Unspanned stochastic volatility (USV) refers to the inability of bonds to replicate volatility-sensitive derivative securities. Affine term structure models require special restrictions on the parameters to exhibit USV. We use a joint Eurodollar futures and options data set to estimate affine...

Managers of retail chains who seek to add new stores or close existing ones need to know the net impact of a store's opening/closure on the overall chain performance. This requires inferring the extent to which each store generates incremental sales as opposed to competing with other stores...

Film studios occasionally withhold movies from critics before their release. Because the unreviewed movies tend to be below average in quality, this practice provides a useful setting in which to test models of limited strategic thinking: Do moviegoers seem to realize that no review is a sign of...

Entrepreneurs, even more than employees, tend to locate in regions in which they have deep roots ("home" regions). Here, we examine the performance implications of these choices. Whereas one might expect entrepreneurs to perform better in these regions because of their richer endowments of...

The agglomeration of the automobile industry around Detroit, Michigan is explained using a theory in which disagreements lead employees of incumbent firms to found spinoffs in the same industry. Predictions of the theory concerning entry and firm survival are tested using data on the origin,...

A paper by Bultez and Naert in the May 1979 issue of Management Science tentatively concludes that profits are relatively insensitive to misspecification of the lag structure of advertising. We examine the conditions under which a firm's profits are most likely to be sensitive to the...

Increasingly, user-generated product reviews serve as a valuable source of information for customers making product choices online. The existing literature typically incorporates the impact of product reviews on sales based on numeric variables representing the valence and volume of reviews. In...

We consider a general model of monopoly price discrimination and characterize the conditions under which price discrimination is and is not profitable. We show that an important condition for profitable price discrimination is that the percentage change in surplus (i.e., consumers' total...

Recent product introductions such as the Xbox 360, Sony Playstation 2, and PT Cruiser have been characterized by shortage of these products. Some experts have suggested that such scarcity can be a deliberate strategy for making the product more desirable. In this paper, we empirically examine...

Motivated by the medical literature findings that physicians are inertial, we seek to understand (1) whether physicians exhibit structural persistence in drug choice (structural persistence occurs when the drug chosen for a patient depends structurally on the drug previously prescribed by the...