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Using a continuous-time model of litigation, we show that the increasingly popular practice of third-party litigation financing has ambiguous welfare implications. A defendant and a plaintiff bargain over a settlement payment. The defendant takes costly actions to avoid deadweight losses associated with large transfers to the plaintiff. Litigation financing bolsters the plaintiff, leading to larger deadweight losses. However, by endogenously deterring the defendant from taking costly actions, litigation financing can nonetheless improve the joint surplus of the plaintiff and the defendant. In contrast to popular opinion, litigation financing does not necessarily encourage high-risk frivolous lawsuits.

Truck congestion at chemical sites is a persistent problem that is difficult to solve, even using a truck appointment system. This study presents an alternative solution to improve the flexibility of chemical sites by creating a drop-swap terminal adjacent to the site location. The terminal serves as an intermediate depot where the trucks can drop empty containers and swap them with preloaded containers without entering the site. This study aims to evaluate the performance of such a solution in mitigating truck congestion at chemical sites. The problem is modeled as a nonstationary semi-open queueing network with time-varying arrivals. We propose a combination of a fluid-flow approximation and a decomposition-aggregation method to estimate the time-dependent performance of the system. A chemical site in the Netherlands is presented as a case study. Several scenarios are tested and evaluated. Numerical results show that a drop-swap terminal can effectively reduce truck idling time and increase logistics efficiency at chemical sites. We also found that swapping containers on chassis is a cheaper and greener option to operate the terminal. However, the investment needed to support the operation should not be overlooked to sustain the benefits. The study concluded with several key messages for site operators who wish to maximize the benefit from a drop-swap terminal.

We examine how the trade shock from China influences the behavior and investment performance of overconfident CEOs in U.S. firms. We show that the rise of Chinese import competition curbs investments and improves investment value and acquisition performance for firms with overconfident CEOs. Intensified Chinese product competition also reduces the incentives for these firms to expand assets, invest out of cash flows, pursue aggressive financial policies, and increase risk exposure, and enhances their incentives to buy back shares. Overall, the evidence suggests that product market competition is an effective external governance mechanism for curbing the adverse effects of managerial overconfidence.

We analyse the competitive effects of the centralised sale of football media rights in Europe, focusing on the “Big Five” countries (England, France, Germany, Italy, Spain). Contrary to the recent findings of European competition authorities, we consider that there are arguments in favour of the relevant market for domestic media rights being club- or even match-specific. This raises the question of what competition is restricted by the centralised sale if the rights on offer do not compete. If the media rights of different clubs are indeed complementary and because of the potential efficiency gains from bundling, we conclude that the centralised sale of media rights is unlikely to be anticompetitive and may have procompetitive effects. We further show that under a club or match-specific market definition, a no-single-buyer rule likely reduces the benefits from the centralised sale and may be to the detriment of consumers.

Forward markets are believed to aggregate information about future spot prices and reduce the cost of producing the commodity. We develop a measure of the extent to which forward and spot prices agree in markets with transaction costs. Using this measure, we show that day-ahead prices better reflect real-time prices at all locations in California’s electricity market after the introduction of financial trading. We then present evidence suggesting that operating costs and input fuel use fell after the introduction of financial trading on days when the nonconvexities inherent to the production and transmission of electricity are especially relevant. (JEL D23, D24, G13, L94, L98, Q48)

We study the 2011 Austrian pay transparency law, which requires firms above a size threshold to publish internal reports on the gender pay gap. Using an event-study design, we show that the policy had no discernible effects on male and female wages, thus leaving the gender wage gap unchanged. The effects are precisely estimated, and we rule out that the policy narrowed the gender wage gap by more than 0.4 p.p.. Moreover, we do not find evidence for wage compression within establishments. We discuss several possible reasons why the reform did not reduce the gender wage gap. (JEL J16, J31, J71, K31)

In this study, I present a theoretical social learning model to investigate how confirmation bias affects opinions when agents exchange information over a social network. Hence, besides exchanging opinions with friends, agents observe a public sequence of potentially ambiguous signals and interpret it according to a rule that includes confirmation bias. First, this study shows that regardless of level of ambiguity both for people or networked society, only two types of opinions can be formed, and both are biased. However, one opinion type is less biased than the other depending on the state of the world. The size of both biases depends on the ambiguity level and relative magnitude of the state and confirmation biases. Hence, long-run learning is not attained even when people impartially interpret ambiguity. Finally, analytically confirming the probability of emergence of the less-biased consensus when people are connected and have different priors is difficult. Hence, I used simulations to analyze its determinants and found three main results: i) some network topologies are more conducive to consensus efficiency, ii) some degree of partisanship enhances consensus efficiency even under confirmation bias and iii) open-mindedness (i.e. when partisans agree to exchange opinions with opposing partisans) might inhibit efficiency in some cases., Status: Accepted (Mathematical Social Sciences, Elsevier)

The steep voltage slopes of today’s wide-bandgap (WBG), fast-switching power semiconductors — like SiC and GaN — lead amongst other challenges to reflection on long cables and thereby overvoltage at inductive loads. To enable the use of these inverters with motors without specially reinforced insulation the voltage slopes need to be slowed down. This article presents a new low-loss countermeasure, which involves the parallel connection of two half-bridges via an interphase transformer. For this one half-bridge is delayed relative to the other one by a delay tuned to a resonant circuit. Undesired DC components in the cross-current of the interphase transformer occur due to non-idealities in the voltage symmetry. The subsequent DC magnetization ultimately can cause the core to saturate. The paper describes the effects due to inaccurate timings and the aspects to keep in mind when dimensioning the magnetic core. Also, this article describes an approach to deal with the undesired current components using a closed-loop control. For that, a special differential-mode shunt is used which enables a dedicated measurement of the cross-current mean value and mitigates the influence of the switching frequency. Finally, the controller concept is presented. The controller is implemented and verified on a 500 kVA SiC inverter test bench.

As the number of deliveries continues to increase, last-mile transport causes rising congestion rates and pollution in urban environments. Integrating last-mile deliveries with existing public transport infrastructure, e.g., metros or trams, can make them more sustainable. This integration can implement in a shared infrastructure mode, where passenger and cargo vehicles share the same rail network, or a shared vehicle mode, where vehicles simultaneously transport cargo and passengers. Evaluating the resulting systems entails modelling several interlinking planning problems. This work presents a component-based simulation to evaluate design decisions for shared passenger and freight transport on fixed infrastructure. We introduce a linear mixed-integer program for optimising the train schedule and the allocation of cargo with a lexicographical objective function that prioritises passenger transport while minimising cargo delivery delay. We analyse the interplay of operational modes, scheduling solutions, and settings in a computational simulation study. The results show that a well-planned train schedule can significantly contribute to service quality. Furthermore, a system with shared vehicles is more robust towards changes in demand whereas a system with only shared an infrastructure is a valid option if we consider a high or unlimited dwell time for cargo vehicles.

This paper presents a reliable microgrid for residential society with control methods to design grid forming inverter (GFI) to emulate the seamless-synchronization features to deal with the dynamic concerns of the grid. In this microgrid a photovoltaic (PV)-based GFI with a control scheme in parallel with a PV-battery supported inverter with an enhanced current control is considered to operate under non-ideal grid voltage conditions. The PV-GFI is adaptable to operate either in islanded mode (IAM) or grid integrated mode (GIM) depending under the grid conditions. An adapted power control technique is implemented such that power demand of local loads and harmonic currents are compensated by respective distributed generation. Moreover, the active power demand of all local loads is shared between the main grid and respective local DG. The adapted power controller achieves transient free operation even under the load disturbances. The proposed control methods of microgrid are validated in simulation under various operating conditions.

This paper provides causal evidence that greater minority representation on school boards translates into greater investment in minority students. Focusing on California school boards, I obtain causal effects by instrumenting for minority (specifically, Hispanic) school board representation using the random order in which candidates appear on election ballots. Given the dearth of school-level expenditure data, I introduce detailed records from California’s School Facility Program (SFP), a capital investment program for which I observe how school boards allocate the marginal dollar within district. Instrumental variables estimates show that an additional Hispanic school board member increases SFP-funded investments at high-Hispanic schools within the district by 69 percent, with significantly lower effects at low-Hispanic schools. High-Hispanic schools also exhibit gains in student achievement of 0.08 standard deviations. I attribute this improved performance broadly to increased investment in these schools: new instructor hiring at high-Hispanic schools decreases by 23 percent. These results provide the first causal evidence that school board politics—and, specifically, school board ethnic composition—shapes education finance policy at the local level. I conclude that enhancing minority representation on school boards could help combat disparities in education finance and achievement.

We study long-run shareholder outcomes for over 64,000 global common stocks during the January 1990 to December 2020 period. We document that the majority, 55.2% of U.S. stocks and 57.4% of non-U.S. stocks, underperform one-month U.S. Treasury bills in terms of compound returns over the full sample. Focusing on aggregate shareholder outcomes, we find that the top-performing 2.4% of firms account for all of the $US 75.7 trillion in net global stock market wealth creation from 1990 to December 2020. Outside the US, 1.41% of firms account for the $US 30.7 trillion in net wealth creation.

This study provides the first empirical evidence that the Federal Reserve (the Fed) systematically retrieves micro-level accounting reports to aid its understanding of the state of the macroeconomy. Using unique data identifying its direct access of corporate SEC filings, we show that the Fed tracks firms that are bellwethers and industry leaders, or that can engender systemic risk. The qualitative information in the Fed-accessed periodic reports explains the Fed’s GDP growth forecasts for up to four quarters, after controlling for contemporaneous aggregate earnings and other economic information. However, professional forecasts fail to incorporate such qualitative accounting information. In addition, this qualitative information is reflected in the tone of the ensuing FOMC meeting discussions as well as in Fed forecasts of key macro demand and supply factors. Overall, our evidence suggests important externalities of micro-level accounting reports, especially qualitative disclosures, on the central bank’s macroeconomic forecasts and, by extension, monetary policy. Data Availability: Data are available from public sources. JEL Classifications: E58; G20; M41; M45.

As additive manufacturing (AM) processes become more ubiquitous in engineering, design, and manufacturing, the need for a workforce skilled in designing for additive manufacturing (DfAM) has grown....

Background: Multiple clinical trials of modern antipsychotics have failed in pediatric samples. One possibility for these failures is the use of a primary outcome measure that was developed for adults. Surprisingly, the psychometric properties of primary outcome measures have never been reported for a pediatric sample using modern methods. The present study’s aim is to use a pediatric sample to evaluate the psychometrics of the most used primary outcome measure in pediatric schizophrenia trials, the Positive and Negative Syndrome Scale (PANSS). Methods: To evaluate the factor structure, item characteristics, and treatment sensitivity of the PANSS in a pediatric sample, secondary analyses of PANSS data at baseline and weekly throughout an 8-week randomized double-blind study of three antipsychotic agents (registered and previously published) were conducted. Subjects were 118 youths receiving outpatient psychiatric treatment for schizophrenia spectrum disorders (Mage=14.26(2.41) years). Outcomes: A 10-item short form, keeping two strongest items for each factor, had r=.89 with the full-length scale. Each of the 5 2-item subscales has alphas ranging from .66 to .84. Item Response Theory (IRT) found that the 10-item scale and 2-item subscores had high reliability across the severity range typical of clinical trials. Criterion validity was high, with equal sensitivity to treatment effects. Interpretation: The short version eliminates weaker items in the pediatric population without loss of sensitivity to treatment effects and thus may be more appropriate for subsequent pediatric trials. Funding: NIMH funded the original protocol; NDA archived the data; Signant paid for secondary statistical analyses. Declaration of Interest: Dr. Findling receives or has received research support, acted as a consultant and/or has received honoraria from Acadia, Adamas, Aevi, Afecta, Akili, Alkermes, Allergan, American Academy of Child & Adolescent Psychiatry, American Psychiatric Press, Arbor, Axsome, Daiichi-Sankyo, Emelex, Gedeon Richter, Genentech, Idorsia, Intra-Cellular Therapies, Kempharm, Luminopia, Lundbeck, MedAvante-ProPhase, Merck, MJH Life Sciences,NIH, Neurim, Otsuka, PaxMedica, PCORI, Pfizer, Physicians Postgraduate Press, Q BioMed, Receptor Life Sciences, Roche, Sage, Signant Health, Sunovion, Supernus Pharmaceuticals, Syneos, Syneurx, Takeda, Teva, Tris, and Validus. Dr. Youngstrom has received royalties from the American Psychological Association and Guilford Press, consulted with Signant Health about psychological assessment, and received funding from NIMH. He is the founder and Executive Director of Helping Give Away Psychological Science (HGAPS.org). Dr. Sikich receives or has received research support from NIMH, NICHD, and Roche. She has received partial salary support from Tris. She has a patent submission through Duke University for a new formulation of intranasal oxytocin. Dr. Frazier receives or has received funding from NIMH, NICHD, Autism Speaks, Roche pharmaceuticals, and Fulcrum. Dr. McClellan receives or has received funding from NIMH. Dr. Daniel is an employee and equity holder in Signant Health. Dr. Busner is an employee and equity holder in Signant Health. Ethical Approval: The secondary analyses were reviewed and approved by the UNC Chapel Hill IRB.

We examine the effectiveness of a quality assurance mechanism that relies on a third-party’s reputation. We focus on the market for fine and rare wines where auction houses intermediating between sellers and buyers have also claimed expertise to assess product authenticity. An auction house’s reputation can sustain product quality in this market only if consumers absorb relevant information and punish houses who fail at screening out counterfeits. We test the existence of such reputational effects by studying the market responses to two disclosures of houses having auctioned fake wine. We find that one house experienced negligible losses after a 2008 event involving a limited number of counterfeit bottles. However, three houses associated with a 2012 incident involving thousands of bottles are found to have suffered reputational losses. These losses are demonstrated over the following year by an average 4.5% decrease in equilibrium sales prices of all wines, and a slight decrease in sales quantities of older wines, relative to other houses.

We study the inter-temporally optimal innovation strategies of incumbent manufacturing firms that compete in an established market and can extend their product line through product innovation. Firms invest in production capacity and R&D knowledge stock, where the R&D knowledge stock and the current R&D investment determine the hazard rate of innovation. Our findings show that the firms’ optimal R&D strategies are driven by a subtle interplay between the relative positions of their R&D knowledge stocks and their current relative positions on the established market. First, we find that under symmetric investment costs the knowledge leader should spend more on R&D than the knowledge laggard only if it has a substantially smaller market share on the established market. If the knowledge leader’s market share is sufficiently large, its optimal investment in R&D is so small that its innovation rate is lower than the knowledge laggard’s. Second, optimal investment in R&D knowledge is negatively affected by the opponent’s production capacity on the established market if the competitor has not innovated yet. However, we find that this effect is reversed after the competitor has successfully introduced the new product on the submarket. Third, the manufacturing firm with higher costs of adjusting production capacity for the established product has a higher incentive to engage in product innovation and might even achieve a higher total discounted profit than its more efficient competitor.

This study addresses the influence of build orientation and loading direction on the static and dynamic mechanical properties of three-dimensional-printed thermoplastic polyurethane-based lattice s...

This paper studies the causal impact of political connections on innovation. Using a unique hand-collected data set of sudden deaths of politically connected independent directors (i.e., retired government officials) in Chinese firms, we find that an unexpected loss of political connections increases a firm’s patent applications by 34% (14 patents). The innovation response is more pronounced in firms with stronger connections: when the connected directors held higher-level bureaucratic positions or when firms operate within their geographical jurisdictions. Upon losing political connections firms face higher competitive pressure and divert resources from rent-seeking into innovation investment. Our findings highlight the role of competition in the substitution between political connections and innovation, particularly in settings where formal institutions are weak.

To maximize productivity, manufacturers must organize and equip their workforces to efficiently handle variable workloads. Their success depends on their ability to assign experienced and skilled workers to specialized tasks and coordinate work on production lines. Worker turnover may disrupt such efforts. We use staffing, productivity, and pay data from within a major consumer electronics manufacturer’s supply chain to study how firms should manage worker turnover and its effects using production decisions, wages, and inventory. We find that worker turnover impedes coordination between assembly line coworkers by weakening knowledge sharing and relationships. Publicly available unit-cost estimates imply that worker turnover accounts for $206–274 million in added direct expenses alone from defectively assembled units failing the firm’s stringent quality control. To evaluate managerial alternatives, we structurally estimate a dynamic equilibrium model (an Experience-Based Equilibrium) encompassing (1) workers’ endogenous turnover decisions and (2) the firm’s weekly planning of its production scheduling and staffing in response. In counterfactual analyses, a less turnover-prone, hence more productive, workforce significantly benefits the firm, reducing its variable production costs by 4.5%, or an estimated $928 million for the studied product. Such benefits justify paying higher efficiency wages even to less skilled workforces; furthermore, interestingly, rational inventory management policies incentivize self-interested firms to reduce rather than tolerate turnover. This paper was accepted by Vishal Gaur, operations management. Funding: The authors gratefully acknowledge support from the data sponsor, and K. Moon gratefully acknowledges support from the Wharton Dean’s Research Fund and the Claude Marion Endowed Faculty Scholar Award of the Wharton School. Supplemental Material: The online appendices are available at https://doi.org/10.1287/mnsc.2022.4476 .

We revisit the pros and cons of cartel criminalization with focus on its possible introduction in the EU. We document a recent phenomenon that we name EU ``leniency inflation", whereby leniency has been increasingly awarded to many, and sometimes all members of a cartel. We argue that, coupled with the non-disclosure of leniency statements and the insufficient protection of leniency applicants from damage claims introduced by the 2014 Damages Directive, it may have led to a decrease in cartel convictions. Together with evidence on the current level of fines, this points at the need to introduce criminalization. We then explore data on US criminal enforcement (1990-2015) to highlight potential areas of concern for policymakers, if criminal sanctions will be implemented in the EU. Among other things, we find that individuals in cartels where multiple offending firms are involved, are less likely to obtain a prison sentence.

A energia solar é considerada um dos recursos de energia renovável mais importantes para diminuir a dependência de combustíveis fósseis. Portanto, este estudo tem como objetivo realizar uma revisão sistemática da literatura sobre pesquisas de alto impacto sobre os impactos ambientais evitados com o uso da energia solar fotovoltaica no setor industrial para investigar tendências neste corpo da literatura. Para tanto, foram aplicados filtros ao portfólio bruto entre 209 artigos e selecionados 22 para identificar os estudos mais relevantes e de alto impacto na área. Os resultados mostram as principais tendências do referido corpo da literatura, as possíveis conexões da energia solar fotovoltaica e os impactos ambientais na indústria, bem como os principais investigadores que realizam os estudos. Este estudo fornece uma visão geral dos impactos evitados com o uso da energia solar fotovoltaica nas possibilidades de pesquisas futuras.

This study aims to analyze the award-winning efforts from the 2019/2019 edition of the National Innovation Award (Premio Nacional de Inovacao – PNI), based on the different types of innovation in Micro and Small Enterprises (MSEs). The support of public policies for Brazilian businesses, boost awards in terms of recognition for the search for new solutions in order to make businesses more sustainable through innovation. Methodologically classified as of an applied nature, this research has a qualitative descriptive-explanatory approach. Its object of analysis is a group of companies with innovative characteristics, validated by PNI awards. Such companies were selected among the winners of PNI’s most recent edition that were also participating in SEBRAE’s and CNPq’s Local Innovation Agent Program (Agente Local de Inovacao – ALI). Data has been obtained through structured individual interviews with the companies’ representatives, questionnaire application and documentary research. After conducting the study, similarities were observed between the surveyed companies. They have been in the market for at least 7 and at most 26 years, and they have used the award’s questionnaire as a self-assessment tool. It was observed that their representatives are also involved in different types of ventures. It is important to highlight the presence of some of these in the international market and in startup investments. The results obtained are presented as the set of implementations of the types of innovation in the companies studied, which, through their efforts and actions, become subjects that enable mechanisms to stimulate competitiveness in small businesses. With the aid of literature, supported by researchers and authors, followed by the use of multiple case studies and document analysis, this study’s relevance has been associated with PNI’s award-winning companies, incorporating them into a context of innovative practice models and allowing them to contribute to business sustainability

This paper proposes new holding horizon (HH) measures of active management, and examines the relation between horizon and manager skill. Our HH measures identify, in the cross-section, funds with better long-term alphas, while reported turnover identifies, in the time-series, when a particular fund is likely to exhibit a higher alpha in the short run. This superior long-term performance of long HH funds is due to their superior skills in picking stocks with higher future cash-flow growth. Moreover, stocks largely held by long-horizon funds outperform stocks largely held by short-horizon funds by 2.4%-3.8% per year, adjusted for risk, over the following five-year period.

Operating under both supply-side and demand-side uncertainties, a mobile-promotion platform conducts advertising campaigns for individual advertisers. Campaigns arrive dynamically over time, which is divided into seasons; each campaign requires the platform to deliver a target number of mobile impressions from a desired set of locations over a desired time interval. The platform fulfills these campaigns by procuring impressions from publishers, who supply advertising space on apps via real-time bidding on ad exchanges. Each location is characterized by its win curve, that is, the relationship between the bid price and the probability of winning an impression at that bid. The win curves at the various locations of interest are initially unknown to the platform, and it learns them on the fly based on the bids it places to win impressions and the realized outcomes. Each acquired impression is allocated to one of the ongoing campaigns. The platform’s objective is to minimize its total cost (the amount spent in procuring impressions and the penalty incurred due to unmet targets of the campaigns) over the time horizon of interest. Our main result is a bidding and allocation policy for this problem. We show that our policy is the best possible (asymptotically tight) for the problem using the notion of regret under a policy, namely the difference between the expected total cost under that policy and the optimal cost for the clairvoyant problem (i.e., one in which the platform has full information about the win curves at all the locations in advance): The lower bound on the regret under any policy is of the order of the square root of the number of seasons, and the regret under our policy matches this lower bound. We demonstrate the performance of our policy through numerical experiments on a test bed of instances whose input parameters are based on our observations at a real-world mobile-promotion platform. This paper was accepted by Baris Ata, stochastic models and simulation. Supplemental Material: The online appendices are available at https://doi.org/10.1287/mnsc.2022.4441 .

We study the influence of bank competition on U.S. public borrowers’ accounting conservatism by exploiting the staggered adoption of the Riegle-Neal Interstate Banking and Branching Efficiency Act (IBBEA) of 1994, which increased the threats of new bank entrants and actual bank entry. We find that borrowers’ conditional conservatism fell after IBBEA. Conservatism fell more for firms located in states with weak incumbent banks and states with more out-of-state entrants, especially entrants with better monitoring technologies. The decrease in conservatism partially stems from borrowers’ increased investment and risk-taking incentives. Conservatism fell more for firms relying more on bank loans, especially those that borrowed loans for the first time after IBBEA and for firms having lower dedicated institutional ownership and board independence. We also find that loans included fewer covenants and that bank loan borrowers became less likely to choose Big N auditors and industry specialist auditors after IBBEA. Data Availability: Data are available from the public sources cited in the text. JEL Classifications: G21; G28; K23; M41.

We develop a theory wherein a priori identical banks may trade loans in a search market with reusable information. The equilibrium is unique, but its nature depends on the probability of a future market state. When the probability of a boom is high, all banks hold no equity and do no screening. When this probability is low, all banks choose a high level of equity and screen loans. For intermediate probability values, the equilibrium is heterogeneous, with some banks posting equity and screening and others avoiding equity and screening. This endogenously arising heterogeneity generates interbank trading. The credit market is partially frozen in a recession: only high-capital banks have continued funding access. Low-capital banks obtain funding by selling legacy loans to banks with “financial muscle,” so market funding is reallocated from low-capital to high-capital banks. This paper was accepted by Bruno Biais, finance.

The limitation of executive compensation has been a matter of public and policy debate for at least 20 years. We examine a regulatory action in Austria in 2014 where the tax deductibility of the total value of executive compensation is unavoidably limited. We find no average effects on the growth or composition of executives’ pay. However, the deductibility limit affects the managers of firms with low bargaining power and of firms with strong corporate governance, indicating that they are affected by the deductibility limit. Additionally, the contract durations for executives decrease after renegotiation. We further find that affected firms experience cuts in investment and research and development, suggesting that shareholders bear part of the economic burden. Our results indicate that the effectiveness of other reforms, such as the Tax Cuts and Jobs Act of 2017, in restricting executive pay is rather limited. JEL Classifications: H21; H22; M41.

Thomson coil actuators consist of an electric coil repelling a metallic disk. They are considered the fastest electromagnetic actuators for short travels and for this reason are favored for DC circuit breakers. Although the basic physics are understood, the actuator’s few components are very interdependent, making for a difficult analysis. Actuator design so far has thus been limited to trial and error based on finite-element models. In this paper, a novel approach is presented based on the electromagnetic frequency response of the actuator. This method is shown to be an intriguing analysis tool and various actuator design directions are presented. Experimental results provide a confirmation of the analysis.

Consumers gain information about the evolving value of a product both prior to purchase and when owning a product. We consider a model where both these types of gaining information are possible. The information gained when owning the product may affect future product purchases. We characterize when the consumer chooses to purchase the product if the consumer does not own it, the expected interval of time between purchases, and the expected number of product purchases over time. We find that, keeping product duration fixed, the optimal fixed price is independent of the initial product valuation if that valuation is sufficiently low such that a consumer not owning the product does not purchase it immediately, and characterize how the price charged affects the consumer information gathering strategy. When the firm can also choose product duration and there are no costs of production, we find that the firm chooses an expected production duration that is infinitely small, and charges a flow price for the consumer to use the product. We also characterize how the extent of learning when owning and when not owning the product, the duration of the product, and the discount rate affect the optimal consumer and firm strategies.

There is a growing demand for multi-port power converters for managing multiple energy sources and loads. To that end, a dual-input single-output dc-dc converter is proposed in this article. The converter integrates two different and low-voltage dc sources into a dc bus. Pulse width modulation is used to control the transfer energy from the input ports to the output port. The discontinuous conduction mode (DCM) operation of the converter has enabled the soft-switching operation in the primary switches. Moreover, it helps avoid the high-frequency transformer (HFT) saturation when the two input voltage sources have different values. The detailed analysis of the proposed dc-dc converter is presented in this article along with the simulation and experimental results obtained from a 150 W hardware prototype to validate its operation.

In the context of subscription-based services, many technologies improve over time and service providers can provide increasingly powerful service upgrades to their customers, but at a launching cost, and the expense of the sales of existing products. We propose a model of technology upgrades and characterize the optimal pricing and timing of technology introductions for a service provider who price-discriminates among customers based on their upgrade experience, in the face of customers who are averse to switching to improved offerings. We first characterize optimal discriminatory pricing for the infinite horizon pricing problem with fixed introduction times. We reduce the optimal pricing problem to a tractable optimization problem and propose an efficient algorithm for solving it. Our algorithm computes optimal discriminatory prices within a fraction of a second, even for large problem instances. We then show that periodic introduction times, combined with optimal pricing, enjoy optimality guarantees. In particular, we first show that as long as the introduction intervals are constrained to be non-increasing, it is optimal to have periodic introductions after an initial warm-up phase. When allowing general introduction intervals, we show that periodic introduction intervals after some time are optimal in a more restricted sense. Numerical experiments suggest that it is generally optimal to have periodic introductions after an initial warm-up phase. Finally, we focus on a setting in which the firm does not price-discriminate based on customers' experience. We show both analytically and numerically that in the non-discriminatory setting, a simple policy of Myerson (i.e., myopic) pricing and periodic introductions enjoys good performance guarantees.

Understanding the drivers of market concentration in the generic pharmaceutical industry is essential to guaranteeing the availability of low-cost generics. In this paper, we develop a structural model to capture the multiple determinants governing manufacturers’ entry decisions; in particular, we focus on how manufacturing complexity and the regulatory environment for generics approval affect concentration in drug markets. We estimate the model using data collated from six disparate sources. We find that manufacturing complexity, as reflected in the number of active ingredients, for example, significantly reduces the likelihood of generics entry. Moreover, the delay in the review process for the generics applications significantly affects the number of firms entering a market. Our policy simulations suggest that a shortened drug approval review time significantly increases the average number of entrants per market and reduces the fraction of markets with no generics entry; however, a notable portion of markets would still lack any generic competition. This paper was accepted by Jayashankar Swaminathan, operations management. Supplemental Material: The online appendix is available at https://doi.org/10.1287/mnsc.2022.4423 .

We study systemic risk in a supply chain network where firms are connected through purchase orders. Firms can be hit by cost or demand shocks, possibly leading to defaults. These shocks propagate through the supply chain network via input-output linkages between buyers and suppliers. Firms endogenously take contingency plans to mitigate the impact generated from disruptions. They reroute undelivered orders to alternative buyers and switch excess demand to different suppliers. We show that, as long as firms have large initial equity buffers, network fragility is low if both buyer and supplier diversification is low. We argue that horizontal mergers may lead to a more fragile network if firms have small initial equity buffers. We find that a single sourcing strategy is beneficial for a firm only if the default probability of the firm's supplier is low. Otherwise, a multiple sourcing strategy is ex-post more cost effective for a firm.

Generation X directors are slowly replacing Baby Boomers on U.S. corporate boards and will eventually dominate corporate boardrooms in the U.S. and around the world. We provide the first robust evidence of a significantly positive effect of Generation X directors on corporate performance. The positive effect is not driven by other director attributes such as age, sex, ethnicity, or professional expertise, and is robust to endogeneity checks using instrumental variables. Part of the improvement in firm performance can be attributed to the commitment of Generation X directors to corporate social responsibility and to the inclusion of women on corporate boards.

This paper presents the internal energy balance of a modular multilevel cascade converter with photovoltaic arrays as distributed energy resources. This converter is characterized by a modular arm structure composed of bidirectional cascaded chopper cells with floating DC capacitors, where each cell is connected to a photovoltaic array through a DC/DC converter. A continuous model and a control method are proposed to maintain the internal energy balance and achieve independent voltage control of all the floating DC capacitors, allowing the tracking of the maximum power point for each photovoltaic array. The operation with asymmetric energy generation at different levels of irradiance is discussed to maintain the internal energy balance without distortions in the DC link and AC output currents, focusing on the operation with individual cells with zero energy generated from PV array. This topology and control method is suitable for hybrid multi-terminal high voltage DC systems and hybrid generation systems, such as wind-solar energy systems. Experiments are presented to validate the proposed model and control method.

This paper proposes a comprehensive steady-state analysis for a front-end Modular Multi-Parallel Rectifiers (MMR) system with a shared DC-link. A generalised mathematical representation for n number of parallel rectifiers is proposed. The MMR is analysed for both Continuous Conduction Mode (CCM) and Discontinuous Conduction Mode (DCM). In addition, the CCM and DCM boundary of the MMR is identified mathematically. A 60kW Simulink model for the MMR is utilised to confirm the proposed steady-state mathematical modelling equations.

There is a lively debate on whether football fans should pay an additional security fee, added to the price of tickets, to finance police activities on match days. This paper investigates the price effect on the demand for tickets in a dynamic setting, by considering two subgroups of spectators, namely fans and hooligans. In contrast to the previous literature, we analyze a situation in which the demand from each subgroup causes a negative social externality for members of the other group but, simultaneously, a positive one for members of the same group. We show that charging a security fee may start a dynamic process, leading to fewer fans and more hooligans attending matches and thus, counterintuitively to even more violence. Therefore, the present study provides an argument to refrain from charging a security fee. As an alternative economic solution, we discuss the strategy of outpricing hooligans.

We investigate the effects of the use of different sources of investment leverage, i.e. securities with embedded leverage and traditional margin accounts, on the portfolio performance of retail investors, recognizing that these effects may be conditional on investor attention. We find that investors who trade on margin underperform those who do not have margin accounts, but we also find that investors who trade securities with embedded leverage show an even poorer performance than investors who trade on margin. The negative effect of leverage usage decreases with greater investor attention, measured by portfolio monitoring frequency. These results suggest that more attentive investors gain more from the use of investment leverage.

We investigate the effects of financial reporting on current employee job search; i.e., whether firms' public financial reports cause their employees to reevaluate their jobs and consider leaving. We develop a simple model in which current employees use earnings announcements to inform job search decisions, and empirically measure job search based on employees' activity on a popular job market website. We find that job search by current employees increases significantly during earnings announcement weeks, especially when employees are more mobile and when within-firm information frictions are greater. We also find that employees use earnings announcements to update their expectations about their employers' economic prospects, consistent with learning. Our paper contributes to the burgeoning labor and accounting literature by providing among the first evidence closely linking financial reports to employee learning and job search.

We conduct a pre-registered field experiment with low-income grocery shoppers to study how behavioral interventions can improve the effectiveness of healthy food subsidies. Our unique design enables us to elicit choices and deliver subsidies both before and at the point of purchase. We examine the effects of two non-restrictive changes to the choice environment: giving shoppers a choice over the type of subsidy they receive and introducing a waiting period before the shopping trip to prompt deliberation about the food purchase decision. Combined, our interventions substantially improve the effectiveness of subsidies, increasing healthy purchases by 61% relative to a choice-less subsidy restricted to healthy food, and 199% relative to an un-subsidized control group. We discuss how these low-cost, scalable interventions can help mitigate nutritional inequality.

We undertake the first empirical analysis of profit shifting by U.S. firms during foreign tax holidays. We show that foreign tax holidays have become a prevalent and powerful tax planning strategy among U.S. firms. We find that U.S. firms significantly increase their outbound profit shifting while participating in foreign tax holidays. However, we also find that profit shifting associated with tax holidays comes at the cost of increased tax uncertainty. Our results have important implications for policy making and for understanding firm behavior.

In laser powder bed fusion (LPBF) additive manufacturing, the melt pool (MP) characteristics are key indicators for process and part defects. For example, the laser scan location on the build plate...

SUMMARY Independent assurance of extended external reports (EER) is one of the most significant trends in today’s global assurance profession. When companies decide to purchase third-party assurance on EER, they need to decide whether to engage their financial statement auditor or a different assurance provider. We examine factors that impact this decision, and the consequences of this decision on financial statement audit quality and cost. We find that independence concerns are associated with companies choosing different EER assurance providers from their incumbent financial statement auditors, while providers’ expertise in EER assurance and the recent trend of integrating nonfinancial information into the annual report promote the use of the same provider. We further find some evidence that companies with the same provider attesting to both financial statements and EER benefit from having higher financial statement audit quality without paying significantly different audit fees.

Fused filament fabrication (FFF) with the use of metal-polymer filaments offers a cost-effective solution in additively manufacturing metal parts. Nevertheless, the quality and dimensional characte...

Many users relate additive manufacturing (AM) directly with fast and high-quality prototyping and manufacturing. Nevertheless, already within the different printing techniques there are significant...

Health Information Exchanges (HIEs) are designed to improve the efficiency and quality of healthcare through enhanced information sharing between disparate health entities. The objective of this study is to systematically examine the impact of HIE use in emergency departments (EDs) on quality and efficiency of medical care. We focus on two dimensions of healthcare quality, namely length of stay and 30-day readmission rate. From hospitals’ efficiency perspective, we examine if HIE access reduces the likelihood that more than one doctor would be consulted for a treatment. Drawing on complementarity theory, we adopt a contingency framework and examine the moderating role of patient-specific prior information (breadth of focal patient’s information and prior interaction between a focal patient and attending doctor) and doctor’s experience with the HIE on the effectiveness of HIE access on quality and efficiency of medical care. To accomplish our objectives, we leverage a unique panel data of actual HIE access by physicians who practice in a hospital system that participate in an HIE. The individual patient-level dataset comprises detailed medical provider information, patient-level medical information, and various other information related to procedures that were performed. Leveraging this unique and comprehensive data on physicians’ access of HIE system, we examine the effect of HIE use on the three outcome variables. After controlling for a battery of patient-specific, doctor-specific, and hospital-specific control variables, our results show that HIE access in EDs results in reduction in length of stay and 30-day readmission rate, and reduces the likelihood that more than one doctor would be consulted. We find that the benefits of HIE access are greater with greater breadth of patient information, greater experience of the attending physician with the HIE, and prior interaction between the focal patient and focal attending doctor. We account for endogeneity due to self-selection in HIE use and perform additional tests to ensure that our results are robust. Based on our results, we offer insights to practitioners and academicians alike on how adopting and sustaining HIE can yield better patient-level and provider-level outcomes.

We address how value relevance of accounting information evolved as the new economy developed. Prior research concludes that accounting information—primarily earnings—has lost relevance. We consider more accounting items and find no decline in combined value relevance from 1962 to 2018. We assess evolution in each item’s value relevance and find increases, most notably for items related to intangible assets, growth opportunities, and alternative performance measures, which are important in the new economy. The number of relevant items also increases. We also consider separately new economy, old economy profit, and old economy loss firms. The trends are more pronounced for, but extend beyond, new economy firms. We base inferences on a nonparametric approach that does not require specifying the valuation relation. Taken together, our findings reveal an evolution to a more nuanced, but not declining, relation between accounting information and share price. JEL Classifications: C14; G10; G18; M40; M41.

We explore whether accounting fraud can be detected using the information of firms economically linked to a focal firm. Specifically, we examine whether customer information disclosed by a supplier firm, combined with customers’ accounting information, helps to detect the supplier’s revenue fraud. We first confirm the economic link between the supplier and customers by showing a strong positive correlation between the supplier’s sales growth and the growth rate of total customer purchases. We then introduce two variables based on customer accounting information—the discrepancy between supplier sales growth and customer purchase growth and customer excess purchases—and show that they are predictive of supplier revenue fraud. We conduct a battery of cross-sectional tests and generally find results to vary cross-sectionally in a predictable way. Finally, the out-of-sample tests indicate that adding the two variables to Dechow, Ge, Larson, and Sloan (2011) model increases fraud prediction accuracy. JEL Classifications: G14; M40; M41; M42.