This paper considers a call center outsourcing contract analysis and choice problem, faced by a contractor and a service provider. The service provider receives an uncertain call volume over multiple-periods, and is considering outsourcing all or part of these calls to a contractor. Each call brings in a fixed revenue to the service provider. Answering calls requires having service capacity, th...

This paper explores interrelations between pricing, capacity choice, and financing in transportation networks. We build on the Mohring-Harwitz result on self-financing of optimally designed and priced roads and investigate it in a network environment under various types of second-best regulation. A small network model with endogenous car ownership demonstrates that optimal congestion pricing an...

In 'good genes' models of sexual selection, females choose mates whose genes confer increased survival value to offspring. One possible index of male quality is aerobic capacity (the metabolic basis of sustainable exercise), which is likely to be important for fitness. If it is both heritable and ecologically valuable, high aerobic capacity would be a direct signal of male genetic quality. If a...

We consider a simple supply chain in which a single supplier sells to several downstream retailers. The supplier has limited capacity, and retailers are privately informed of their optimal stocking levels. If retailer orders exceed available capacity, the supplier allocates capacity using a publicly known allocation mechanism, a mapping from retailer orders to capacity assignments. We show that...

This paper studies the impact of competition on a firm’s choice of technology (product-flexible or product-dedicated) and capacity investment decisions. Specifically, we model two firms competing with each other in two markets characterized by price-dependent and uncertain demand. The firms make three decisions in the following sequence: choice of technology (technology game), capacity investme...

This paper presents a method for assessing small hydropower projects that are subject to uncertain electricity prices. We present a real options-based method with continuous scaling, and we find that there is a unique price limit for initiating the project. If the current electricity price is below this limit it is never optimal to invest, but above this limit investment is made according to th...

This paper considers a call center outsourcing contract design and choice problem, faced by an outsourcing vendor and a service provider. The service provider receives an uncertain call volume over multiple-periods, and is considering outsourcing all or part of these calls to an outsourcing vendor. Each call brings in a fixed revenue to the service provider. Answering calls requires having serv...

We consider a manufacturer’s new market entry problem when it already has some established facility in its existing market. We consider two common market entry strategies: the export strategy and the foreign direct investment (FDI) strategy. In the export strategy the firm increases the capacity at its existing facility and subsequently allocates the output to the existing and the new market dy...