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Winning Isn’T Everything: Corruption In Sumo Wrestling, Mark Duggan, Steven D. Levitt Dec 2002

Winning Isn’T Everything: Corruption In Sumo Wrestling, Mark Duggan, Steven D. Levitt

Health Care Management Papers

Although theory on corruption is well developed, it has proven difficult to isolate corrupt behavior empirically. In this paper, we provide overwhelming statistical evidence documenting match rigging in Japanese sumo wrestling. A non-linearity in the incentive structure of promotion leads to gains from trade between wrestlers on the margin for achieving a winning record and their opponents. We show that wrestlers win a disproportionate share of the matches when they are on the margin. Collusion, rather than increased effort, appears to explain the results. Wrestlers who are victorious when needing a victory lose more often than would be expected the ...


Competition And Outsourcing With Scale Economies, Gerard. P. Cachon, Patrick T. Harker Oct 2002

Competition And Outsourcing With Scale Economies, Gerard. P. Cachon, Patrick T. Harker

Operations, Information and Decisions Papers

Scale economies are commonplace in operations, yet because of analytical challenges, relatively little is known about how firms should compete in their presence. This paper presents a model of competition between two firms that face scale economies; (i.e., each firm's cost per unit of demand is decreasing in demand). A general framework is used, which incorporates competition between two service providers with price- and time-sensitive demand (a queuing game), and competition between two retailers with fixed-ordering costs and pricesensitive consumers (an Economic Order Quantity game). Reasonably general conditions are provided under which there exists at most one equilibrium ...


Price Dispersion And Differentiation In Online Travel: An Empirical Investigation, Eric. K. Clemons, Ll-Horn Hann, Lorin. M. Hitt Apr 2002

Price Dispersion And Differentiation In Online Travel: An Empirical Investigation, Eric. K. Clemons, Ll-Horn Hann, Lorin. M. Hitt

Operations, Information and Decisions Papers

Previous research has examined whether price dispersion exists in theoretically highly efficient Internet markets. However, much of the previous work has been focused on industries with low cost and undifferentiated products. In this paper, we examine the presence of price dispersion and product differentiation using data on the airline ticket offerings of online travel agents (OTAs). We find that different OTAs offer tickets with substantially different prices and characteristics when given the same customer request. Some of this variation appears to be due to product differentiation—different OTAs specialize by systematically offering different trade-offs between ticket price and ticket quality ...


Flexible Service Capacity: Optimal Investment And The Impact Of Demand Correlation, Serguei Netessine, Gregory Dobson, Robert A. Shumsky Mar 2002

Flexible Service Capacity: Optimal Investment And The Impact Of Demand Correlation, Serguei Netessine, Gregory Dobson, Robert A. Shumsky

Operations, Information and Decisions Papers

We consider a firm that provides multiple services using both specialized and flexible capacity. The problem is formulated as a two-stage, single-period stochastic program. The firm invests in capacity before the actual demand is known and optimally assigns capacity to customers when demand is realized. Sample applications include a car rental company's use of mid-sized cars to satisfy unexpectedly high demand for compact cars and an airline's use of business-class seats to satisfy economy-class demand. We obtain an analytical solution for a particular case, when services may be upgraded by one class. The simple form of the solution ...