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3818 items in total found

Journal Articles | 2023

Role of derivatives market in attenuating underreaction to left-tail risks

Sumit Sourav, Sobhesh Kumar Agarwalla, Jayanth R. Varma

The anomalous negative relationship between left-tail risk measures and future returns has recently attracted the attention of finance researchers. We examine the role of the derivatives market in attenuating left-tail risk anomaly in India, where derivatives trade only for a subset of stocks. We find that the negative association between left-tail risk measure and future return is absent only in stocks having derivatives, indicating that derivatives trading hastens the diffusion of negative information into the stock prices. We find evidence that the information generation role of derivatives markets plays a primary role compared to investor inattention and limits to arbitrage.

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Journal Articles | 2023

When Nash meets Stackelberg

Margarida Carvalho, Gabriele Dragotto, Felipe Feijoo, Andrea Lodi, Sriram Sankaranarayanan

This article introduces a class of Nash games among Stackelberg players (NASPs), namely, a class of simultaneous noncooperative games where the players solve sequential Stackelberg games. Specifically, each player solves a Stackelberg game where a leader optimizes a (parametrized) linear objective function subject to linear constraints, whereas its followers solve convex quadratic problems subject to the standard optimistic assumption. Although we prove that deciding if a NASP instance admits a Nash equilibrium is generally a Σ𝑝2Σ2𝑝-hard decision problem, we devise two exact and computationally efficient algorithms to compute and select Nash equilibria or certify that no equilibrium exists. We use NASPs to model the hierarchical interactions of international energy markets where climate change aware regulators oversee the operations of profit-driven energy producers. By combining real-world data with our models, we find that Nash equilibria provide informative, and often counterintuitive, managerial insights for market regulators.

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Journal Articles | 2023

A framework for fair decision-making over time with time-invariant utilities

Andrea Lodi, Sriram Sankaranarayanan, Guanyi Wang

Fairness is a major concern in contemporary decision problems. In these situations, the objective is to maximize fairness while preserving the efficacy of the underlying decision-making problem. This paper examines repeated decisions on problems involving multiple stakeholders and a central decision maker. Repetition of the decision-making provides additional opportunities to promote fairness while increasing the complexity from symmetry to finding solutions. This paper presents a general mathematical programming framework for the proposed fairness-over-time (FOT) decision-making problem. The framework includes a natural abstraction of how a stakeholder’s acquired utilities can be aggregated over time. In contrast with a natural, descriptive formulation, we demonstrate that if the aggregation function possesses certain basic properties, a strong reformulation can be written to remove symmetry from the problem, making it amenable to branch-and-cut solvers. Finally, we propose a particular relaxation of this reformulation that can assist in the construction of high-quality approximate solutions to the original problem and can be solved using simultaneous row and column generation techniques.

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Journal Articles | 2023

The impact of consumer expectations and familiarity on deceptive pricing in advertising: A view from drip pricing practice

Somak Banerjee, Sujay Dutta, Abhijit Biswas, Hyokjin Kwak

Drip pricing practice, which involves promoting a seemingly low initial price and then introducing add-on price components without upfront disclosures, is commonly seen as a deceptive advertising practice that can lead to negative associations. Here, we provide an alternative perspective by investigating that whether consumers form positive or negative opinions about drip pricing depends on their expectation of encountering it and their overall familiarity with this practice. That is, this research reveals that when consumers’ general familiarity with drip pricing is low, higher expectations of drip pricing create greater perceptions of price fairness and purchase intentions. Moreover, our findings indicate that higher consumer expectations of drip pricing lead to positive attributions and evaluations of the detailed pricing information, resulting in higher perceptions of price fairness, which, in turn, increases purchase intentions. Further, we show that when consumers have high expectations of encountering drip pricing, they evaluate ­pricing information more positively and deception less harshly, resulting in greater purchase intentions than when they do not expect it.

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Journal Articles | 2023

Understanding the relationship between reviews, search and sales: A study of the Indian car market

Madhuri Prabhala, Indranil Bose

While there has been extensive research on understanding the effects of online reviews on product sales, there is not enough investigation of the inter-relationships between online reviews, online search and product sales. The study attempts to address this gap in the context of the Indian car market.

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Journal Articles | 2023

A role that takes its toll? The moderating role of leadership in role stress and exposure to workplace bullying

Piotr Stapinski, Brita Bjørkelo, Premilla D’Cruz, Eva G. Mikkelsen, Malgorzata Gamian-Wilk

The purpose of the article is to provide further evidence for the work environment hypothesis. According to the work environment hypothesis and as documented by empirical evidence, organizational factors play a crucial role in the development of workplace bullying. However, to better understand and prevent bullying at work and establish sustainable, responsible and ethical workplaces, it is crucial to understand which organizational factors are particularly important in the development of bullying and how these factors, independently and combined, act as precursors to bullying over time. One prominent theory that explains how organizational and individual factors interact is the affective events theory (AET).

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| 2023

JUE insight: Infrastructure and finance: Evidence from India’s GQ highway network

Abhiman Das, Ejaz Ghani, Arti Grover, William Kerr, Ramana Nanda

We use data from Reserve Bank of India to study the impact of India’s Golden Quadrilateral (GQ) highway project on finance-dependent activity. Loan volumes increase by 20%–30% in districts along GQ and are stronger in industries more dependent upon external finance. Loan growth begins with increases in average branch size and in places with more pre-GQ loan activity. New branch openings come later, consistent with short-run adjustment costs to expanding branch networks. These patterns are not evident in placebo tests using delayed investments in NS-EW highways. Results suggest the depth of initial financial infrastructure shapes how infrastructure investments impact localities.

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Journal Articles | 2023

How data-driven decisions help restaurants stay competitive

Debjit Roy, Eirini Spiliotopoulou, and Jelle de Vries

Today data is an increasingly important part of how restaurants create value, both on the demand side (how consumers choose a place to eat, make a reservation, give their order, and pay their bill) and the supply side (detailed preparation and food resource-management records that enable restaurants to optimize inventory and reduce waste). To remain competitive, restaurants need to change the way they approach business decisions; they need to shift focus from food cost to revenue management and exploit opportunities for scaling up. Based on their research, the authors offer six strategies to guide strategic and operational decisions.

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Journal Articles | 2023

Consumer preference for nutrition front-of-pack-label formats in India: Evidence from a large-scale experimental survey

Ranjan Kumar Ghosh, Rahul Sanghvi, Arvind Sahay

Global policy discourse emphasizes placing front-of-pack nutrition labels (FOPLs) on packaged foods, but debates continue to rage on the appropriate format. There are two key types of label formats, summary and informative. In developing countries, with mixed to low levels of education, it is advised that FOPLs need to be easily identifiable, understandable, and can influence purchase decisions. In this context, we tested the suitability of five FOPL formats in India through a randomized experimental design survey. Respondents were allocated to different groups representing the FOPLs and controls. A 15-treatment and 1 control cell between-subjects design was used for the study. Surveys were conducted on the field through face-to-face interactions with a total of 20,564 participants from all over India across regions, genders, age groups, and education levels. The results, which were validated using sub-sample tests, suggest that summary formats of Health Star Ratings and Warning Labels ranked higher on ease of identification and understanding and were also able to influence purchase intentions as compared to informative labels such as Multiple Traffic Lights, monochrome Guideline Daily Amounts, and Nutriscore. Our analysis reveals that summary FOPLs are more useful in influencing healthier food choices as compared to informative FOPL formats. The study's insights can help regulators design a policy that empowers consumers and nudges food brands toward healthier product reformulations.

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Journal Articles | 2023

Consumer preference for nutrition front-of-pack-label formats in India: Evidence from a large-scale experimental survey

Ranjan Kumar Ghosh, Rahul Sanghvi, Arvind Sahay

Global policy discourse emphasizes placing front-of-pack nutrition labels (FOPLs) on packaged foods, but debates continue to rage on the appropriate format. There are two key types of label formats, summary and informative. In developing countries, with mixed to low levels of education, it is advised that FOPLs need to be easily identifiable, understandable, and can influence purchase decisions. In this context, we tested the suitability of five FOPL formats in India through a randomized experimental design survey. Respondents were allocated to different groups representing the FOPLs and controls. A 15-treatment and 1 control cell between-subjects design was used for the study. Surveys were conducted on the field through face-to-face interactions with a total of 20,564 participants from all over India across regions, genders, age groups, and education levels. The results, which were validated using sub-sample tests, suggest that summary formats of Health Star Ratings and Warning Labels ranked higher on ease of identification and understanding and were also able to influence purchase intentions as compared to informative labels such as Multiple Traffic Lights, monochrome Guideline Daily Amounts, and Nutriscore. Our analysis reveals that summary FOPLs are more useful in influencing healthier food choices as compared to informative FOPL formats. The study's insights can help regulators design a policy that empowers consumers and nudges food brands toward healthier product reformulations.

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