Valuing and Pricing Retail Leases with Renewal and Overage Options

We consider retail leases with landlord overages options, with tenant renewal options, with both and with neither. We illustrate how the ratio of initial expected sales to the sales threshold can be manipulated to equate the value of the landlord overage options to that of the tenant renewal option at the same initial rent. Not only are the values equal, but the cumulative distributions of potential IRRs on the two leases are nearly identical, suggesting that these leases are equally attractive to risk-averse investors and thus that the same risky discount rate can be used in valuing the leases. In contrast, the appropriate risky discount rate for the overage lease is calculated to be 75–160 basis points greater than that for the renewal lease.     

Funded pensions and intergenerational and international risk sharing in general equilibrium

We explore intergenerational and international risk sharing in a general equilibrium multiple-country model with two-tier pensions systems. The exact design of the pension system is key for the way in which risks are shared over generations. The laissez-faire market solution fails to provide an optimal allocation because the young cannot share in the financial risks. However, the existence of wage-indexed bonds combined with a pension system with a fully funded second tier that pays defined wage-indexed benefits can reproduce the first best. If wage-indexed bonds are not available, mimicking the first best is not possible, except under special circumstances. We also explore whether national pension funds want to deviate from the first best by increasing domestic equity holdings. With wage-indexed bonds this incentive is absent, while there is indeed such an incentive when wage-indexed bonds do not exist.     

Real Estate Rental Payments: Application of Stock-Inventory Modeling

This paper analyzes the rental term structure taking into account the opportunity costs faced by the tenant for varying lease lengths. The analysis involves the application of a multi-period stock inventory model. The implication of the model is that the term structure of rents is determined by a clientele effect that can bias the occupancy value derived from using rational-expectations in the term structure relationship. The model does, however, reveal the characteristic stock-inventory U-shaped function that will determine the optimal lease length for a given tenant.     

Social enterprise push or corporate social responsibility pull? The mainstreaming of fair trade

Social enterprise organizations and activities combine market-oriented approaches with social aspirations, whereas corporate social responsibility strategies seek to integrate social aspects into core business strategies. The rise in social enterprise activity at the business end of the spectrum raises questions about how, where, and why social enterprise and corporate social responsibility might overlap. Through a review of literature, we demonstrate how the mainstreaming or corporatization of fair trade activity provides an example of this overlap. The tensions between the push of social aspirations within fair trade and the pull of commercial imperatives are highlighted. From a marketing viewpoint, a social enterprise push strategy is shown as typically undertaken from an organization perspective, whereas pull strategies in marketing are typically customer driven. We demonstrate that influences from both social enterprise and corporate social responsibility are evident in fair trade mainstreaming processes, although the extent to which each “pushes” or “pulls” varies across circumstances and interpretations.     

A GPS data-based analysis of built environment influences on bicyclist route preferences

This study examines the effects of built environment features, including factors of land use and road network, on bicyclists' route preferences using the data from the city of Seattle. The bicycle routes are identified using a GPS dataset collected from a smartphone application named “CycleTracks.” The route choice set is generated using the labeling route approach, and the cost functions of route alternatives are based on principal component analyses. Then, two mixed logit models, focusing on random parameters and alternative-specific coefficients, respectively, are estimated to examine bicyclists' route choice. The major findings of this study are as follows: (1) the bicycle route choice involves the joint consideration of convenience, safety, and leisure; (2) most bicyclists prefer to cycle on shorter, flat, and well-planned bicycle facilities with slow road traffic; (3) some bicyclists prefer routes surrounded by mixed land use; (4) some bicyclists favor routes which are planted with street trees or installed with street lights; and (5) some bicyclists prefer routes along with city features. This analysis provides valuable insights into how well-planned land use and road network can facilitate efficient, safe, and enjoyable bicycling.     

Applications of business analytics in healthcare

The American healthcare system is at a crossroads, and analytics, as an organizational skill, figures to play a pivotal role in its future. As more healthcare systems capture information electronically and begin to collect more novel forms of data, such as human DNA, how will we leverage these resources and use them to improve human health at a manageable cost? In this article, we argue that analytics will play a fundamental role in the transformation of the American healthcare system. However, there are numerous challenges to the application and use of analytics: the lack of data standards, barriers to the collection of high-quality data, and a shortage of qualified personnel to conduct such analyses. There are also multiple managerial issues, such as how to get end users of electronic data to employ it consistently to improve healthcare delivery and how to manage the public reporting and sharing of data. In this article, we explore applications of analytics in healthcare, barriers and facilitators to its widespread adoption, and ways in which analytics can help us achieve the goals of the modern healthcare system: high-quality, responsive, affordable, and efficient care.