We investigate how a supply chain involving a risk-neutral supplier and a downside-risk-averse retailer can be coordinated with a supply contract. We show that the standard buy-back or revenue-sharing contracts may not coordinate such a channel. Using a definition of coordination of supply...

Order picking has long been identified as the most labour-intensive and costly activity for almost every warehouse; the cost of order picking is estimated to be as much as 55% of the total warehouse operating expense. Any underperformance in order picking can lead to unsatisfactory service and...

We consider a sequential decision problem where the decision maker is informed of the actual payoff with delay. We introduce a new condition, which generalizes the condition given by Blackwell and ensures that the decision maker can approach a fixed closed and convex set under delay. We show how...

In standard models of experimentation, the costs of project development consist of (a) the direct cost of running trials as well as (b) the implicit opportunity cost of leaving alternative projects idle. Another natural type of experimentation cost, the cost of holding on to the option of...

This paper proposes a new approach for modeling investor fear after rare disasters. The key element is to take into account that investors’ information about fundamentals driving rare downward jumps in the dividend process is not perfect. Bayesian learning implies that beliefs about the...

In standard models of experimentation, the costs of project development consist of (a) the direct cost of running trials as well as (b)the implicit opportunity cost of leaving alternative projects idle. Another natural type of experimentation cost, the cost of holding on to the option of...

This paper proposes a new approach for modeling investor fear after rare disasters. The key element is to take into account that investors' information about fundamentals driving rare downward jumps in the dividend process is not perfect. Bayesian learning implies that beliefs about the...

This paper formulates a continuous-time information transmission model in which an altruistic sender privately observes a stochastic state variable, and incurs a communication cost when she broadcasts a message. We characterize the sender's optimal announcement strategy using an ordinary...