The well-documented rating inflation of incentivized reviews (IRs) can mislead consumers into choosing a product that they would otherwise not buy. To protect consumers from this undesirable influence, the U.S. Federal Trade Commission recommends that reviewers conspicuously disclose any material connection they may have with sellers. In theory, such disclosures safeguard consumers by motivating reviewers to be truthful and inducing consumers to discount inflated IR ratings. Our research finds, however, that IR disclosure accomplishes neither. Specifically, our empirical analysis of consumer reviews on Amazon reveals that, even with disclosure, (1) rating inflation of IRs remains, and (2) this inflation boosts sales at consumers’ expense. Finally, we propose an alternative approach to eliminate rating inflation of IRs and empirically demonstrate its effectiveness. These findings have important implications for consumers, firms, and ongoing policy discussions around IRs. This paper was accepted by Duncan Simester, marketing. Funding: S. Park gratefully acknowledges financial support from the Darla Moore School of Business Research Grant Program at the University of South Carolina. W. Shin gratefully acknowledges financial support from the Brian R. Gamache Endowed Professorship at the University of Florida. J. Xie gratefully acknowledges financial support from the JCPenney Endowed Professorship at the University of Florida. Supplemental Material: The online appendix and data are available at https://doi.org/10.1287/mnsc.2023.00930 .
有据可查的激励性评论（IRs）造成的评分膨胀可能会误导消费者选择本来不会购买的产品。为了保护消费者免受这种不良影响，美国联邦贸易委员会建议评论者在显著位置披露他们与卖家可能存在的任何实质性联系。从理论上讲，这种披露可以激励评论者实事求是，诱导消费者放弃虚高的投资者关系评级，从而保护消费者的利益。然而，我们的研究发现，投资者关系披露并没有达到这两个目的。具体来说，我们对亚马逊上消费者评论的实证分析表明，即使进行了披露，（1）投资者回报率的虚高现象依然存在，（2）这种虚高现象以牺牲消费者利益为代价促进了销售。最后，我们提出了消除投资者关系评级膨胀的替代方法，并通过实证证明了其有效性。这些发现对消费者、企业以及当前围绕投资者关系的政策讨论具有重要意义。本文已被市场营销部的 Duncan Simester 接受。资助：S. Park 感谢南卡罗来纳大学达拉-摩尔商学院研究资助项目提供的资金支持。W. Shin 感谢佛罗里达大学 Brian R. Gamache 捐赠教授的资助。J. Xie 感谢佛罗里达大学 JCPenney 捐赠教授职位的资助。补充材料：在线附录和数据见 https://doi.org/10.1287/mnsc.2023.00930 。
{"title":"Disclosure in Incentivized Reviews: Does It Protect Consumers?","authors":"Sungsik Park, Woochoel Shin, Jinhong Xie","doi":"10.1287/mnsc.2023.00930","DOIUrl":"https://doi.org/10.1287/mnsc.2023.00930","url":null,"abstract":"The well-documented rating inflation of incentivized reviews (IRs) can mislead consumers into choosing a product that they would otherwise not buy. To protect consumers from this undesirable influence, the U.S. Federal Trade Commission recommends that reviewers conspicuously disclose any material connection they may have with sellers. In theory, such disclosures safeguard consumers by motivating reviewers to be truthful and inducing consumers to discount inflated IR ratings. Our research finds, however, that IR disclosure accomplishes neither. Specifically, our empirical analysis of consumer reviews on Amazon reveals that, even with disclosure, (1) rating inflation of IRs remains, and (2) this inflation boosts sales at consumers’ expense. Finally, we propose an alternative approach to eliminate rating inflation of IRs and empirically demonstrate its effectiveness. These findings have important implications for consumers, firms, and ongoing policy discussions around IRs. This paper was accepted by Duncan Simester, marketing. Funding: S. Park gratefully acknowledges financial support from the Darla Moore School of Business Research Grant Program at the University of South Carolina. W. Shin gratefully acknowledges financial support from the Brian R. Gamache Endowed Professorship at the University of Florida. J. Xie gratefully acknowledges financial support from the JCPenney Endowed Professorship at the University of Florida. Supplemental Material: The online appendix and data are available at https://doi.org/10.1287/mnsc.2023.00930 .","PeriodicalId":18208,"journal":{"name":"Manag. Sci.","volume":"9 1","pages":"7009-7021"},"PeriodicalIF":0.0,"publicationDate":"2023-09-28","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"139334913","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Mark A. Chen, Shuting Sophia Hu, Joanna Wang, Qinxi Wu
Real-world contractual agreements between firms are often incomplete, leading to suboptimal investment and loss of value in supply chain relationships. To what extent can blockchain technology help alleviate problems arising from contractual incompleteness? We examine this issue by exploiting a quasi-natural experiment based on the staggered adoption of U.S. state laws that increased firms’ in-state ability to develop, adopt, and use blockchain technology. We find that, after exposure to a pro-blockchain law, firms with greater asset specificity exhibit more positive changes to Tobin’s Q, research and development, and blockchain-related innovation. Also, such firms appear to rely less on vertical integration, form more strategic alliances, and shift their emphasis to less geographically proximate customers. Overall, our results suggest that blockchain technology can help firms remedy constraints and inefficiencies arising from contractual incompleteness. This paper has been accepted by Lin William Cong, Special Issue of Management Science: Blockchains and crypto economics. Supplemental Material: The data files and online appendix are available at https://doi.org/10.1287/mnsc.2022.04139 .
现实世界中，企业之间的合同协议往往不完整，导致供应链关系中的次优投资和价值损失。区块链技术能在多大程度上帮助缓解合同不完整带来的问题？我们利用一个准自然实验来研究这个问题，该实验基于美国各州交错通过的法律，这些法律提高了州内企业开发、采用和使用区块链技术的能力。我们发现，在接触支持区块链的法律后，资产专用性更强的企业在托宾Q值、研发和区块链相关创新方面表现出更积极的变化。此外，这类企业似乎更少依赖纵向一体化，形成更多战略联盟，并将重点转向地理位置较近的客户。总之，我们的研究结果表明，区块链技术可以帮助企业弥补因合同不完整而产生的制约和低效。本文已被林威廉-聪（Lin William Cong）的《管理科学特刊》（Special Issue of Management Science）录用：区块链与加密经济学》。补充材料：数据文件和在线附录见 https://doi.org/10.1287/mnsc.2022.04139 。
{"title":"Can Blockchain Technology Help Overcome Contractual Incompleteness? Evidence from State Laws","authors":"Mark A. Chen, Shuting Sophia Hu, Joanna Wang, Qinxi Wu","doi":"10.1287/mnsc.2022.04139","DOIUrl":"https://doi.org/10.1287/mnsc.2022.04139","url":null,"abstract":"Real-world contractual agreements between firms are often incomplete, leading to suboptimal investment and loss of value in supply chain relationships. To what extent can blockchain technology help alleviate problems arising from contractual incompleteness? We examine this issue by exploiting a quasi-natural experiment based on the staggered adoption of U.S. state laws that increased firms’ in-state ability to develop, adopt, and use blockchain technology. We find that, after exposure to a pro-blockchain law, firms with greater asset specificity exhibit more positive changes to Tobin’s Q, research and development, and blockchain-related innovation. Also, such firms appear to rely less on vertical integration, form more strategic alliances, and shift their emphasis to less geographically proximate customers. Overall, our results suggest that blockchain technology can help firms remedy constraints and inefficiencies arising from contractual incompleteness. This paper has been accepted by Lin William Cong, Special Issue of Management Science: Blockchains and crypto economics. Supplemental Material: The data files and online appendix are available at https://doi.org/10.1287/mnsc.2022.04139 .","PeriodicalId":18208,"journal":{"name":"Manag. Sci.","volume":"45 1","pages":"6540-6567"},"PeriodicalIF":0.0,"publicationDate":"2023-09-27","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"139335574","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
We examine digital product markets in which consumers are heterogeneous in their propensity to actively interact with other users and valuations increase with the share of active users (e.g., social network platforms). We propose a model in which entrepreneurs can issue digital claims (tokens) to promise exclusive access to benefits that specifically enhance the utility of active users. This allows entrepreneurs to extract consumer surplus through price discrimination. Because there is an incentive to renege on the “exclusivity” promise ex post and expand the network of active users, the credibility of this commitment resides in a costly technology (blockchain) that embeds automatic contracts in the tokens sold and limits entrepreneurial discretion. We show that the profitability of token-based sales increases with entrepreneurial ability and the intensity of network effects. This paper was accepted by Will Cong, Special Issue of Management Science: Blockchains and crypto economics. Supplemental Material: The internet appendix and data are available at https://doi.org/10.1287/mnsc.2023.4917 .
我们对数字产品市场进行了研究，在这些市场中，消费者在与其他用户积极互动的倾向上是异质的，并且估值会随着活跃用户比例的增加而增加（例如社交网络平台）。我们提出了一个模型，在这个模型中，创业者可以发行数字债权（代币），承诺独享专门提高活跃用户效用的利益。这样，创业者就可以通过价格歧视攫取消费者剩余。由于存在事后违背 "排他性 "承诺并扩大活跃用户网络的动机，因此这种承诺的可信度取决于成本高昂的技术（区块链），这种技术将自动合约嵌入所售代币中，限制了创业者的自由裁量权。我们的研究表明，代币销售的盈利能力会随着创业能力和网络效应的强度而增加。本文已被《管理科学》特刊 Will Cong 接收：区块链和加密经济学》。补充材料：互联网附录和数据见 https://doi.org/10.1287/mnsc.2023.4917 。
{"title":"Utility Tokens, Network Effects, and Pricing Power","authors":"Kirill Shakhnov, Luana Zaccaria","doi":"10.1287/mnsc.2023.4917","DOIUrl":"https://doi.org/10.1287/mnsc.2023.4917","url":null,"abstract":"We examine digital product markets in which consumers are heterogeneous in their propensity to actively interact with other users and valuations increase with the share of active users (e.g., social network platforms). We propose a model in which entrepreneurs can issue digital claims (tokens) to promise exclusive access to benefits that specifically enhance the utility of active users. This allows entrepreneurs to extract consumer surplus through price discrimination. Because there is an incentive to renege on the “exclusivity” promise ex post and expand the network of active users, the credibility of this commitment resides in a costly technology (blockchain) that embeds automatic contracts in the tokens sold and limits entrepreneurial discretion. We show that the profitability of token-based sales increases with entrepreneurial ability and the intensity of network effects. This paper was accepted by Will Cong, Special Issue of Management Science: Blockchains and crypto economics. Supplemental Material: The internet appendix and data are available at https://doi.org/10.1287/mnsc.2023.4917 .","PeriodicalId":18208,"journal":{"name":"Manag. Sci.","volume":"162 1","pages":"6625-6640"},"PeriodicalIF":0.0,"publicationDate":"2023-09-26","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"139335990","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Traditional two-sided platforms (e.g., Amazon, Uber) rely primarily on commission contracts to generate revenues and fuel growth, whereas their decentralized counterparts (e.g., Uniswap, Filecoin) often forego these in favor of token retention. What economics underpin this choice? We show that with properly designed initial coin offerings (ICOs), both mechanisms can independently alleviate market failures at the initial fundraising stage and incentivize long-term platform building. However, they achieve this in different ways. Although commission contracts often lead to higher profits for founders, token retention leads to higher service levels, benefiting the users and service providers. In essence, token retention surrenders a fraction of earnings to better align with the tenets of decentralized governance. Combining both mechanisms can add value, but only in relatively limited cases. These findings offer guidance and a possible rationale for why platforms may want to favor one mechanism over the other or use both. This paper was accepted by Will Cong, Special Issue of Management Science: Blockchains and crypto economics. Funding: This work is funded by the Mack Institute at the Wharton School, University of Pennsylvania. Supplemental Material: The online appendix is available at https://doi.org/10.1287/mnsc.2021.02076 .
传统的双面平台（如亚马逊、优步）主要依靠佣金合同来创造收入和促进增长，而它们的去中心化平台（如 Uniswap、Filecoin）往往放弃佣金合同，转而保留代币。这种选择的经济学基础是什么？我们的研究表明，如果初始代币发行（ICO）设计得当，这两种机制都能独立缓解初始筹资阶段的市场失灵，并激励长期的平台建设。然而，它们实现这一目标的方式各不相同。虽然佣金合同通常会给创始人带来更高的利润，但代币留存则会提高服务水平，使用户和服务提供商受益。从本质上讲，代币留存让渡了一部分收益，从而更好地符合去中心化治理的原则。将这两种机制结合起来可以增加价值，但仅限于相对有限的情况。这些发现提供了指导和可能的理论依据，说明为什么平台可能希望偏重一种机制而不是另一种，或者同时使用两种机制。本文已被《管理科学》特刊的 Will Cong 接受：区块链和加密经济学》。资助：本工作由宾夕法尼亚大学沃顿商学院马克研究所（Mack Institute at the Wharton School, University of Pennsylvania）资助。补充材料：在线附录见 https://doi.org/10.1287/mnsc.2021.02076 。
{"title":"Decentralized Platforms: Governance, Tokenomics, and ICO Design","authors":"Jingxing Gan, Gerry Tsoukalas, Serguei Netessine","doi":"10.1287/mnsc.2021.02076","DOIUrl":"https://doi.org/10.1287/mnsc.2021.02076","url":null,"abstract":"Traditional two-sided platforms (e.g., Amazon, Uber) rely primarily on commission contracts to generate revenues and fuel growth, whereas their decentralized counterparts (e.g., Uniswap, Filecoin) often forego these in favor of token retention. What economics underpin this choice? We show that with properly designed initial coin offerings (ICOs), both mechanisms can independently alleviate market failures at the initial fundraising stage and incentivize long-term platform building. However, they achieve this in different ways. Although commission contracts often lead to higher profits for founders, token retention leads to higher service levels, benefiting the users and service providers. In essence, token retention surrenders a fraction of earnings to better align with the tenets of decentralized governance. Combining both mechanisms can add value, but only in relatively limited cases. These findings offer guidance and a possible rationale for why platforms may want to favor one mechanism over the other or use both. This paper was accepted by Will Cong, Special Issue of Management Science: Blockchains and crypto economics. Funding: This work is funded by the Mack Institute at the Wharton School, University of Pennsylvania. Supplemental Material: The online appendix is available at https://doi.org/10.1287/mnsc.2021.02076 .","PeriodicalId":18208,"journal":{"name":"Manag. Sci.","volume":"884 1","pages":"6667-6683"},"PeriodicalIF":0.0,"publicationDate":"2023-09-12","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"139340810","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Decentralized exchanges (DEXs) are an essential component of the nascent decentralized finance (DeFi) ecosystem. The most common DEXs are so-called automated market makers (AMMs): smart contracts that pool liquidity and process trades as atomic swaps of tokens. AMMs price transactions with a deterministic liquidity invariance rule that only uses the AMM’s token deposits as inputs and that has no precedent in traditional finance. Yet, in the context of transparent and open blockchain operations, any liquidity invariance pricing function allows so-called sandwich attacks (akin to front running) that increase the cost of trading and threaten the long-term viability of the DeFi ecosystem. Invariance pricing is also not regret free. Linear pricing rules have similar problems except for uniform pricing, which has regret-free prices and limits sandwich attack profits but which invites excessive order splitting. Comparing trading costs using a model of liquidity provision, constant product pricing is often cheaper except when the variance of the underlying asset is small or when the order is large. This paper was accepted by Will Cong, special issue of Management Science: Blockchains and crypto economics. Funding: A. Park received financial support from the Global Risk Institute and the Social Sciences and Humanities Research Council of Canada [Grant 435-2017-0647]. Supplemental Material: The data files are available at https://doi.org/10.1287/mnsc.2021.02802 .
去中心化交易所（DEX）是新生的去中心化金融（DeFi）生态系统的重要组成部分。最常见的去中心化交易所是所谓的自动做市商（AMM）：汇集流动性并以代币原子互换的形式处理交易的智能合约。AMM 采用确定性流动性不变规则为交易定价，该规则仅使用 AMM 的代币存款作为输入，在传统金融领域尚无先例。然而，在透明、开放的区块链操作背景下，任何流动性不变定价功能都会允许所谓的三明治攻击（类似于前置运行），从而增加交易成本，威胁 DeFi 生态系统的长期生存能力。不变性定价也不是无悔的。线性定价规则也有类似的问题，但统一定价除外，因为统一定价具有无悔价格，限制了夹心攻击的利润，但会导致过度拆单。使用流动性提供模型比较交易成本，恒定产品定价通常更便宜，除非标的资产方差较小或订单较大。本文已被《管理科学》特刊 Will Cong 接收：区块链和加密经济学》特刊录用。资助：A. Park 获得了全球风险研究所（Global Risk Institute）和加拿大社会科学与人文研究理事会（Social Sciences and Humanities Research Council of Canada）的资金支持 [Grant 435-2017-0647]。补充材料：数据文件可在 https://doi.org/10.1287/mnsc.2021.02802 上获取。
{"title":"The Conceptual Flaws of Decentralized Automated Market Making","authors":"Andreas Park","doi":"10.1287/mnsc.2021.02802","DOIUrl":"https://doi.org/10.1287/mnsc.2021.02802","url":null,"abstract":"Decentralized exchanges (DEXs) are an essential component of the nascent decentralized finance (DeFi) ecosystem. The most common DEXs are so-called automated market makers (AMMs): smart contracts that pool liquidity and process trades as atomic swaps of tokens. AMMs price transactions with a deterministic liquidity invariance rule that only uses the AMM’s token deposits as inputs and that has no precedent in traditional finance. Yet, in the context of transparent and open blockchain operations, any liquidity invariance pricing function allows so-called sandwich attacks (akin to front running) that increase the cost of trading and threaten the long-term viability of the DeFi ecosystem. Invariance pricing is also not regret free. Linear pricing rules have similar problems except for uniform pricing, which has regret-free prices and limits sandwich attack profits but which invites excessive order splitting. Comparing trading costs using a model of liquidity provision, constant product pricing is often cheaper except when the variance of the underlying asset is small or when the order is large. This paper was accepted by Will Cong, special issue of Management Science: Blockchains and crypto economics. Funding: A. Park received financial support from the Global Risk Institute and the Social Sciences and Humanities Research Council of Canada [Grant 435-2017-0647]. Supplemental Material: The data files are available at https://doi.org/10.1287/mnsc.2021.02802 .","PeriodicalId":18208,"journal":{"name":"Manag. Sci.","volume":"11 1","pages":"6731-6751"},"PeriodicalIF":0.0,"publicationDate":"2023-09-11","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"139341268","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
E. dehaan, T. D. Kok, Dawn Matsumoto, E. Rodriguez-Vazquez
The timely flow of financial information is critical for efficient capital market functioning, yet we have little understanding of firms’ and auditors’ collective abilities to maintain timely financial reporting when under duress. We use COVID as a stress test case to examine whether reporting systems can withstand systemic increases in complex economic events and coordination challenges. Despite COVID-related challenges persisting through 2020 and beyond, we document surprisingly modest average delays in financial reports during COVID and only in Q1-2020. Reporting timeliness reverts to pre-COVID levels no later than Q2-2020. We find no evidence of meaningful declines in actual reporting quality during COVID, but we do find some evidence consistent with declines in perceived reporting quality. Overall, our findings indicate that current financial reporting processes are remarkably robust and provide insights about financial reporting more broadly. In particular, given that nearly all firms were able to weather the unprecedented disruptions caused by COVID, our findings imply that most material reporting delays observed outside of COVID are likely a result of either a firm’s strategic choices or exceptionally fragile reporting processes. This paper was accepted by Ranjani Krishnan, accounting. Supplemental Material: The data and online appendix are available at https://doi.org/10.1287/mnsc.2023.4670 .
{"title":"How Resilient Are Firms' Financial Reporting Processes?","authors":"E. dehaan, T. D. Kok, Dawn Matsumoto, E. Rodriguez-Vazquez","doi":"10.2139/ssrn.4239246","DOIUrl":"https://doi.org/10.2139/ssrn.4239246","url":null,"abstract":"The timely flow of financial information is critical for efficient capital market functioning, yet we have little understanding of firms’ and auditors’ collective abilities to maintain timely financial reporting when under duress. We use COVID as a stress test case to examine whether reporting systems can withstand systemic increases in complex economic events and coordination challenges. Despite COVID-related challenges persisting through 2020 and beyond, we document surprisingly modest average delays in financial reports during COVID and only in Q1-2020. Reporting timeliness reverts to pre-COVID levels no later than Q2-2020. We find no evidence of meaningful declines in actual reporting quality during COVID, but we do find some evidence consistent with declines in perceived reporting quality. Overall, our findings indicate that current financial reporting processes are remarkably robust and provide insights about financial reporting more broadly. In particular, given that nearly all firms were able to weather the unprecedented disruptions caused by COVID, our findings imply that most material reporting delays observed outside of COVID are likely a result of either a firm’s strategic choices or exceptionally fragile reporting processes. This paper was accepted by Ranjani Krishnan, accounting. Supplemental Material: The data and online appendix are available at https://doi.org/10.1287/mnsc.2023.4670 .","PeriodicalId":18208,"journal":{"name":"Manag. Sci.","volume":"59 1","pages":"2536-2545"},"PeriodicalIF":0.0,"publicationDate":"2023-02-07","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"81346007","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"Does Losing Lead to Winning? An Empirical Analysis for Four Sports","authors":"Bouke Klein Teeselink, M. V. Assem, D. Dolder","doi":"10.1287/mnsc.2022.4372","DOIUrl":"https://doi.org/10.1287/mnsc.2022.4372","url":null,"abstract":"","PeriodicalId":18208,"journal":{"name":"Manag. Sci.","volume":"6 1","pages":"513-532"},"PeriodicalIF":0.0,"publicationDate":"2023-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"77006772","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
We propose a new data-driven approach for addressing multi-stage stochastic linear optimization problems with unknown distributions. The approach consists of solving a robust optimization problem that is constructed from sample paths of the underlying stochastic process. As more sample paths are obtained, we prove that the optimal cost of the robust problem converges to that of the underlying stochastic problem. To the best of our knowledge, this is the first data-driven approach for multi-stage stochastic linear optimization which is asymptotically optimal when uncertainty is arbitrarily correlated across time. Finally, we develop approximation algorithms for the proposed approach by extending techniques from the robust optimization literature, and demonstrate their practical value through numerical experiments on stylized data-driven inventory management problems.
{"title":"A Data-Driven Approach to Multistage Stochastic Linear Optimization","authors":"D. Bertsimas, Shimrit Shtern, Bradley Sturt","doi":"10.1287/mnsc.2022.4352","DOIUrl":"https://doi.org/10.1287/mnsc.2022.4352","url":null,"abstract":"We propose a new data-driven approach for addressing multi-stage stochastic linear optimization problems with unknown distributions. The approach consists of solving a robust optimization problem that is constructed from sample paths of the underlying stochastic process. As more sample paths are obtained, we prove that the optimal cost of the robust problem converges to that of the underlying stochastic problem. To the best of our knowledge, this is the first data-driven approach for multi-stage stochastic linear optimization which is asymptotically optimal when uncertainty is arbitrarily correlated across time. Finally, we develop approximation algorithms for the proposed approach by extending techniques from the robust optimization literature, and demonstrate their practical value through numerical experiments on stylized data-driven inventory management problems.","PeriodicalId":18208,"journal":{"name":"Manag. Sci.","volume":"516 1","pages":"51-74"},"PeriodicalIF":0.0,"publicationDate":"2023-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"77123727","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"FinTech Lending and Bank Credit Access for Consumers","authors":"T. Balyuk","doi":"10.1287/mnsc.2022.4319","DOIUrl":"https://doi.org/10.1287/mnsc.2022.4319","url":null,"abstract":"","PeriodicalId":18208,"journal":{"name":"Manag. Sci.","volume":"21 1","pages":"555-575"},"PeriodicalIF":0.0,"publicationDate":"2023-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"74292009","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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