Contract Design for Collaborative Response to Service Disruptions

This dissertation studies firms' strategic interactions in anticipation of random service disruption following technology failure. In particular it is aimed at understanding how contracting decisions between a vendor and one or multiple clients affect the firms' subsequent decisions to ensure disruption response and recovery are managed as efficiently as possible. This dissertation consists of three studies that were written as standalone papers seeking to contribute to the literature on contract design and technology management in operations management. Together, the three studies justify the importance of structuring the right incentives to mitigate disruption risks. In the first study we contribute to this literature by means of an analytical model which we use to examine how a client and vendor should balance investments in response capacity when both parties' efforts are critical in resolving disruption and each may have different risk preferences. We study the difference in the client's optimal expected utility between a case in which investment in response capacity is observable and a case in which it is not and refer to the difference in outcomes between the two cases as the cost of complexity. Firstly, we show that the cost of complexity to the client is decreasing in the risk aversion of vendor but increasing in her own risk aversion. Secondly, we find that a larger difference in risk aversion between a client and vendor leads to underinvestment in system uptime in case the client's investment is observable, yet the opposite happens when the client’s investment is not observable. In the second study we further examine the context of the first study through a controlled experiment. We examine how differences in risk aversion and access to information on a contracting partner’s risk preferences interact in affecting contracting and investment decisions between the client and vendor. Comparing subject decisions with the conditionally optimal benchmarks we arrive at two observations that highlight possible heuristic decision biases. Firstly, subjects tend to set and hold on to an inefficiently high investment level even though it is theoretically optimal to adjust decisions under changing differences in risk preferences. Secondly, subjects tend to set and hold on to a penalty that is too high when interacting with more risk averse vendors and too low in case the vendor is equally risk averse. Furthermore, cognitive feedback on the vendor’s risk aversion appears to have counterproductive effects on subject’s performance in the experiment, suggesting cognitive overload can have a reinforcing effect on the heuristic decision biases observed. In the third study we construct a new analytical model to examine the effect of contract design on a provider's response capacity allocation in a setting where multiple clients may be disrupted and available response capacity is limited. The results show that while clients may be incentivized to identify and report network disruptions, competition for scarce emergency resources and the required investment in understanding their own exposure may incentivize clients to deliberately miscommunicate with the vendor.This work was supported by the Economic and Social Research Council [Award No. ES/J500033/1]. Additional funding was provided by Cambridge Judge Business School and Downing College

Static-light meson masses from twisted mass lattice QCD

We compute the static-light meson spectrum using two-flavor Wilson twisted mass lattice QCD. We have considered five different values for the light quark mass corresponding to 300 MeV < m_PS < 600 MeV. We have extrapolated our results, to make predictions regarding the spectrum of B and B_s mesons.Comment: 7 pages, 2 figures, talk given at the XXVI International Symposium on Lattice Field Theory, July 14 - 19 2008, Williamsburg, Virginia, US

TextWorldExpress: Simulating Text Games at One Million Steps Per Second

Text-based games offer a challenging test bed to evaluate virtual agents at language understanding, multi-step problem-solving, and common-sense reasoning. However, speed is a major limitation of current text-based games, capping at 300 steps per second, mainly due to the use of legacy tooling. In this work we present TextWorldExpress, a high-performance implementation of three common text game benchmarks that increases simulation throughput by approximately three orders of magnitude, reaching over one million steps per second on common desktop hardware. This significantly reduces experiment runtime, enabling billion-step-scale experiments in about one day.Comment: 6 page

METHANOGENIC CONVERSION OF 3-S-METHYLMERCAPTOPROPIONATE TO 3-MERCAPTOPROPIONATE

Anaerobic metabolism of dimethylsulfoniopropionate, an osmolyte of marine algae, in anoxic intertidal sediments involves either cleavage to dimethylsulfide or demethylation to 3-S-methylmercaptopropionate (MMPA) and subsequently to 3-mercaptopropionate. The methanogenic archaea Methanosarcina sp. strain MTP4 (DSM 6636), Methanosarcina acetivorans DSM 2834, and Methanosarcina (Methanolobus) siciliae DSM 3028 were found to use MMPA as a growth substrate and to convert it stoichiometrically to 3-mercaptopropionate. Approximately 0.75 mol of methane was formed per mol of MMPA degraded; methanethiol was not detected as an intermediate. Eight other methanogenic strains did not carry out this conversion. We also studied the conversion of MMPA in anoxic marine sediment slurries. Addition of MMPA (500 mu M) resulted in the production of methanethiol which was subsequently converted to methane (417 mu M). In the presence of the antibiotics ampicillin, vancomycin, and kanamycin (20 mu g/ml each), 275 mu M methane was formed from 380 mu M MMPA; no methanethiol was formed during these incubations. Only methanethiol was formed from MMPA when 2-bromoethanesulfonate (25 mM) was added to a sediment suspension. These results indicate that in natural environments MMPA could be directly or indirectly a substrate for methanogenic archaea.</p

Estimating prevalence and diagnostic test characteristics of bovine cysticercosis in Belgium in the absence of a ‘gold standard’ reference test using a Bayesian approach

A Bayesian model was developed to estimate values for the prevalence and diagnostic test characteristics of bovine cysticercosis (Taenia saginata) by combining results of four imperfect tests. Samples of 612 bovine carcases that were found negative for cysticercosis during routine meat inspection collected at three Belgian slaughterhouses, underwent enhanced meat inspection (additional incisions in the heart), dissection of the predilection sites, B158/B60 Ag-ELISA and ES Ab-ELISA. This Bayesian approach allows for the combination of prior expert opinion with experimental data to estimate the true prevalence of bovine cysticercosis in the absence of a gold standard test. A first model (based on a multinomial distribution and including all possible interactions between the individual tests) required estimation of 31 parameters, while only allowing for 15 parameters to be estimated. Including prior expert information about specificity and sensitivity resulted in an optimal model with a reduction of the number of parameters to be estimated to 8. The estimated bovine cysticercosis prevalence was 33.9% (95% credibility interval: 27.7-44.4%), while apparent prevalence based on meat inspection is only 0.23%. The test performances were estimated as follows (sensitivity (Se) specificity (Sp)): enhanced meat inspection (Se 2.87% - Sp 100%), dissection of predilection sites (Se 69.8% - Sp 100%), Ag-ELISA (Se 26.9% - Sp 99.4%), Ab-ELISA (Se 13.8% - Sp 92.9%)