Ramón y Cajal: Mediation and Meritocracy

The Ramón y Cajal Program promotes the hiring of top researchers in Spanish R&D centers and academic institutions. The centralized mechanism associated to the Program is analyzed. The paper models it as a two-sided matching market and studies if it provides the incentives to increase the quality of the researchers hired. We analyze the mechanism both under complete and incomplete information. The comparison of the theoretical findings with the available data points out that the mechanism provides poor incentives and does not prevent collusion between research departments and candidates in the hiring process.Matching Markets; Preagreements; Implementation.

The Subsidiarity Bias in Regulation

We study the choice of the regulatory structure when a regulated firm engages in different activities for different countries. Under decentralization each activity is regulated independently and the contracts offered to the firm suffer from two oppos- ite distortions with respect to centralization: the competition between regulatory authorities forces them to offer too high-powered incentive contracts; however, be- cause the ownership structure of the firm is dispersed across the countries, each regulator does not fully internalize the effect of his regulation on the firm's rent and contracts tend to be too low-powered. When the activities of the firm are suf- ficiently substitutable we show that decentralization always leads to an inefficient drift of the regulatory contracts towards fixed-price contracts. Nonetheless, when regulators have private agendas and possess the discretion to distort their policy to gain the support of some interest groups, then decentralization of the regulat- ory powers may be preferred to centralization as competition between regulatory authorities eradicates their discretionary power.incentives, decentralization, regulation.

Optimal Local and Remote Controllers with Unreliable Communication

We consider a decentralized optimal control problem for a linear plant controlled by two controllers, a local controller and a remote controller. The local controller directly observes the state of the plant and can inform the remote controller of the plant state through a packet-drop channel. We assume that the remote controller is able to send acknowledgments to the local controller to signal the successful receipt of transmitted packets. The objective of the two controllers is to cooperatively minimize a quadratic performance cost. We provide a dynamic program for this decentralized control problem using the common information approach. Although our problem is not a partially nested LQG problem, we obtain explicit optimal strategies for the two controllers. In the optimal strategies, both controllers compute a common estimate of the plant state based on the common information. The remote controller's action is linear in the common estimated state, and the local controller's action is linear in both the actual state and the common estimated state

Task Assignment and Organizational Form

This paper shows that a firm prefers a process-based task assignment compared to a function based one if the tasks are from functional areas which are neither too complementary nor too substitutable. We consider several projects with contributions from several functional areas. The organization can be structured along processes like product lines (M-form) or along functional areas like marketing or production (U-form). The U-form enables cost savings due to specialization or scale economies. We show that the more effective incentives under the M-form might outweigh these savings if the functions are neither too complementary nor too substitutable.

Task assignment and organizational form

This paper shows that a firm prefers a process-based task assignment compared to a function based one if the tasks are from functional areas which are neither too complementary nor too substitutable. We consider several projects with contributions from several functional areas. The organization can be structured along processes like product lines (M-form) or along functional areas like marketing or production (U-form). The U-form enables cost savings due to specialization or scale economies. We show that the more effective incentives under the M-form might outweigh these savings if the functions are neither too complementary nor too substitutable. --Task Assignment,Organizational Form,Incomplete Contracts

A review of non-cooperative newsvendor games with horizontal inventory interactions

There are numerous applications of game theory in the analysis of supply chains where multiple actors interact with each other in order to reach their own objectives. In this paper we review the use of non-cooperative game theory in inventory management within the newsvendor framework describing a single period inventory control model with the focus on horizontal interactions among multiple independent newsvendors. We develop a framework for identifying these types of horizontal interactions including, for example, the models with the possibility of inventory sharing via transshipments, and situations with substitutable products sold by multiple newsvendors. Based on this framework, we discuss and relate the results of prior research and identify future research opportunities