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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As AI rewrites the world of work, the demands on leaders are rapidly changing. With change increasing at 183% in the last four years alone and the capabilities for role success shifting 37% every three years, success in the future is likely to be driven by very different factors than those that were important in the past. Yet talent management h…
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