We investigate how the manager of a publicly traded firm may distort operational decisions to signal product quality when he/she receives equity-based incentives offered by shareholders. We show that the shareholders' optimal incentive contract induces the manager to engage in wasteful actions....

Driven by increasing costs in the traditionally-regarded low-cost manufacturing bases (e.g., China), many firms have started to outsource their production to the regions of even lower costs (e.g., Southeast Asia). However, a new environment may involve higher cost uncertainty and severer...

This paper studies contract design between a retailer and two or more competing manufacturers who supply substitutable products to the retailer for sales in a consumer market. We consider a setting in which the same contracts are used in each period of a planning horizon. We first show that it...

When a firm faces an uncertain demand, it is common to procure supply using some type of option in addition to spot purchases. A typical version of this problem involves capacity being purchased in advance, with a separate payment made that applies only to the part of the capacity that is...

Many agricultural commodities are traded in both forward and spot markets. Yet, at the time of signing forward contracts, firms (i.e., agricultural producers) face significant yield risk. This paper studies the interplay of random yield and forward market in a market with spot and forward...