IMD business school for management and leadership courses
We show that a one-sided price-adjustment rule, with free price cuts but a fixed daily reset for price increases, raises the reset price even under risk neutrality, mean-zero wholesale cost shocks, and perfect consumer information. The mechanism is option-theoretic: a higher reset price preserves pass-through in adverse cost states, while favora…
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The “tragedy of the horizon” captures the gap between long-horizon climate damages and the shorter horizons of corporate decision-making. We provide a contracting account of this idea using a deliberately standard CARA-normal moral-hazard model. Under full commitment, the optimal linear contract can condition on long-horizon outcomes; horizon mi…
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We have been sold a seductive myth: that the more hours we work, the more productive we become. Stay online longer. Reply faster. Be available at all times. Push harder. Sleep later. Wear exhaustion like a badge of honour. In many industries, this has become the modern script for success. Yet across much of the developed world, the opposite has …
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Sometime last fall, in a cafe near the Bund in Shanghai, a woman picked up her phone. She did not open an app, nor did she scroll, read the reviews, compare restaurants, or check the delivery time. Instead, she spoke the following nine words: “Order my usual lunch; deliver it 20 minutes later.” The phone paused for about three seconds. An agent …
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