2013-02-01, Green, Kesten C, Armstrong, J. Scott, Armstrong, J. Scott

Following Green, Armstrong and Soon’s (IJF 2009) (GAS) naïve extrapolation, Fildes and Kourentzes (IJF 2011) (F&K) found that each of six more-sophisticated, but inexpensive, extrapolation models provided forecasts of global mean temperature for the 20 years to 2007 that were more accurate than the “business as usual” projections provided by the complex and expensive “General Circulation Models” used by the U.N.’s Intergovernmental Panel on Climate Change (IPCC). Their average trend forecast was .007°C per year, and diminishing; less than a quarter of the IPCC’s .030°C projection. F&K extended previous research by combining forecasts from evidence-based short-term forecasting methods. To further extend this work, we suggest researchers: (1) reconsider causal forces; (2) validate with more and longer-term forecasts; (3) adjust validation data for known biases and use alternative data; and (4) damp forecasted trends to compensate for the complexity and uncertainty of the situation. We have made a start in following these suggestions and found that: (1) uncertainty about causal forces is such that they should be avoided in climate forecasting models; (2) long term forecasts should be validated using all available data and much longer series that include representative variations in trend; (3) when tested against temperature data collected by satellite, naïve forecasts are more accurate than F&K’s longer-term (11-20 year) forecasts; and (4) progressive damping improves the accuracy of F&K’s forecasts. In sum, while forecasting a trend may improve the accuracy of forecasts for a few years into the future, improvements rapidly disappear as the forecast horizon lengthens beyond ten years. We conclude that predictions of dangerous manmade global warming and of benefits from climate policies fail to meet the standards of evidence-based forecasting and are not a proper basis for policy decisions.

2011-01-01, Armstrong, J. Scott, Armstrong, J. Scott

2011-06-01, David, Guy, David, Guy, Markowitz, Sara

The extent of pharmaceutical advertising and promotion can be characterized by a balancing act between profitable demand expansions and potentially unfavorable subsequent regulatory actions. However, this balance also depends on the nature of competition (e.g. monopoly versus oligopoly). In this paper we model the firm’s behavior under different competitive scenarios and test the model’s predictions using a novel combination of sales, promotion, advertising, and adverse event reports data. We focus on the market for erectile dysfunction drugs as the basis for estimation. This market is ideal for analysis as it is characterized by an abrupt shift in structure, all drugs are branded, the drugs are associated with adverse health events, and have extensive advertising and promotion. We find that advertising and promotion expenditures increase own market share but also increase the share of adverse drug reactions. Competitors’ spending decreases market share, while also having an influence on adverse drug reactions.

2006-06-01, Cohen, Morris. A, Agrawal, Narendra, Agrawal, Vipul

Many firms have shifted their focus from their products to their customers and the value derived from owning and using the products. They see after-sales service as an important source of revenue and profit, customer acquisition and retention, and competitive differentiation. However, they also find it challenging to manage their service-supply chain. Service organizations must position and manage service-supply-chain resources optimally to support the delivery of after-sales service. They must also develop capabilities to respond rapidly to the demand for service in a cost-effective manner. To succeed in implementing a service-centric strategy, firms must determine what items in their products’ service bill-of-material hierarchy should be deployed throughout their geographical hierarchy of service support locations. They must make these complex and interrelated decisions in anticipation of service demand, which is uncertain. Firms must also be flexible and should understand the mechanisms in a service-supply chain needed to fulfill customers’ demands for service and the resulting demands for support assets and capacities. Dynamic asset deployment (DAD), a collection of management policies that promote this flexibility, can be used to develop the capabilities needed to effectively and profitably deliver services. These policies require a real-options-based optimization approach to decision making.

2010-12-01, Friedman, Ari B

2018-10-02, Horneff, Vanya, Maurer, Raimond, Mitchell, Olivia S, Horneff, Vanya, Maurer, Raimond, Mitchell, Olivia S

Many believe that global capital markets will generate lower returns in the future versus the past. We examine how persistently lower real returns will reshape work, retirement, saving, and investment behavior of older persons using a calibrated dynamic life cycle model. In a low return regime, workers build up less wealth in their tax-qualified 401(k) accounts versus the past, claim social security benefits later, and work more. Moreover, the better-educated are more sensitive to real interest rate changes, and the least-educated alter their behavior less. Interestingly, wealth inequality is lower in periods of persistent low expected returns.

2011-01-01, Barankay, Iwan

There is a growing interest in behavioral incentive schemes exploiting people preference about how they rank compared to others as a non-monetary mechanism to shape effort. In this paper we present evidence from a crowd-sourcing experiment where employees were given feedback about how they rank in terms of performance compared to others doing the same task. The context is such that rank had no implication for current or future compensation. Compared to a control group with no rank feedback, employees who received feedback about their rank were less likely to return to work and also less productive on the job.

2020-01-01, Rao, James, Rao, James, Dr. Olivia Mitchell

This paper seeks to explore how families with special-needs children conduct long-term wealth and retirement planning in two different cultures: the United States and Singapore. While previous papers discuss early childhood education for those with special-needs or housing wealth separately in Singapore, there is a gap in addressing the intersectionality of these issues within such families. The main method of research was secondary, understanding various legislative efforts via online resources; when opportunities were possible, primary research was conducted in the form of interviews (some off-the-record) with various stakeholders. Overall, this paper finds that the government in the United States plays a larger role in providing financial flexibility to these families than in Singapore, where long-term solutions are funded privately until no longer feasible.

2018-08-01, Agnew, Julie, Bateman, Hazel, Eckert, Christine, Iskhakov, Fedor, Louviere, Jordan, Thorp, Susan

We quantify the widespread and significant economic impact of first impressions and confirmation bias in the financial advice market. We use a theoretical learning model and new experimental data to measure how these biases can evolve over time and change clients’ willingness to pay advisers. Our model demonstrates that clients’ confirmation bias will reinforce the effect of first impressions. Our results also lend support, in a new financial context, to theoretical models of learning under limited memory where people use unclear signals to confirm and reinforce their current beliefs. We find that almost two thirds of the participants in our experiment make choices that are consistent with a limited memory updating process: they interpret unclear advice to be good advice when it comes from the adviser they prefer. Our results show that models that account for behavioral factorssuch as confirmation bias may be needed to explain some financial decisions.

2019-01-31, Kable, Joseph W, Lempert, Karolina, Wolk, David

While most people discount future rewards and consequences to at least some extent, the degree of temporal discounting varies widely from person to person. These individual differences, in turn, are associated with a host of risky behaviors, such as smoking, overeating, gambling, borrowing excessively on credit cards and texting while driving. This study looks at the cognitive and neural mechanisms underlying temporal discounting, so more targeted interventions can be developed to minimize its harmful effects.