10.1278/mnsc.2021.4109. [ABSTRACT FROM AUTHOR]

Commentary is presented for the article "Three Modes of Conflict," by Anatol Rapoport, published in the April 1, 1961 issue of the periodical "Management Science." The author notes that he is in agreement with many of Rapoport's principles concerning conflict resolution, but is unconvinced of the applicability of these principles. According to the author, at the time of publication Rapoport's assumptions surrounding conflict resolution are invalid when an attempt is made to apply them to the conflict between the United States and Soviet Union.

With one-third of marriages in the United States beginning online, online dating platforms have become important curators of the modern social fabric. Prior work on online dating has elicited two critical frictions in the heterosexual dating market. Women, governed by age-old social norms of not making the first move, are inhibited in their interactions in that they do not initiate contact with men. On the other side, men send an abundance of messages, the majority of which do not convert to matches. A key distinguishing feature of online dating versus its traditional counterpart is the ability to leave a range of digital signals not replicable in the offline world. These digital signals can impact the nature of online dating platform outcomes. In this paper, we study the impact of a feature that reveals "who likes you" (WLY) on engagement, the number of matches, match efficiency, and match sorting in online dating. This feature reveals the identity of the voters who have rated the focal user with a like. To causally identify the effect of this feature, we conduct a large-scale randomized control trial in collaboration with a major North American dating platform. The treatment causes women to be more proactive, sending 7.4% more messages, which is a highly desirable market improvement given that men send double the number of messages compared with women. Further, we find that the women endowed with this feature increase their matches by 14.4%, whereas men increase their matches by 11.5%. Analyzing the moderating impact of desirability—a key aspect of the WLY feature—provides us with nuanced findings. Depending on the levels of each of the two parties' desirability, we see evidence of sorting, encouragement, and discouragement. This paper was accepted by Anandhi Bharadwaj, information systems. Supplemental Material: The Online Appendix is available at https://doi.org/10.1287/mnsc.2022.4576. [ABSTRACT FROM AUTHOR]

We find that manufacturing firms adopt more conservative capital structures in response to the Nitrogen Oxides (NOx) Budget Trading Program (NBP) of 2004, a regional cap-and-trade program aimed at mitigating the NOx emissions of power plants in 11 midwestern and southeastern states in the United States. Our further analysis demonstrates that, because the NBP induces an electricity price shock, it affects manufacturers' financial decisions by raising their operating leverage and distress risk. We also find that firms respond to the NBP's adoption heterogeneously: they adjust their financial leverage more dramatically when facing greater electricity intensity, financial distress threats, or competitive pressure. In addition, firms adapt not only capital structure, but also other financial policies in response to the regulation. Overall, our study shows that climate policy risk constitutes an essential consideration in firm financial decisions. It also highlights potential unintended consequences of policy responses to climate change for the corporate sector. This paper was accepted by George Serafeim, Special Section of Management Science on Business and Climate Change. Funding: The authors gratefully acknowledge generous financial support from the Alliance Manchester Business School Strategic Research Investment Fund. Supplemental Material: The data files and online appendix and data are available at https://doi.org/10.1287/mnsc.2022.4617. [ABSTRACT FROM AUTHOR]

This study looks at the United States biotechnology industry as a community of practice caught between two evolutionary logics by which valuable scientific knowledge and valuable innovations are selected. We analyze the publications and patents of 116 biotechnology firms during the period 1988-1995. In models that link scientific capabilities to patent citations, we show that scientific ideas are not simply inputs into inventions; important scientific ideas and influential patents follow different and conflicting selection logics. Publication, collaboration, and science intensity are associated with patented innovations; however, important scientific papers are negatively associated with high-impact innovations. These results point to conflicting logics between science and innovation, and scientists must contribute to both while inhabiting a single epistemic community. We identify individuals listed on patents and scientific papers and find they effectively integrate science with innovation, leading to more successful innovations. Our findings suggest that the role of the small, research-intensive firm is to create a repository of knowledge; to act as an organizational mechanism to combine the capabilities of versatile scientists within and outside the boundaries of the firm; and to manage the selection of scientific ideas to produce valuable technical innovations. [ABSTRACT FROM AUTHOR]

Electronic health record (EHR) systems allow physicians to automate the process of entering patient data relative to manual entry in traditional paper-based records. However, such automated data entry can lead to increased reimbursement requests by hospitals from Medicare by overstating the complexity of patients. The EHR module that has been alleged to increase reimbursements is the Computerized Physician Order Entry (CPOE) system, which populates patient charts with default templates and allows physicians to copy and paste data from previous charts of the patient and other patients' records. To combat increased reimbursements by hospitals from Medicare, the Centers for Medicare & Medicaid Services implemented the Recovery Audit Program first as a pilot in six states between 2005 and 2009 and then, nationwide in the entire United States in 2010. We examine whether the adoption of CPOE systems by hospitals is associated with an increase in reported patient complexity and if the Recovery Audit Program helped to attenuate this relationship. We find that the adoption of CPOE systems significantly increases patient complexity reported by hospitals, corresponding to an estimate of $1 billion increase in Medicare reimbursements per year. This increase was attenuated when hospitals were regulated by the Recovery Audit Program. Notably, those recovery auditors who developed the ability to identify the use of default templates, copied and pasted data, and cloned records were the most effective in reducing increased reimbursements. These findings have implications on how to combat Medicare reimbursements paid by taxpayer dollars with the Recovery Audit Program and how this information technology (IT) audit can prevent the misuse of information systems to create artificial business value of IT by hospitals. Contributions to information systems and healthcare research, practice, and public policy are discussed. This paper was accepted by Chris Forman, information systems. [ABSTRACT FROM AUTHOR]

One of the important uses of an EOQ item's distribution of lead time demand is to set its reorder point. This paper shows that a realistic model of observed demand patterns can be chosen from the compound Poisson family of distributions. Actual historical data from several U.S. Air Force bases are analyzed using the geometric-Poisson and constant-Poisson distributions. The control discipline is order quantity, reorder point with continuous review. The service level is based on percent of demand supplied during lead time and is consistent with current USAF methodology. The reorder point is based on independent calculations and no attempt is made to jointly optimize the order quantity and reorder point. Lead time is assumed to be known and constant. [ABSTRACT FROM AUTHOR]

This paper studies price bargaining when both parties have left-digit bias when processing numbers. The empirical analysis focuses on the auto finance market in the United States, using a large data set of 35 million auto loans. Incorporating left-digit bias in bargaining is motivated by several intriguing observations. The scheduled monthly payments of auto loans bunch at both $9- and $0-ending digits, especially over $100 marks. In addition, $9-ending loans carry a higher interest rate, and $0-ending loans have a lower interest rate. We develop a Nash bargaining model that allows for left-digit bias from both consumers and finance managers of auto dealers. Results suggest that both parties are subject to this basic human bias: the perceived difference between $9- and the next $0-ending payments is larger than $1, especially between $99- and $00-ending payments. The proposed model can explain the phenomena of payments bunching and differential interest rates for loans with different ending digits. We use counterfactuals to show a nuanced impact of left-digit bias, which can both increase and decrease the payments. Overall, bias from both sides leads to a $33 increase in average payment per loan compared with a benchmark case with no bias. This paper was accepted by Matthew Shum, marketing. [ABSTRACT FROM AUTHOR]

Social media platforms for healthcare services are changing how patients choose physicians. The digitization of healthcare reviews has been providing additional information to patients when choosing their physicians. On the other hand, the growing online information introduces more uncertainty among providers regarding the expected future demand and how different service features can affect patient decisions. In this paper, we derive various service-quality proxies from online reviews and show that leveraging textual information can derive useful operational measures to better understand patient choices. To do so, we study a unique data set from one of the leading appointment-booking websites in the United States. We derive from the text reviews the seven most frequently mentioned topics among patients, namely, bedside manner, diagnosis accuracy, waiting time, service time, insurance process, physician knowledge, and office environment, and then incorporate these service features into a random-coefficient choice model to quantify the economic values of these service-quality proxies. By introducing quality proxies from text reviews, we find the predictive power of patient choice increases significantly, for example, a 6%–12% improvement measured by mean squared error for both in-sample and out-of-sample tests. In addition, our estimation results indicate that contextual description may better characterize users' perceived quality than numerical ratings on the same service feature. Broadly speaking, this paper shows how to incorporate textual information into an econometric model to understand patient choice in healthcare delivery. Our interdisciplinary approach provides a framework that combines machine learning and structural modeling techniques to advance the literature in empirical operations management, information systems, and marketing. This paper was accepted by David Simchi-Levi, operations management. [ABSTRACT FROM AUTHOR]

This paper analyzes the optimal procurement, processing, and production decisions of a meat-processing company (hereafter, a "packer") in a beef supply chain. The packer processes fed cattle to produce two beef products, program (premium) boxed beef and commodity boxed beef, in fixed proportions, but with downward substitution of the premium product for the commodity product. The packer can source input (fed cattle) from a contract market, where long-term contracts are signed in advance of the required delivery time, and from a spot market on the spot day. Contract prices are taken to be of a general window form, linear in the spot price but capped by upper and lower limits on realized contract price. Our analysis provides managerial insights on the interaction of window contract terms with processing options. We show that the packer benefits from a low correlation between the spot price and product market uncertainties, and this is independent of the form of the window contract. Although the expected revenues from processing increase in spot price variability, the overall impact on profitability depends on the parameters of the window contract. Using a calibration based on the report by the GIPSA (Grain Inspection, Packers and Stockyards Administration. 2007. GIPSA livestock and meat marketing study, vol. 3: Fed cattle and beef industries. Report, U.S. Department of Agriculture, Washington,DC), this paper elucidates for the first time the value of long-term contracting as a complement to spot sourcing in the beef supply chain. Our comparative statics results provide some rules of thumb for the packer for the strategic management of the procurement portfolio. In particular, we show that higher variability (higher spot price variability, product market variability, and correlation) increases the profits of the packer, but decreases the reliance on the contract market relative to the spot market. [ABSTRACT FROM AUTHOR]

Large institutional investors own an increasing share of the equity markets in the United States. The implications of this development for financial markets are still unclear. The paper presents novel empirical evidence that ownership by large institutions predicts higher volatility and greater noise in stock prices as well as greater fragility in times of crisis. When studying the channel, we find that large institutional investors exhibit traits of granularity (i.e., subunits within a firm display correlated behavior), which reduces diversification of idiosyncratic shocks. Thus, large institutions trade larger volumes and induce greater price impact. This paper was accepted by David Simchi-Levi, finance. [ABSTRACT FROM AUTHOR]

Many patients in need of a kidney transplant have a willing but incompatible (or poorly matched) living donor. Kidney exchange programs arrange exchanges among such patient-donor pairs, in cycles and chains of exchange, so that each patient receives a compatible kidney. Kidney exchange has become a standard form of transplantation in the United States and a few other countries, in large part because of continued attention to the operational details that arose as obstacles were overcome and new obstacles became relevant. We review some of the key operational issues in the design of successful kidney exchange programs. Kidney exchange has yet to reach its full potential, and the paper further describes some open questions that we hope will continue to attract attention from researchers interested in the operational aspects of dynamic exchange. This paper was accepted by David Simchi-Levi, Special Section of Management Science: 65th Anniversary. [ABSTRACT FROM AUTHOR]

Despite criticisms regarding their effectiveness, reward programs today represent a prevalent and apparently successful form of marketing investment for several industries such as airlines, hotels, gas stations, and credit cards. To understand what might contribute to their success, this paper investigates the purchase behavior of consumers who participate in a reward program from the travel industry. We estimate a dynamic demand model of gasoline purchase, and compare the value that consumers attach to rewards with the value they attach to the money spent for gasoline. We find that there exists a significant portion of frequent travelers who extract more value from one dollar’s worth of rewards than from one dollar spent for gasoline. Most of the effectiveness of the reward program is due to the behavior of these consumers. Their insensitivity to price induces firms to increase fuel prices by 1 euro cent per liter, which corresponds to about 10% increase in their margins. The program also contributes to softening competition, increasing margins by 4%. The web appendix is available at https://doi.org/10.1287/mnsc.2017.2821. This paper was accepted by Matthew Shum, marketing. [ABSTRACT FROM AUTHOR]

This paper investigates the impact of customer compatibility—the degree of fit between customers' needs and the capabilities of the operations serving them—on customer experiences and firm performance. We use variance decomposition analysis to quantify the relative importance of customer, employee, process, location, and market-level effects on customer satisfaction. In our models, which explain roughly a quarter of the aggregate variance, differences among customers account for 96%–97% of the explainable portion. Further analysis of interaction-level data from banking and quick-service restaurants reveals that customers report relatively consistent satisfaction across transactions with particular firms but that some customers are habitually more satisfied than others. A second set of empirical studies provides evidence that these customer-level differences are explained in part by customer compatibility. Customers whose needs, proxied by differences in demographics and product choices, diverge more starkly from those of their bank's average customers report significantly lower levels of satisfaction. Consistently, banks that serve customer bases with more dispersed needs receive lower satisfaction scores than banks serving customer bases with less dispersed needs. Finally, a longitudinal analysis of the deposit and loan growth of all federally insured banks in the United States from 2006 to 2017 reveals that customer compatibility affects a firm's financial performance. Branches with more divergent customers grow more slowly than branches with less divergent customers. Institutions serving customer bases with more dispersed needs have branches that exhibit slower growth than those of institutions serving customer bases with less dispersed needs. This paper was accepted by Vishal Gaur, operations management. [ABSTRACT FROM AUTHOR]

The paper proposes the use of linear programming to "solve" a specific freight car allocation situation wherein a choice of freight cars is available for shipper shipments, and the railroad's car allocation objective is to maximize the expression (freight car rental receivables-freight car rental payables). The freight car rental payment structure which is applicable is that of "time-mileage per diem" rates proposed in the United States by the Interstate Commerce Commission. The paper first describes the problem and its background, and then a model and various extensions are formulated. An example illustrates how costly to a railroad the difference between good and bad car allocation may be. Although the proposed linear programming approach may be manually tractable for small volume car allocation situations, the paper concludes that in most car allocation situations, the approach requires a computerized data base with a "real-time" information and communications system which includes order entry, car rental, routing-distance, and train travel time and yard delay time information. [ABSTRACT FROM AUTHOR]

We study the effects of the introduction of cross-channel functionalities on the overall sales dispersion of retailers and the implications of these effects for inventory management. To do that, we analyze data from a leading U.S. retailer who introduced a 'ship-to-store' (STS) functionality that allows customers to ship products to their local store free of charge when those products are not available in their local store. Based on the fact that stores prioritize carrying products for which local demand is high, we test the hypothesis that introducing the STS functionality increased the retailer's overall sales dispersion. We find that, on average, the contribution of the 90% lowest-selling products to total sales increased by 0.75 percentage points, increasing sales dispersion. Calibrating conventional inventory-ordering models, we show that to respond optimally to the observed increase in dispersion, the retailer would need to increase its cycle and safety inventories by approximately 2.7%. Our paper points out the effect of an increasingly important retail phenomenon (channel integration) on a key factor for inventory management (sales dispersion). This paper was accepted by Vishal Gaur, operations management. [ABSTRACT FROM AUTHOR]

The McFadden Act of 1927 was one of the most hotly contested pieces of legislation in U.S. banking history, and its influence was felt over half a century later. This paper studies the congressional voting behavior surrounding the act's passage. We find that congressmen in districts in which landholdings were concentrated and credit was costlier were significantly more likely to oppose the act. The evidence suggests that whereas the law and the overall regulatory structure can shape the financial system far into the future, they themselves are likely to be shaped by elites, even in countries with benign political institutions. This paper was accepted by Amit Seru, finance. [ABSTRACT FROM AUTHOR]

This paper presents a case study of the impact of manufacturing offshore on technology competitiveness in the optoelectronics industry. It examines a critical design/facility location decision being faced by optoelectronic component manufacturers. This paper uses a combination of simulation modeling and empirical data to demonstrate the economic constraints facing these firms. The results show that production location changes the relative production economics of the two competing designs—one emerging, one prevailing—that are currently perfect substitutes for each other on the telecom market, but not necessarily perfect substitutes in other markets in the long term. Specifically, if optoelectronic component firms shift production from the United States to countries in developing East Asia, the emerging designs that were developed in the United States no longer pay. Production characteristics are different abroad, and the prevailing design can be more cost effective in developing country production environments. The emerging designs, however, have performance characteristics that may be valuable in the long term to the larger computing market and to pushing forward Moore’s law. This paper concludes by exploring the dilemma this creates for the optoelectronic component manufacturers and recommending a framework based on which the results may be generalized to other industries. [ABSTRACT FROM AUTHOR]

Hub networks play an important role in many transportation and telecommunications systems. This paper introduces a new model called the hub arc location model. Rather than locate discrete hub facilities, this model locates hub arcs, which have reduced unit flow costs. Four special cases of the general hub arc location model are examined in detail. We provide motivation for the new models, and present examples and optimal solutions, using data for U.S. air passenger traffic. Results are used to compare optimal costs, hub locations, and hub arc locations with corresponding hub median optimal solutions. The results reveal interesting spatial patterns and help identify promising cities and regions for hubs. A companion paper (Campbell et al. 2005) presents integer programming formulations and solution algorithms for the new hub arc problems. It also provides details and computation times for these solution algorithms. [ABSTRACT FROM AUTHOR]

Blood pressure (BP) is a significant controllable risk factor for cardiovascular disease (CVD), the leading cause of death worldwide. BP comprises two interrelated measurements: systolic and diastolic. CVD risk is minimized at intermediate BP values, a notion known as the J-curve effect. The J-curve effect imposes fundamental trade-offs in simultaneous management of systolic and diastolic BP; however, assessing a comprehensive set of joint systolic/diastolic BP treatment thresholds while explicitly considering the J-curve effect via randomized controlled trials (RCTs) is not feasible because of the time and cost-prohibitive nature of RCTs. In this study, we propose an analytics approach to identify promising joint systolic/diastolic BP threshold levels for antihypertensive treatment. More specifically, using one of the largest longitudinal BP progression data sets, we first build and fit Brownian motion processes to capture simultaneous progression of systolic/diastolic BP at the population level and externally validate our BP progression model on unseen data. We then analytically characterize the hazard ratio, which enables us to compute the optimal treatment decisions. Finally, building upon the optimal joint BP treatment thresholds, we devise a practical and easily implementable approximate policy. We estimate the potential impact of our findings through a simulation study, which indicates that the impact of explicitly considering the J-curve effect and joint systolic/diastolic BP in treatment decisions could be substantial. Specifically, we estimate that between approximately 3,000 and 9,000 premature deaths from cardiovascular disease in the United States could be prevented annually, a finding that could be tested empirically in randomized trials. This paper was accepted by Stefan Scholtes, healthcare management. [ABSTRACT FROM AUTHOR]

Nonprofit crowdsourcing platforms such as food recovery organizations rely on volunteers to perform time-sensitive tasks. Thus, their success crucially depends on efficient volunteer utilization and engagement. To encourage volunteers to complete a task, platforms use nudging mechanisms to notify a subset of volunteers with the hope that at least one of them responds positively. However, because excessive notifications may reduce volunteer engagement, the platform faces a tradeoff between notifying more volunteers for the current task and saving them for future ones. Motivated by these applications, we introduce the online volunteer notification problem, a generalization of online stochastic bipartite matching where tasks arrive following a known time-varying distribution over task types. Upon arrival of a task, the platform notifies a subset of volunteers with the objective of minimizing the number of missed tasks. To capture each volunteer's adverse reaction to excessive notifications, we assume that a notification triggers a random period of inactivity, during which she will ignore all notifications. However, if a volunteer is active and notified, she will perform the task with a given pair-specific match probability that captures her preference for the task. We develop an online randomized policy that achieves a constant-factor guarantee close to the upper bound we establish for the performance of any online policy. Our policy and hardness results are parameterized by the minimum discrete hazard rate of the interactivity time distribution. The design of our policy relies on sparsifying an ex ante feasible solution by solving a sequence of dynamic programs. Furthermore, in collaboration with Food Rescue U.S., a volunteer-based food recovery platform, we demonstrate the effectiveness of our policy by testing it on the platform's data from various locations across the United States. This paper was accepted by Gabriel Weintraub, revenue management and market analytics. [ABSTRACT FROM AUTHOR]

This paper offers evidence from three different samples consistent with investors substituting between playing the lottery and gambling in financial markets. In the United States, increases in the jackpots of the multistate lotteries Powerball and Mega Millions are associated with significant reductions in small trade participation in the stock market. California-based discount brokerage clients and German discount brokerage clients are significantly less likely to trade during weeks with larger lottery prizes in the California and German lotteries, respectively. Variation in lottery prizes affects speculative trading in more lottery-like securities such as individual stocks and options, but not trading in bonds and mutual funds. Trading that is likely associated with long-term savings motives, such as trading in retirement accounts, does not respond to lottery jackpots, either. The negative relation between trading activity and jackpots is stronger for individuals who are more likely to play the lottery. [ABSTRACT FROM AUTHOR]

This paper identifies four groups among 113 Fortune 500 manufacturers that approach innovation quite differently. The groups are based on 27 measured elements of corporate environment, corporate strategy, and formal and informal organization. Both product innovation and financial performance differ significantly over the groups, and a group of 42 firms that invest heavily in innovation perform best financially. A smaller group of firms that are not innovative but which follow a strategy of acquisition perform nearly as well financially. Firms focusing research resources on process innovation perform poorly, although process research complements product research among the effective innovators. Particularly important for explaining both product innovation and financial performance of these firms are salient combinations of classic elements of good environment, good strategy and good organization--strong positions in growing markets, investment in research and development, open and creative organizational structures and supportive organizational climates. [ABSTRACT FROM AUTHOR]

This paper examines the effect on product development of project scope: the extent to which a new product is based on unique parts developed in-house. Using data from a larger study of product development in the world auto industry, the paper presents evidence on the impact of scope on lead time and engineering productivity. Studies of the automotive supplier industry suggest that very different structures and relationships exist in Japan, the U.S., and Europe. Yet there has been little study of the impact of these differences on development performance. Further, little is known about the effects of different parts strategies (i.e. unique versus common or carryover parts) on development. The evidence presented here suggests that project scope differs significantly in the industry, even for comparable products. These differences in strategy, in turn, explain an important part of differences in performance. In particular, it appears that a distinctive approach to scope among Japanese firms--high levels of unique parts, intensive supplier involvement in engineering--accounts for a significant fraction of their advantage in lead time and cost. [ABSTRACT FROM AUTHOR]

This paper develops an organizational change construct from the activities of the Jamestown (New York) Area Labor-Management Committee, a community-based program of labor-management cooperation. As part of this program, projects to increase productivity and to improve the quality of working life were undertaken by internal labor-management committees in ten factories over a four-year period. Although each organizational experience was episodic, these efforts collectively gave rise to community "themes" -- such as skills development, gains-sharing, and layout redesign -- which served to stimulate further organizational change, often in unanticipated ways. Diffusion typically was from part of one organization to part of another, rather than from a part, to the whole, of the same organization. In effect, a community "theme-set" evolved out of many piecemeal organizational projects. The various themes then served to integrate the micro projects and the Area Committee's macro objectives. Singly and in combination, the eight themes comprising the set rendered general (community) objectives more concrete, and concrete (organizational) projects more general. A two-phase change process is described, and a thematic reappreciation is made. The concept of theme developed in this paper then is considered in light of other, related concepts. Based on the timing of theme appearance and the degree of organizational appreciation, four theme subsets are distinguished. Development within each subset is elaborated, and the subsets are contrasted in terms of certain theme attributes. Four partial explanations are posited for general appreciation of themes: (1) community coherence, (2) organization-theme fit, (3) the existence of alternative participative options, and (4) the nature of the intervention process. After subsequent developments in Jamestown are shown to support theme appreciation, the paper examines the relevance of theme appreciation to change within organizations--irrespective of links to a community program. Three issues are treated: (1) unit of analysis. (2) the role of non-participants in organizational change, and (3) organization-wide transformation. In each case, the potential value of theme-appreciation is suggested. The paper concludes by expressing some cautions about pseudo-appreciation of themes. [ABSTRACT FROM AUTHOR]

This paper considers the impact of tax liabilities on optimal inventory policy through the medium of FIFO and LIFO tax valuation schemes in a stochastic environment. The relationship between inventory policy and changes in either the rate of inflation or the corporate tax rate is investigated. By using recent results from the field of perishable product inventory systems, closed form expressions for expected profit are generated for both FIFO and LIFO. An extensive analysis of the one period problem indicates the impact of each valuation scheme on inventory ordering. Optimal policies are derived for the multi-period problem where prices, costs and demand distributions vary with time. In the case of FIFO a nonstationary optimal myopic policy is generated. In the case of LIFO optimal order policy is nonstationary and nonmyopic. The paper concludes with an example which illustrates the dynamic response of order policy under both schemes. The example indicates that the cost of ignoring taxes in optimizing order levels can be substantial, and that policy obtained under FIFO may be a reasonable approximation to the LIFO policy. The benefit of switching from FIFO to LIFO is also quantified. [ABSTRACT FROM AUTHOR]

This paper presents a simple model to guide the efficient allocation of resources in community programs to detect and treat hypertension. We model such programs as n-component series systems, where each stage must function in sequence in order for the system as a whole to operate. The model differs from standard series reliability models in that, if a component fails, costs at subsequent stages are not incurred. This "pay-as-you-go" aspect implies that widespread screening is inefficient, and that resources could be better spent ensuring continued treatment of identified hypertensives. Calculations based on actual programs suggest that an optimal allocation of a fixed budget could increase significantly the number of hypertensives controlled, by about 40 percent in our example. This conclusion is robust under all but the most pessimistic assumptions. [ABSTRACT FROM AUTHOR]

This paper is concerned with formulating, exploring and interpreting the uses and constructs which may be derived from a mathematical model of programming type which expresses more realistically than past efforts the actual conditions of current operations. It is an attempt to provide a means of attaining thereby an objective understanding of the implications of actual Federal Reserve liquidity policy on the actions and opportunities of banking institutions. The model presented corresponds to the problem of determining an optimal portfolio for an individual bank over several time periods in accordance with requirements laid down by bank examiners which are interpreted as defining limits within which the level of risk associated with the return on the portfolio is an acceptable one. The problem is transformed into an equivalent one offering advantages of analysis and of computation. Some methods of effective computation are explored. [ABSTRACT FROM AUTHOR]

This paper studies the impact of an electronic medical record (EMR) system on the productivity of physicians. Physicians influence a vast majority of treatment decisions and are central to the care delivery process; thus, it is important to understand how EMRs may impact the nature of their work. Our research builds on prior literature on physician productivity, IT productivity, and task–technology fit theory. We use a unique panel data set comprising 87 physicians specializing in internal medicine, pediatrics, and family practice, located in 12 primary care clinics of an academic healthcare system in the western United States. We employ the Arellano–Bond system generalized method of moments estimation technique on our data set, which contains 3,186 physician-month productivity observations collected over 39 months. We find that productivity drops sharply immediately after technology implementation and recovers partly over the next few months. The ultimate, longer-term impact depends on physician specialty. The net impact of the EMR system is more benign on internal medicine physicians than on pediatricians and family practitioners. We postulate that the fit provided by an EMR system to the task requirements of physicians of various specialties may be key to disentangling the productivity dynamics. Our research finds that on one hand, present-day EMR systems do not produce the kind of productivity gain that could lead to substantial savings in healthcare; at the same time, EMRs do not cause a major productivity loss on a sustained basis, as many physicians fear. [ABSTRACT FROM AUTHOR]

We investigate the impact of delay announcements on the coordination within hospital networks using a combination of empirical observations and numerical experiments. We offer empirical evidence that suggests that patients take delay information into account when choosing emergency service providers and that such information can help increase coordination in the network, leading to improvements in the performance of the network, as measured by emergency department wait times. Our numerical results indicate that the level of coordination that can be achieved is limited by the patients' sensitivity to waiting, the load of the system, the heterogeneity among hospitals, and, importantly, the method hospitals use to estimate delays. We show that delay estimators that are based on historical averages may cause oscillation in the system and lead to higher average wait times when patients are sensitive to delay. We provide empirical evidence that suggests that such oscillations occur in hospital networks in the United States. This paper was accepted by Gad Allon, operations management. [ABSTRACT FROM AUTHOR]

Secure messaging, or "e-visits," between patients and providers has sharply increased in recent years, and many hope they will help improve healthcare quality, while increasing provider capacity. Using a panel data set from a large healthcare system in the United States, we find that e-visits trigger about 6% more office visits, with mixed results on phone visits and patient health. These additional visits come at the sacrifice of new patients: physicians accept 15% fewer new patients each month following e-visit adoption. Our data set on nearly 100,000 patients spans from 2008 to 2013, which includes the rollout and diffusion of e-visits in the health system we study. Identification comes from difference-in-differences estimates leveraging variation in the timing of e-visit adoption by both patients and providers. We conduct several robustness checks, including matching analyses and an instrumental variable analysis to account for possible time-varying characteristics among patient e-visit adopters. This paper was accepted by Chris Forman, information systems. [ABSTRACT FROM AUTHOR]

Some corporations attempt to lessen their tax burden through involvement in the legislative process. We identify firms that contributed to congressional candidates who favor reductions in the U.S. corporate statutory tax rate. This support created a temporary incentive to manage effective tax rates (ETRs) up. We document that these firms increased their reported effective tax rate in the two calendar quarters preceding the 2012 election relative to adjacent periods and other firms supporting candidates in the same election. We find that the variation in upward ETR management is correlated with firm-level proxies for potential reputational costs, capital markets costs, and long-run tax burdens. The variation in upward ETR management is also correlated with firm-candidate-level proxies for strength of relationships and competitiveness of election races. Our findings provide new evidence on accounting choices in support of corporate political activity and on the political cost hypothesis in the tax setting. The online appendix is available at https://doi.org/10.1287/mnsc.2017.2842. This paper was accepted by Shivaram Rajgopal, accounting. [ABSTRACT FROM AUTHOR]

We study price competition in markets with a large number (in the magnitude of hundreds or thousands) of potential competitors. We address two methodological challenges: simultaneity bias and high dimensionality. Simultaneity bias arises from joint determination of prices in competitive markets. We propose a new instrumental variable approach to address simultaneity bias in high dimensions. The novelty of the idea is to exploit online search and clickstream data to uncover customer preferences at a granular level, with sufficient variations both over time and across competitors in order to obtain valid instruments at a large scale. We then develop a methodology to identify relevant competitors in high dimensions combining the instrumental variable approach with high-dimensional l − 1 norm regularization. We apply this data-driven approach to study the patterns of hotel price competition in the New York City market. We also show that the competitive responses identified through our method can help hoteliers proactively manage their prices and promotions. The online appendix is available at https://doi.org/10.1287/mnsc.2017.2820. This paper was accepted by Vishal Gaur, operations management. [ABSTRACT FROM AUTHOR]

We examine the impact of hedge fund interventions on target firms’ strategic behavior, specifically their voluntary disclosure and earnings management strategies. We find a decrease in both the likelihood and the frequency of management earnings forecasts conveying bad news and an increase in the level of real earnings management following interventions by hedge fund activists. Additional evidence suggests that managers substitute between voluntary disclosure and earnings management strategies in resisting hedge fund attacks. We also find that withholding of bad news is more pronounced when hedge fund activists pose greater threats to the target firm’s management and when the intervention lasts for a relatively short time period. Our results are consistent with firms behaving strategically in response to heightened career/reputation concerns and endangered corporate control arising from hedge fund activism. The online appendix is available at https://doi.org/10.1287/mnsc.2017.2816. This paper was accepted by Suraj Srinivasan, accounting. [ABSTRACT FROM AUTHOR]

Modest differences in higher-order beliefs may have large price effects. We generalize a standard rational expectations equilibrium model with different information by allowing differences in higher-order beliefs. Investors have possibly different dogmatic beliefs about the mean, different dogmatic beliefs about other investors’ beliefs, and so on for higher and higher orders of beliefs. Even when every investor’s first-order expectations are unbiased, overvaluation results when investors have inconsistent higher-order beliefs that their own expectations are more optimistic than average. This lack of common knowledge destabilizes prices in an unbounded manner as market liquidity disappears. This paper was accepted by Gustavo Manso, finance. [ABSTRACT FROM AUTHOR]

We study portfolio choice with multiple stocks and capital gains taxation, assuming that capital losses can only offset current or future realized capital gains. We show, through backtesting using empirical distributions, that optimal equity holdings over an extended period are significantly lower on average than benchmark holdings suggested in the literature. Using value and growth or small and large portfolios, the backtests show that allocations remain persistently underdiversified. Carryover losses have large economic significance since they can dramatically shrink the no-trade region. Finally, the backtested economic cost of incorrectly modeling capital losses is at least 8% of lifetime wealth. The Internet appendix is available at https://doi.org/10.1287/mnsc.2017.2733. This paper was accepted by Neng Wang, finance. [ABSTRACT FROM AUTHOR]

Online weight-loss communities (OWCs) provide individuals with various tools to support their weight management, such as weight recorders and weight-loss journals. These tools enable individuals to focus on different aspects of their self-regulation, including weight-loss outcomes and behavioral routines. Prior research, however, has not fully incorporated individuals' self-regulation focuses; thus, there is limited understanding of individuals' online weight-management dynamics as well as the operating mechanisms of OWCs. This gap in the literature motivates us to develop a framework that is able to account for individuals' multiple self-regulation focuses, termed self-regulatory dimensions in this study. We propose a multidimensional, continuous-time hidden Markov model, which can not only capture individuals' self-regulatory dimensions jointly as a multidimensional vector, but also can incorporate a hidden layer of dynamics that depicts individuals' cognitive states in producing weight-management behaviors. By investigating a leading noncommercial OWC in the United States, we find that individuals tend to increase their journal-recording behaviors while decreasing self-weighing behaviors after they have participated in online social activities. Given that individuals usually expend limited effort toward weight management, this result suggests that individuals may shift their focus from weight-loss outcomes (i.e., changes in weight) to weight-management behavioral routines. Therefore, neglecting either self-regulatory dimension would result in an underestimation of individuals' engagement in conducting self-management in OWCs. Our results also provide insight into social influence on individuals' weight-management behaviors. This study contributes to the extant literature on individuals' engagement in online healthcare communities and the functionality of OWCs. This paper was accepted by Anandhi Bharadwaj, information systems. [ABSTRACT FROM AUTHOR]

Shadow banks play an important role in the modern financial system and are arguably the source of key vulnerabilities that led to the 2007–2009 financial crisis. I develop a quantitative framework with uncertainty fluctuations and endogenous bank default to study the dynamics of shadow banking. I argue that the increase in asset return uncertainty during the crisis results in a spread spike, making it more costly for shadow banks to roll over their debt in the short-term debt market. As a result, these financial institutions are forced to deleverage, leading to a decrease in credit intermediation. The model is estimated using a bank-level data set of shadow banks in the United States. The parameter estimates imply that uncertainty shocks can explain 72% of asset contraction and 70% of deleveraging in the shadow banking sector. Maturity mismatch and asset fire-sales amplify the impact of the uncertainty shocks. First-moment shocks to bank asset return, financial shocks, or fire-sale cost shocks alone cannot reproduce the large interbank spread spike, dramatic deleveraging, or contraction in the U.S. shadow banking sector during the crisis. The model also allows for policy experiments. I analyze how unconventional monetary policies can help to counter the rise in the interbank spread, thus stabilizing the credit supply. Taking bank moral hazard into consideration, I find that government bailout might be counterproductive as it might result in more aggressive risk-taking among shadow banks, especially when bailout decisions are based on bank characteristics. This paper was accepted by Gustavo Manso, finance. [ABSTRACT FROM AUTHOR]

Home healthcare is a rapidly growing area of the health sector in the United States. We study its role in the shift toward value-based care, as it is viewed as an avenue for achieving reductions in the cost and utilization of expensive downstream healthcare services. Using a novel data set on home healthcare visits, we examine whether and how the amount of time that a provider spends during a home health visit with a recently discharged patient impacts the patient's likelihood of being readmitted to the hospital. Because unobserved patient health status may influence both the length of a home health visit and the likelihood of hospital readmission, we use the within-provider average visit length of all other episodes' visits conducted by each provider in the 30-day period before and after the focal visit as an instrument for visit length. Using this instrumental variable approach and controlling for operational, demographic, and patient condition-related characteristics, we find the following: on average, an extra minute during a focal home health visit is associated with a 1.39% decrease in the likelihood of readmission to the hospital following that visit. Our finding suggests that a 10% increase in visit length would decrease the likelihood of readmission following a home health visit by 6%. We document heterogeneity in this effect across different patient types and visit types. We conduct a cost–benefit analysis that suggests that the cost of investing in additional home health capacity is outweighed by the cost savings arising from fewer hospitalizations. This paper was accepted by Stefan Scholtes, healthcare management. [ABSTRACT FROM AUTHOR]

We show that the difference between the natural rate of interest and the current level of monetary policy stance, which we label Convergence Gap (CG), contains information that is valuable for bond predictability. Adding CG in forecasting regressions of bond excess returns significantly raises the R2, and restores countercyclical variation in bond risk premia that is otherwise missed by forward rates. Consistent with the argument that CG captures the effect of real imbalances on the path of rates, our factor has predictive ability for real bond excess returns. The importance of the gap remains robust out-of-sample and in countries other than the United States. Furthermore, its inclusion brings significant economic gains in the context of dynamic conditional asset allocation. This paper was accepted by Gustavo Manso, finance. [ABSTRACT FROM AUTHOR]

Products combine function and form. This paper focuses on product form. We combine state-of-the-art clustering techniques with experimental validation to identify styles(groupings of new product designs of similar form) among the more than 350,000 U.S. design patents granted from 1977 through 2010. Thus we compile, for the first time, a rich data set of styles that can serve as an empirical platform for a rigorous study of the role played by product form in new product development. Building on this platform, we analyze the determinants of "style turbulence"--the year-to-year unpredictability of changes in a style's prevalence. We find that (i) style turbulence follows a U-shaped relationship with respect to function turbulence (the turbulence of product functions associated with a given style), and (ii) style turbulence increases over time. We discuss the implications of these findings for managing design in new product development. [ABSTRACT FROM AUTHOR]

In this paper,we study the effect of invention disclosure through patent publication on the market for ideas.We do so by analyzing the effects of the American Inventor's Protection Act of 1999 (AIPA)--which required U.S. patent applications to be published 18 months after their filing date rather than at patent grant--on the timing of licensing deals in the biomedical industry. We find that post-AIPA U.S. patent applications are significantly more likely to be licensed before patent grant and shortly after 18-month publication. Licensing delays are reduced by about 10 months, on average, after AIPA's enactment. These findings suggest a hitherto unexplored benefit of the patent system: by requiring inventions to be published through a credible, standardized, and centralized repository, it mitigates information costs for buyers and sellers, and thus facilitates transactions in the market for ideas. [ABSTRACT FROM AUTHOR]

Managers of retail chains who seek to add new stores or close existing ones need to know the net impact of a store's opening/closure on the overall chain performance. This requires inferring the extent to which each store generates incremental sales as opposed to competing with other stores belonging to the chain for the same set of customers. However, when the chain is experiencing a growth or a decline in sales, not accounting for these dynamics in goodwill is likely to yield misleading estimates of incremental sales versus cannibalization. Moreover, firms might have been strategic in opening outlets in locations with favorable characteristics. We need to control for this location endogeneity while inferring the marginal effect of store opening/closure. In this paper, we develop a demand model that accounts for dynamics in goodwill, location endogeneity, and spatial competition between geographically proximate retail outlets. We calibrate the model parameters on both attitudinal and behavioral data for a fast food chain in a large U.S. city. The results imply that consumers perceive a travel cost of $0.60 per mile. As regards the composition of sales at individual stores, on average, 86.7% of sales constitute incremental purchases with the rest derived from cannibalized sales from nearby stores belonging to the chain. We also find significant decay in cannibalization with distance such that when the distance between stores increases by one mile, the sales lost due to cannibalization decreases by 28.1%; there is virtually no cannibalization at a distance of 10 miles. In terms of managerial applications, we discuss how managers can use the model presented in this paper to make two key decisions: (a) isolating locations that can be closed by identifying stores that yield the lowest marginal benefit to the chain and (b) dealing with franchisees' potential concerns about cannibalization. [ABSTRACT FROM AUTHOR]

During the 2000s, over a dozen U.S. states passed laws that prohibit healthcare employers from mandating overtime for nurses. Using a nationwide panel data set from 2004 to 2012, we find that these mandatory overtime laws reduced the service quality of nursing homes, as measured by an increase in deficiency citations. This outcome can be explained by two undesirable changes in the staffing hours of registered nurses: decreased hours of permanent nurses and increased hours of contract nurses per resident day. We observe that the increase in deficiency citations concentrates in the domains of administration and quality of care rather than quality of life, and the severity levels of the increased citations tend to be minor rather than major. We also find that the laws' negative effect on quality is more severe in nursing homes with higher percentages of Medicare-covered residents. These observations are consistent with the predictions of a stochastic staffing model that incorporates demand uncertainty and operational flexibility. Furthermore, we rule out an alternative hypothesis that the quality decline is induced by an increase in nurse wages. This paper was accepted by Gad Allon, operations management. [ABSTRACT FROM AUTHOR]

We propose a new time-varying peaks over threshold model to study tail risk dynamics in equity markets: the laws of motion for the parameters are defined through the score-based approach. We apply the model to daily returns from U.S. size-sorted decile stock portfolios and show that large firms' tail risk increases during recessions more than small firms' tail risk. Our results are consistent with the granular hypothesis of aggregate fluctuations, and we quantify the impact of large firms' tail risk shocks on the economy. A measure of tail connectedness is proposed: evidence from international equity markets shows that tail connectedness increases during periods of turmoil. This paper was accepted by Lauren Cohen, finance. [ABSTRACT FROM AUTHOR]

This paper develops dynamic measures of the systemic risk of the financial sector as a whole. It defines systemic risk as the conditional probability of failure of a sufficiently large fraction of the total population of financial institutions. This definition recognizes that the cause of systemic distress is the correlated failure of institutions to meet obligations to creditors, customers, and trading partners. The likelihood estimators of the failure probability are based on a dynamic hazard model of correlated failure timing that captures the influence on failure timing of time-varying macro economic and sector-specific risk factors, and of spillover effects. Tests indicate that our measures provide accurate out-of-sample forecasts of the term structure of systemic risk in the United States for the period from 1998 to 2009. [ABSTRACT FROM AUTHOR]

This paper analyzes a waiting line system that is motivated by the operations of border-crossing stations between the United States and Canada. There are two main conflicting goals in such a system: high security level, which often leads to a longer line; and good customer service, which requires a shorter line. Thus, unlike other queueing systems, maintaining the average queue length within a certain range is the primary objective. This is achieved using a staffing policy, called "congestion-based staffing," or CBS, where the number of servers (inspection booths) is adjusted according to the queue length during a planning period. We first present an exact benchmark model of Markovian type based on the matrix-geometric solution. For practical CBS policies, we develop a set of closed-form formulas for the major performance measures based on regenerative cycle analysis and fluid limit approximation. Numerical examples show that these approximation formulas are simple, accurate, and robust for practitioners to use in designing CBS policies. [ABSTRACT FROM AUTHOR]

Using a data set including album sales, Internet penetration, and various demographic measures for 99 American cities over the period 1998-2003, this paper empirically examines the extent to which file sharing has caused the U.S. decline in sound-recording sales over that period. Also examined is the impact of the Internet on entertainment activities so as to help cleanse the Internet penetration coefficient of that impact. The conclusion from this analysis is that file sharing appears to have caused the entire decline in record sales and appears to have vitiated what otherwise would have been growth in the industry. [ABSTRACT FROM AUTHOR]

This paper proposes an extreme value approach to estimating interest-rate volatility, and shows that during the extreme movements of the U.S. Treasury market the volatility of interest-rate changes is underestimated by the standard approach that uses the thin-tailed normal distribution. The empirical results indicate that (1) the volatility of maximal and minimal changes in interest rates declines as time-to-maturity rises, yielding a downward-sloping volatility curve for the extremes; (2) the minimal changes are more volatile than the maximal changes for all data sets and for all asymptotic distributions used; (3) the minimal changes in Treasury yields have fatter tails than the maximal changes; and (4) for both the maxima and minima, the extreme changes in short-term rates have thicker tails than the extreme changes in long-term rates. This paper extends the standard option-pricing models with lognormal forward rates to accommodate significant kurtosis observed in the interest-rate data. This paper introduces a closed-form option-pricing model based on the generalized extreme value distribution that successfully removes the well-known pricing bias of the lognormal distribution. [ABSTRACT FROM AUTHOR]

This paper examines the possible impact of venture capital (VC) backing on the commercialization direction of technology-based start-ups by asking: To what extent (if at all) do VC-funded start-ups engage in cooperative commercialization strategies (strategic alliances or technology licensing, or both) relative to a comparable set of start-ups, and with what consequences? To address these questions, I assemble a novel data set that matches firms receiving a federal research and development subsidy through the U.S. Small Business Innovative Research program to VC-funded firms by observable characteristics in five technology-intensive industries. These data allow decoupling of cooperative activity resulting from start-up development via the passage of calendar time from that due to association with VCs. An analysis of the 696 start-ups in the sample (split by an external funding source) suggests substantial boosts in both cooperative activity associated with VC-backed firms and in the likelihood of an initial public offering. [ABSTRACT FROM AUTHOR]