158,339 research outputs found
Online Retailing Channel Addition: Risk Alleviation or Risk Maker?
The retailing industry traditionally considers the optimal products selection and pricing problem, a complex and challenging one, from marketing and consumer behavior\u27s perspectives. In this study, we take a risk perspective and offer an alternative solution to tackling the problem, echoing the most recent literature that looks at non-risk aspects, such as expected consumer preference, market size and predicted profitability. Adopting a mean-variance framework, our approach explicitly takes into account the interconnectedness of retail products and their impact on risk at the portfolio (retailer) level. Extending the analysis to multiple-channel decisions, our results suggest that the introduction of a new retailing channel (e.g. online shops) can reduce the portfolio risk, whereas a lack of synergy between the new channel and the existing ones may lead to a negative impact on the overall performance. We also provide managerial implications on several conditions when retailers are more economically inclined to introduce more retail channels. Interestingly, our model indicates that larger retailers are less likely to expand their online platform
Adaptive Contract Design for Crowdsourcing Markets: Bandit Algorithms for Repeated Principal-Agent Problems
Crowdsourcing markets have emerged as a popular platform for matching
available workers with tasks to complete. The payment for a particular task is
typically set by the task's requester, and may be adjusted based on the quality
of the completed work, for example, through the use of "bonus" payments. In
this paper, we study the requester's problem of dynamically adjusting
quality-contingent payments for tasks. We consider a multi-round version of the
well-known principal-agent model, whereby in each round a worker makes a
strategic choice of the effort level which is not directly observable by the
requester. In particular, our formulation significantly generalizes the
budget-free online task pricing problems studied in prior work.
We treat this problem as a multi-armed bandit problem, with each "arm"
representing a potential contract. To cope with the large (and in fact,
infinite) number of arms, we propose a new algorithm, AgnosticZooming, which
discretizes the contract space into a finite number of regions, effectively
treating each region as a single arm. This discretization is adaptively
refined, so that more promising regions of the contract space are eventually
discretized more finely. We analyze this algorithm, showing that it achieves
regret sublinear in the time horizon and substantially improves over
non-adaptive discretization (which is the only competing approach in the
literature).
Our results advance the state of art on several different topics: the theory
of crowdsourcing markets, principal-agent problems, multi-armed bandits, and
dynamic pricing.Comment: This is the full version of a paper in the ACM Conference on
Economics and Computation (ACM-EC), 201
Makespan Minimization via Posted Prices
We consider job scheduling settings, with multiple machines, where jobs
arrive online and choose a machine selfishly so as to minimize their cost. Our
objective is the classic makespan minimization objective, which corresponds to
the completion time of the last job to complete. The incentives of the selfish
jobs may lead to poor performance. To reconcile the differing objectives, we
introduce posted machine prices. The selfish job seeks to minimize the sum of
its completion time on the machine and the posted price for the machine. Prices
may be static (i.e., set once and for all before any arrival) or dynamic (i.e.,
change over time), but they are determined only by the past, assuming nothing
about upcoming events. Obviously, such schemes are inherently truthful.
We consider the competitive ratio: the ratio between the makespan achievable
by the pricing scheme and that of the optimal algorithm. We give tight bounds
on the competitive ratio for both dynamic and static pricing schemes for
identical, restricted, related, and unrelated machine settings. Our main result
is a dynamic pricing scheme for related machines that gives a constant
competitive ratio, essentially matching the competitive ratio of online
algorithms for this setting. In contrast, dynamic pricing gives poor
performance for unrelated machines. This lower bound also exhibits a gap
between what can be achieved by pricing versus what can be achieved by online
algorithms
A six-factor asset pricing model
The present study introduce the human capital component to the Fama and
French five-factor model proposing an equilibrium six-factor asset pricing
model. The study employs an aggregate of four sets of portfolios mimicking size
and industry with varying dimensions. The first set consists of three set of
six portfolios each sorted on size to B/M, size to investment, and size to
momentum. The second set comprises of five index portfolios, third, a four-set
of twenty-five portfolios each sorted on size to B/M, size to investment, size
to profitability, and size to momentum, and the final set constitute thirty
industry portfolios. To estimate the parameters of six-factor asset pricing
model for the four sets of variant portfolios, we use OLS and Generalized
method of moments based robust instrumental variables technique (IVGMM). The
results obtained from the relevance, endogeneity, overidentifying restrictions,
and the Hausman's specification, tests indicate that the parameter estimates of
the six-factor model using IVGMM are robust and performs better than the OLS
approach. The human capital component shares equally the predictive power
alongside the factors in the framework in explaining the variations in return
on portfolios. Furthermore, we assess the t-ratio of the human capital
component of each IVGMM estimates of the six-factor asset pricing model for the
four sets of variant portfolios. The t-ratio of the human capital of the
eighty-three IVGMM estimates are more than 3.00 with reference to the standard
proposed by Harvey et al. (2016). This indicates the empirical success of the
six-factor asset-pricing model in explaining the variation in asset returns
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