Management Science Review

What are the consequences for corporate takeovers when shareholders ascribe different values to a firm, with some shareholders valuing a firm more than others? How should an acquiring firm design its bid---the amount that is offered and whether to offer primarily cash or equity---and what are the implications for the takeover premia that might be paid? Similarly, how does such heterogeneity in shareholder values matter for the returns to both the target and the acquiring firms, the likelihood of success of an offer, and the evolution of the firms’ share prices following a takeover offer?

View Full Post »

Perceptions of fairness play an important role in labor market relations and affect market efficiency. While most of the previous studies have focused on behavioral effects, the article “Unfair Pay and Health” by Armin Falk, Fabian Kosse, Ingo Menrath, Pablo E. Verde, and Johannes Siegrist shows a strong link between unfair pay and heart rate variability (HRV). HRV is a stress-related early indicator of impaired cardiac autonomic control which has been shown to predict coronary heart disease. The implications of these findings could be considerable. According to the Centers for Disease Control and Prevention, one in every three deaths in the U.S. is related to cardiovascular diseases.

View Full Post »

Customized pricing has been an extended practice in B2C e-commerce for several years now. More recently, bricks-and-mortar retailers have engaged in the practice of personalized promotions. Beacon-based technology and indoor positioning systems allow to identify the location of a customer in a store through a mobile app and launch discount coupons in real time. This implies a tremendous change in the way retailers think of promotions, switching from traditional massive promotions to promotions tailored for specific individuals.

View Full Post »

Hedging is a risk minimizing strategy that people pursue in a variety of financial contexts, from the allocation of their investments to insurance purchased for their health and home. In the article “Betting Your Favorite to Win: Costly Reluctance to Hedge Desired Outcomes,” Carey Morewedge, Simone Tang, and Richard Larrick examine whether people exhibit a similar appetite for hedging in emotional contexts. Hedging could act as a form of emotional insurance that buffers negative emotions if a desired outcome does not happen. When filling out her office pool “brackets” during March Madness, a fan could bet against her favorite NCAA basketball team, so that money would minimize her disappointment if her team loses on its way to the championship.

View Full Post »

Operations and supply chain management research has traditionally taken the approach to increase profitability as the objective. As global companies increasingly globalize their supply chain, they are increasingly sourcing or manufacturing in emerging economies. Operating in such economies inevitably bring in new dimensions ­ environmental sustainability, social and economic community development, and business integrity - that are crucial to ensuring stability and growth of the whole supply chain. These dimensions necessitate the focus of not just the factories or resources linked to global supply chain, but the general welfare and economic well-being of such economies.

View Full Post »

Researchers studying firm-level productivity have, almost without exception, observed and documented large and persistent productivity differences across businesses. To explain this productivity dispersion, researchers have tried to understand the role of various factors - some internal to the firm (e.g. managerial talent) and some external (e.g. the role of government regulation). In “The Impact of Supply Chains on Firm-Level Productivity.”Serpa and Krishnan (2018) focus on the impact of supply chain factors.

View Full Post »

When dealing with an unreliable supplier, an additional reliable (although possibly more expensive) back-up supplier should always be beneficial for a manufacturer. This seems to be an extra option, which can only help. The paper “Strategic Behavior of Suppliers in the Face of Production Disruptions”, Suleyman Demirel, Roman Kapuscinski, and Man Yu warns that such an extra option changes suppliers’ behavior and may actually hurt the manufacturer.

View Full Post »

The objective of this blog is to reach outside the INFORMS community to the general public so that decision makers in government and industry are exposed to some of the most exciting work published by the journal. The challenge is to translate scientific research to the general public in a way that is meaningful and insightful for that audience.

View Full Post »

Customers (e.g., individuals or businesses) often seek their supplier’s expertise and assistance to make better-informed decisions. For example, investors rely on financial advisors to decide on their investments; patients rely on physicians to decide their treatment plans; consumer goods retailers (e.g., Target, Walmart) rely on suppliers (e.g., P&G, Kraft) to make in-store merchandising decisions such as the management of shelf-space (as in a category captain arrangement) and inventory (as in a VMI agreement). However, in most cases, the interests of the supplier and the customer often can never be fully aligned and it may not be fully possible to verify whether the supplier acted in the customer’s best interests.

View Full Post »