Woonam Hwang

Firms can enhance the reliability of their supply through process improvement and overproduction. In decentralized supply chains, however, these mitigating actions may be the supplier's responsibility yet are often not contractible. We show that wholesale price contracts, despite their simplicity, can perform well in inducing reliable supply, and we identify when and why they perform well. This could explain the widespread use of wholesale price contracts in business settings with unreliable sup

Consumers possess a mental account that stores the worth of items purchased and yet to be consumed. Reference prices act as the book values of these items. Movements in the account—the comparison between the reference price and the price paid at entry, and the comparison between the benefit of consumption and the reference price at exit—yield hedonic benefits. The reference price is determined by a psychological process of adaptation to the price evoked by the trade. The model is integrative in

Automakers, including Toyota and General Motors, were recently caught by the U.S. regulator for deliberately hiding product defects in an attempt to avoid massive recalls. Interestingly, regulators in the United States and United Kingdom employ different policies in informing consumers about potential defects: the U.S. regulator publicly announces all ongoing investigations of potential defects to provide consumers with early information, whereas the UK regulator does not. To understand how thes

Project leaders are responsible for planning, controlling, and revising projects. As a project unfolds, the leader evaluates the project’s progress by comparing ongoing costs and scope to a baseline plan and considers potential revisions. We offer a general model of managerial mental accounting, which includes loss aversion, reference point updating, and narrow framing, and examine how it impacts downstream decisions. Our model predicts insufficient adjustments of project scope and cost at revis

Automakers such as Toyota and GM were recently caught by the U.S. regulator for deliberately hiding product defects in an attempt to avoid massive recalls. Interestingly, regulators in the U.S. and U.K. employ different policies in informing consumers about potential defects: The U.S. regulator publicly announces all on-going investigations of potential defects to provide consumers with early information, whereas the U.K. regulator does not. To understand how these different announcement policie

Problem definition: Following recent legislation, private insurers participating in Medicare Advantage (MA) are allowed to expand their set of supplementary services to include benefits that are not primarily health related. This policy is meant to lead to lower costs and better care, but questions have been raised about how this affects the incentives of private insurers. We investigate the implications of the policy for MA offerings, beneficiary enrollment, and social welfare. Methodology/resu

This paper proposes a maintenance strategy for a satellite constellation that utilizes on-orbit servicing (OOS). Under this strategy, the constellation operator addresses satellite failures in two ways: by deploying new satellites and by recovering failed satellites through OOS. We develop an inventory management model with a parametric replenishment policy for the maintenance process, which can evaluate the performance of the satellite constellation system. Based on this model, we formulate the

We propose a positive theory of consumer choice, one that evaluates the hedonic benets of various consumption and payment streams. In any given period, mental accounting nds consumers engage in a double comparison: one between the benet of consumption and a reference price, and another between the reference price and the actual price. The reference price is inuenced by the payment stream and adapts over time. Under standard assumptions, mainly loss aversion and adaptation, our model predicts var

This paper proposes an on-orbit servicing (OOS)-integrated maintenance strategy for a satellite constellation. In this strategy, the operator sources spare satellites both by launching newly manufactured units from the ground and by recovering failed satellites through OOS. We develop a supply-chain and inventory-management model with a parametric replenishment policy to assess the performance and cost-effectiveness of the maintenance strategy.