Backward induction is a widely accepted principle for predicting behavior in sequential games. In the classic example of the "centipede game," however, players frequently violate this principle. An alternative is a "dynamic level-k" model, where players choose a rule from a rule hierarchy. The...

We consider a supply chain with a single supplier and two retailers. The retailers choose their orders strategically, and if their orders exceed the supplier's capacity, quantities are allocated proportionally to the orders. We experimentally study the capacity allocation game using subjects...

This paper studies a monopolist firm selling a fixed capacity. The firm sets a price before demand uncertainty is resolved. Speculators may enter the market purely with the intention of resale, which can be profitable if demand turns out to be high. Consumers may strategically choose when to...

This paper studies the role of product availability in attracting consumer demand. We start with a newsvendor model, but additionally assume that stockouts are costly to consumers. The seller sets an observable price and an unobservable stocking quantity. Consumers anticipate the likelihood of...

In kidney allocation, transplant candidates may have private information about their propensity to enjoy good outcomes after transplantation or about their relative expected improvement in quality of life after transplantation. This paper develops a mechanism design model to investigate the...

This paper studies the impact of strategic customer behavior on supply chain performance. We start with a newsvendor seller facing forward-looking customers. The seller initially charges a regular price but may salvage the leftover inventory at a lower salvage price after random demand is...

This paper develops a model of dynamic pricing with endogenous intertemporal demand. In the model, there is a monopolist who sells a finite inventory over a finite time horizon. The seller adjusts prices dynamically to maximize revenue. Customers arrive continually over the duration of the...

In this paper, we analyze the contracting issues that arise in collaborative services, such as consulting, financial planning, and information technology outsourcing. In particular, we investigate how the choice of contract type--among fixed-fee, time-and-materials, and performance-based...

In this paper, we quantify the efficiency of decentralized supply chains that use price-only contracts. With a price-only contract, a buyer and a seller agree only on a constant transaction price, without specifying the amount that will be transferred. It is well known that these contracts do...