The Intentional Base-on-ball Phenomenon in Baseball: A Statistical Analysis and Strategic RecommendationsKappy, Andrew January 2005 (has links)
The game of baseball is amenable to a variety of strategies that affect short-term outcomes. This paper employs regression analysis, simulation, and cognitive analysis of mental biases to analyze the strategic scenario known as the "Intentional Base-on-Balls" and proposes a model to explain that strategy and predict its effectiveness. <br /><br /> The results of this study suggest that managers are prone to Type II errors, that is, issuing an Intentional Base-on-Ball in a situation where objective analysis suggests otherwise. Results further suggest that the ratio of Type I errors to Type II errors is disproportional to the ratio of their respective costs. This imbalance points to a subjective component to the decision-making process, one that can be explained by biases and cognitive errors. <br /><br /> The results and model described in this paper may allow managers to avoid future mistakes and improve their decision-making ability.
Galbreth, Michael Ryan
14 April 2006
The condition of the used items acquired for remanufacture is often highly variable, and this variability creates numerous management challenges for remanufacturing firms. Management decisions regarding whether or not a given item should be remanufactured and where that remanufacturing should occur can be quite complex in practice. Sorting policies the rules specifying which used products should be remanufactured and at which facility have received limited attention in the literature. In this work, I examine the case of a remanufacturer who acquires unsorted used products as needed, e.g. from third party brokers. First, I derive optimal acquisition and sorting policies to meet both known and uncertain demands when the yield for a given sorting policy is deterministic and the firm operates a single remanufacturing facility. I then extend the analysis to the case where yield is uncertain, presenting both a newsvendor-type heuristic as well as an exact algorithm for determining optimal policies in these cases. Finally, I consider an environment in which both domestic and offshore facilities are available for remanufacturing. By analyzing both a two-period model and a multi-period model with ongoing demand, I identify situations in which domestic-only, offshore-only, and a mixed strategy using both facilities are optimal. This work contributes to the remanufacturing literature by presenting a variety of models, applicable to a wide range of remanufacturing environments, for managing used product condition variability through the optimal acquisition and sorting of used items.
05 December 2005
My dissertation focuses on the incentives from executive stock and stock option ownership, how these incentives affect the welfare of firms different stakeholders, and how these stakeholders respond. In the first chapter, I investigate whether CEO stock and stock option ownership affects firms cost of public debt financing. I find that CEO stock ownership reduces firms borrowing cost in the public capital market, but the more interesting finding is regarding stock options. Specifically, CEO stock option ownership increases firms borrowing cost if the CEOs option portfolio has a highly convex payoff structure and the reverse is true if the payoff structure of the CEOs option portfolio is close to linear. These results highlight the importance of differentiating among stock options based on the convexity of their payoff structures. The second chapter of the dissertation examines the role that CEO stock and stock option ownership plays in firms choice between debt financing and equity financing. I find support for the hypothesis that in order to enhance the value of their option portfolios, CEOs with a higher sensitivity of wealth to stock return volatility are more likely to choose debt financing over equity financing, even if the latter is in the best interest of shareholders. The implication is that rather than aligning the interests of shareholders and managers, stock options create an agency problem which results in CEOs pursuing suboptimal financing policy and capital structure. In the third chapter, I examine how the presence of commercial-banker directors at non-financial companies affects these firms CEO compensation policy. I find that bankers on boards have significantly negative effects on the level of CEO equity incentives, and the effect is stronger at firms with higher stock return volatility, when banker directors sit on smaller boards, and when banker directors have been on the boards for at least four years. These results support the conjecture that the conflict of interest between commercial-banker directors and shareholders at non-financial firms induces these directors to lower the sensitivity of CEO wealth to shareholder value.
Pool, Veronika Krepely
17 August 2006
Three separate issues are studied in the three chapters of this thesis in connection with liquidity and trading activity in financial markets. The first chapter investigates whether price discovery in the option market is enhanced on heavy option volume days. I find that it is; more specifically, when option volume is high, implied volatilities are more informative. This is consistent with the idea that on average, abnormal trading represents information induced trading, rather than behavioral biases. The result is invariant to controlling for trading frictions that may affect the choices of informed traders. The second chapter extends the volume-volatility literature and documents that on average, surprise option volume is significantly positively related to stock volatility. Moreover, a significant portion of the cross-sectional variation in the relation is explained by firm and market characteristics that describe information asymmetry. Thus, my findings are consistent with the Mixture of Distribution hypothesis, and I conclude that that the impact of option trading reflects informed trading in the option market. The third chapter studies stock liquidity in an asset pricing context. I find that the positive risk-return relation is restored once the empirical specification includes liquidity. Hence; the failure to account for liquidity could explain the mixed results in previous empirical studies.
25 June 2007
This dissertation consists of three essays. The first chapter examines the valuation effect of information asymmetry and the role of financial intermediaries as information gathering and processing experts. In a sample of cross-border mergers and acquisitions made by U.S. firms, we find that acquirers advised by investment banks from target home countries experience significantly higher announcement-period abnormal returns than other acquirers. This supports the hypothesis that local advisors have informational advantages over non-local advisors in assessing the true value of target assets and helping acquirers to avoid overpayment. We also document that acquirers advised by local banks are less likely to use stock as the payment method, which is consistent with the argument that acquirers advised by local banks bear less asymmetric information risk. Finally, we document that the time to complete an acquisition is shorter when a bidder is advised by a local bank. In the second chapter, we document that foreign independent directors serve on the boards of 14.6% of S&P 1500 firms over the 1998-2003 period. Using firm level fixed effects regressions, we find that companies with foreign independent directors are associated with lower firm performance measured by Tobins Q. Furthermore, Tobins Q is deceasing in the percentage of foreign independent directors. However, the negative relation between foreign independent directors and firm performance is substantially weakened when these firms have foreign operations. We also find that foreign independent directors are more likely to miss board meetings than domestic independent directors. Finally, firms with foreign independent directors, and especially when they sit on board audit committees, are more likely to misreport earnings. This body of evidence suggests that foreign independent directors are less effective monitors and contribute to weak corporate governance. In the third chapter, we present evidence on the benefits of changes in control from mergers and acquisitions. We find that the stronger the acquirers shareholder rights relative to the targets, the higher the synergy created by an acquisition. This result supports the hypothesis that acquisitions of firms with poor corporate governance by firms with good corporate governance generate higher total gains.
01 May 2008
This project is concerned with the process by which individuals consume and process reputational information, and how reputations inform decisions to engage in trusting behavior, especially in online market contexts. In this dissertation I develop a social cognitive model, grounded in schema theory (Fiske & Taylor, 1991; Markus & Zajonc, 1985), to explain how individuals process social information into reputation types, and how reputations inform trusting behavior. After a review of three bodies of reputation literaturethe evolutionary perspective, the firm-level perspective, and theories of interpersonal reputationI propose two distinct reputation sub-constructs: (1) hearsay reputation, reputational information originating from sources other than personal experience, and (2) experiential reputation, reputational information derived from personal interaction with the reputed party. I hypothesize that both hearsay and experiential reputation, independently, predict trusting behavior. I further hypothesize that when both types are available, individuals will privilege experiential reputation over hearsay reputation. I also hypothesize that the relationship between both types of reputation and trusting behavior is partially mediated by the trusting partys affective response to the trusted partys reputation. The effect of a firms tenure in the marketplace is also discussed. A total of ten hypotheses are tested in a series of three studies, using first a trust game (Berg, Dickhaut, & McCabe, 1995), next a simulated internet retail environment, and finally a simulated online auction environment. Taken together, results provide strong support for the hypothesized models. Limitations and directions for future research are discussed.
17 April 2007
Organizational misbehavior is defined as any intentional action by a member of an organization that violates core organizational and/or societal norms. Much of the literature on organizational misbehavior focuses on individual level determinants while giving very little attention to the social factors. Although some research indicates that organizational misbehavior is socially contagious, the mechanism that facilitates such transmission has not been theorized or meaningfully tested. I argue that a work groups misbehavior influences individual member misbehavior through the creation of social information (i.e., awareness and prevalence of misbehavior), and this relationship is moderated by motivation (i.e., injustice), group factors (i.e., cohesion and informal sanctions) and personality (i.e., negative affectivity and honesty/humility). Using a longitudinal research design, I test this model by investigating the change in work team members behavior over time and using a sample of 47 work teams and 214 team members. My results indicate that interpersonally directed misbehavior (such as making fun of coworkers, political backstabbing, gossip, or ethnic, racial or religious remarks) and organizationally directed misbehavior (ie., stealing office supplies, surfing the internet instead of working, showing up late for work or taking a longer break than is permitted) are spread through the social information that team members have of their coworkers misbehavior. Perceptions of low work group cohesion, informal sanctions against misbehavior, and Honesty-Humility strengthened this relationship. Low interactional justice perceptions increased these effects for interpersonally directed misbehavior but not for organizationally directed misbehavior. Managers and organizational leaders can discourage this behavior through the recruitment and selection (hiring) process, managing organizational culture, and addressing issues of fairness and justice in the workplace.
19 June 2009
This dissertation studies price discovery processes, stock order imbalances, and trading patterns around seasoned equity offerings. First chapter studies how the volatility of a stock is affected by the trading activity of other stocks. I construct a model of price discovery process after a public announcement. New information generates differences of opinion among investors, and the differences generate pricing error and volatility. Investors can reduce their differences by consulting the prices of stocks affected by the same information. A stocks volatility and pricing error is a decreasing function of peer stock trading activity, because investors can learn more from a larger price data. I test the implications of the model in NASDAQ stocks, and find that stocks with a larger opportunity to learn from peer stock prices have a lower volatility, a smaller pricing error, and a weaker tendency to mean-revert. Second chapter studies relation between information and stock order imbalance using corporate earnings announcements. Before information is publicly announced, order imbalance does not have a reliable predictive power for the upcoming announcements. When information is announced, order imbalance moves independently of the information, implying that market makers quickly adjust their quotes before trades take place. After the announcement, order imbalance has a positive correlation with past information. Third chapter studies the determinants of the buying / selling pattern around seasoned equity offerings (SEOs) and their effect on underpricing. I find that the trading pattern is mainly driven by market makers inventory management activity before an issue date and underwriters price support activity afterwards. I also find that SEO underpricing is decreasing in the amount of price support activity, after controlling for endogeneity and other known factors of underpricing. This result implies that underwriters can reduce issuer equity flotation costs by raising their price support activity, albeit at an added cost to the underwriter.
15 April 2010
Trust is considered to be the cornerstone of relationship marketing in B2B contexts. However, recent studies in this area suggest that high trust levels can be detrimental to buyer-supplier relationships. I refer to this phenomenon as the dark side of trust. My dissertation explores this notion by conducting interviews with procurement managers to understand the dysfunctional effects of high trust levels. Moreover, I investigate empirically, the curvilinear effects of multidimensional trust (cognitive and affective trust) on performance outcomes, along with moderating conditions that enhance the effectiveness of cognitive and affective trust on outcomes across different phases of the buyer-supplier relationship lifecycle. My research indicates that: 1) high levels of trust are associated with potential negative consequences by making relational partners vulnerable and exposing them to opportunism, 2) cognitive trust and affective trust have differential impact on performance outcomes such that cognitive trust has a significant quadratic impact, while affective trust has a non-significant quadratic impact, and 3) monitoring conflicts with cognitive trust in the build-up phase, but augments it in the decline phase; conversely, it works with affective trust to accomplish maximum benefits in the build-up phase, but clashes in the decline phase.
31 July 2008
Previous cross-cultural research focuses on the main effects of culture while neglecting the social contexts of negotiation. My dissertation examines how the interaction between cultural and contextual factors affects business negotiation. Taking a dynamic constructivist approach, I propose that cultural differences in negotiation are exacerbated under certain conditions, but attenuated under others. I apply this view to Chinese and American negotiators, including both negotiations within- and between members of these two cultures. Two sets of experiments with over 250 business negotiation simulations (including both intra-cultural and inter-cultural negotiation) under 14 different social conditions are designed to test these hypotheses. I found that the difference in relationship frame between Chinese and American negotiators was most salient in the high accountability/ingroup conditions, and such a difference in turn influenced fixed-pie perceptions and joint gain.
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