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Academic Journal
Business Law

“Incentive Regulation, New Business Models, and the Transformation of the Electric Power Industry”

The electric utility sector is in the midst of paradigmatic change. Market forces include decreased load growth and technological advances in distributed energy resources, alongside pressures for decarbonization and demands for increased efficiency and new utility services. Meanwhile, as the utility monopoly is undermined and profits slow, financial analysts signal increasing risk to potential utility investors. Suggestions for changes to the existing regulatory structure abound. At the broadest level, the changes that have been proposed reflect an established divide between energy policy, which traditionally focuses on economics and markets, and environmental law, which is based in the protection of natural resources and ecosystems. This article: 1) identifies regulatory and economic incentives embedded in the current utility system; 2) assesses current market trends and new utility goals; and 3) analyzes the intersection of embedded regulatory incentives and key proposals for regulatory changes in light of the new goals. It finds that proposals for changes to the regulatory structure often fail to account for existing regulatory incentives, and ignore opportunities to use regulatory incentives to modify and incentivize desired utility behavior. It concludes with recommendations for ways to incorporate incentive-based regulation in proposals for new utility regulatory structures.
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Inara Scott "Incentive Regulation, New Business Models, and the Transformation of the Electric Power Industry" Michigan Journal of Environmental and Administrative Law Michigan Journal of Environmental and Administrative Law 319-370 pages 2016 View on: Google Scholar

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Academic Journal
Supply Chain

“Incentivizing Supplier Participation in Buyer Innovation: Experimental Evidence of Non-Optimal Contractual Behaviors”

Original equipment manufacturers increasingly involve suppliers in new product development (NPD) projects. How companies design a contract to motivate supplier participation is an important but under-examined empirical question. Analytical studies have started to examine the optimal contract that aligns buyer-supplier incentives in joint NPD projects, but empirical evidence is scarce about the actual contracts offered by buying companies. Bridging the analytical and empirical literature, this paper compares optimal contracting derived from a parsimonious analytical model with actual behaviors observed in an experiment. In particular, we focus on how project uncertainty, buying company effort share, and buyer risk aversion influence three contractual decisions: total investment level, revenue share and fixed fee. Our results indicate significant differences between the optimal and actual behaviors. We identify various types of non-optimal contractual behaviors, which we explain from a risk aversion as well as a bounded rationality perspective. Overall, our findings contribute to the literature by showing that (1) the actual contractual behaviors could differ significantly from the optimal ones, (2) the actual contract design is sensitive to changes in project uncertainty and buying company effort share, and (3) the significant roles of risk aversion and bounded rationality in explaining the non-optimal contractual behaviors.
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Tingting Yan, Dina Ribbink and Hubert Pun "Incentivizing Supplier Participation in Buyer Innovation: Experimental Evidence of Non-Optimal Contractual Behaviors" Journal of Operations Management Elsevier 36-53 pages 2018 View on: Google Scholar

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Academic Journal
Accounting

“Income Shifting and U.S. International Trade in Goods Statistics”

Intrafirm trade represents greater than one-third of total U.S. international trade in goods. Since these are not arm’s-length transactions, trade policymakers have voiced concerns that income shifting may distort international trade in goods statistics through the manipulation of transfer prices. Using country-level data on intrafirm exports and imports, we estimate a path analysis that simultaneously tests how and to what extent tax-motivated transfer pricing and real investment decisions affect intrafirm trade in goods statistics. Contrary to speculation, we do not find an economically significant relation between transfer pricing and intrafirm trade in goods statistics. In contrast, we find that tax-motivated location decisions create a 21 (20) percent or $819.7 ($927.1) million difference in mean intrafirm exports (imports) between the U.S. and a low- and high-tax country. This study provides trade policymakers with relevant information about the extent to which real investment decisions and accounting manipulations affect intrafirm trade in goods statistics and contributes to the international trade and income shifting literatures.
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Zero Deng and Rick Laux "Income Shifting and U.S. International Trade in Goods Statistics" Journal of Accounting and Public Policy Elsevier 2021 View on: Google Scholar

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Academic Journal
Marketing

“Inferences about Others’ Consumption Motives Influence What Consumers Expect from Similar Experiences”

When consumers see someone else’s experience shared on social media, they often infer whether the sharer had relatively intrinsic or extrinsic motives for originally engaging in this experience. While prior research has documented how these inferred motives affect viewers’ social evaluations of the sharer, the present research demonstrates that these inferences can shift viewer beliefs about the experience itself. The findings from six studies show that when viewers infer a sharer originally had either relatively intrinsic or extrinsic motives for consuming an experience they shared about, it increases viewer beliefs that the experience is well suited to satisfy that same type of motive. This shift in the expected motive-based value of the experience, in turn, influences viewers’ behavior during and after their own engagement in a similar experience. However, when viewers are highly familiar with the experience that was shared, the expected motive-based value of the shared experience is not influenced by viewers’ inferences about the sharer’s original motives. Altogether, this research documents a new social influence phenomenon on social media and discusses managerial implications of these findings.
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Matthew Hall "Inferences about Others’ Consumption Motives Influence What Consumers Expect from Similar Experiences" Journal of Consumer Research Journal of Consumer Research 2026

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Academic Journal
Supply Chain

“Informal Cross-Border Trade in Africa: Operations, Policy, and Opportunities”

Informal cross-border trade (ICBT) refers to the illegal activities of cross-border commerce conducted by unregistered small-scale traders. We seek to develop insights to understand the ICBT value chain and offer policy recommendations to successfully integrate it into the formal economy. Using a game-theoretic model, we analyze the operations and key market dynamics of ICBT. We analyze the policy implications of three representative UN directives: enhancing marginalized traders' access to formal channels, reducing export tax rates for formal traders, and introducing an alternative simplified trade regime (STR) for informal traders. All three policies result in an increase in government proceeds when the inherent profitability of the formal or STR channels is sufficiently high. Furthermore, social welfare increases when the policies effectively balance wholesale price competition within the formal and informal channels. We apply our model to a case study based on Uganda's agricultural exports over an 11-year horizon. The access enhancement policy is most effective in increasing government proceeds but least effective in improving the welfare of other participants. The tax reduction policy enhances traders' profitability but sacrifices the welfare of farmers and government proceeds substantially. Finally, the STR acknowledgement policy results in the largest increase in profitability of marginalized traders and farmers but comes at the cost of government proceeds.
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Jimin Park, Michael Lim and Karthik Murali "Informal Cross-Border Trade in Africa: Operations, Policy, and Opportunities" Management Science INFORMS 7142-7160 pages 2024 View on: Google Scholar

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Academic Journal
Accounting

“Information flows among rivals and corporate investment”

Using a novel pairwise measure of firms’ acquisition of rivals’ disclosures, we show that investment opportunities drive interfirm information flows. We find that these flows predict subsequent mergers and acquisitions as well as how and how much firms invest, relative to rivals. Moreover, firms’ use of rivals’ information often hinges on the similarities of their products. Our results suggest that rivals’ public information, far from being unusable, helps facilitate investment and product decisions, including acquisitions and product differentiation strategies. The findings also support a learning mechanism that could partly underlie the emerging literature on peer investment effects.
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Terrence Blackburne, Darren Bernard and Jake Thornock "Information flows among rivals and corporate investment" Journal of Financial Economics Elsevier 760-779 pages 2020 View on: Google Scholar

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