Peng Sun

Journal article Operations Research · May 1, 2026 We study dynamic contracts that incentivize an agent to exert effort to increase the arrival rate of a Poisson breakthrough, where both the effort cost and the effort level at any time are the agent’s private information. Optimally, the principal offers a ... Full text Cite

Audit and Remediation Strategies in the Presence of Evasion Capabilities

Journal article Operations Research · September 1, 2024 In this paper, we explore how to uncover an adverse issue that may occur in organizations with the capability to evade detection. To that end, we formalize the problem of designing efficient auditing and remedial strategies as a dynamic mechanism design mo ... Full text Cite

Punish Underperformance with Suspension: Optimal Dynamic Contracts in the Presence of Switching Cost

Journal article Management Science · January 1, 2024 This paper studies a dynamic principal–agent setting in which the principal needs to dynamically schedule an agent to work or be suspended. When the agent is directed to work and exert effort, the arrival rate of a Poisson process is increased, which incre ... Full text Cite

Efficient Resource Allocation Contracts to Reduce Adverse Events

Journal article Operations Research · September 1, 2023 Motivated by the allocation of online visits to product, service, and content suppliers in the platform economy, we consider a dynamic contract design problem in which a principal constantly determines the allocation of a resource (online visits) to multip ... Full text Cite

Wait Time–Based Pricing for Queues with Customer-Chosen Service Times

Journal article Management Science · April 1, 2023 This paper studies a pricing problem for a single-server queue where customers arrive according to a Poisson process. For each arriving customer, the service provider announces a price rate and system wait time. In response, the customer decides whether to ... Full text Cite

Search Under Accumulated Pressure

Journal article Operations Research · May 1, 2022 Arrow et al. [Arrow K, Blackwell D, Girshick M (1949) Bayes and minimax solutions of sequential decision problems. Econometrica 17(3/4):213-244.] introduced the first sequential search problem "where at each stage the options available are to stop and take ... Full text Cite

Comment on “Optimal Contract to Induce Continued Effort”

Journal article Management Science · January 1, 2022 In this comment, we first use a counterexample to demonstrate that the optimal contract structure proposed in section 4 of the paper [Sun P, Tian F (2018) Optimal contract to induce continued effort. Management Sci. 64(9):4193–4217] can be wrong when the t ... Full text Cite

Optimal contract for machine repair and maintenance

Journal article Operations Research · May 1, 2021 A principal hires an agent to repair a machine when it is down and maintain it when it is up and earns a revenue flowwhen the machine is up. Both the up- and downtimes follow exponential distributions. If the agent exerts effort, the downtime is shortened, ... Full text Cite

Optimal monitoring schedule in dynamic contracts

Journal article Operations Research · September 1, 2020 Consider a setting in which a principal induces effort from an agent to reduce the arrival rate of a Poisson process of adverse events. The effort is costly to the agent and unobservable to the principal unless the principal is monitoring the agent. Monito ... Full text Open Access Cite

Multiagent mechanism design without money

Journal article Operations Research · January 1, 2019 We consider a principal repeatedly allocating a single resource in each period to one of multiple agents, whose values are private, without relying on monetary payments over an infinite horizon with discounting. We design a dynamic mechanism that induces a ... Full text Cite

Optimal contract to induce continued effort

Journal article Management Science · September 1, 2018 We consider a basic model of a risk-neutral principal incentivizing a risk-neutral agent to exert effort to raise the arrival rate of a Poisson process. The effort is costly to the agent, is unobservable to the principal, and affects the instantaneous arri ... Full text Cite

Inducing environmental disclosures: A dynamic mechanism design approach

Journal article Operations Research · March 1, 2016 This paper studies the design of voluntary disclosure regulations for a firm that faces a stochastic environmental hazard. The occurrence of such a hazard is known only to the firm. The regulator, if finding a hazard, collects a fine and mandates the firm ... Full text Cite

Efficient feed-in-tariff policies for renewable energy technologies

Journal article Operations Research · January 1, 2016 Feed-in-tariff (FIT) policies aim at driving down the cost of renewable energy by fostering learning and accelerating the diffusion of green technologies. Under FIT mechanisms, governments purchase green energy at tariffs that are set above market price. T ... Full text Cite

Time-based competition with benchmark effects

Journal article Manufacturing and Service Operations Management · December 1, 2014 We consider a duopoly where firms compete on waiting times in the presence of an industry benchmark. The demand captured by a firm depends on the gap between the firm's offer and the benchmark. We refer to the benchmark effect as the impact of this gap on ... Full text Cite

Analyzing scrip systems

Journal article Operations Research · January 1, 2014 Scrip systems provide a nonmonetary trade economy for exchange of resources. We model a scrip system as a stochastic game and study system design issues on selection rules to match potential trade partners over time. We show the optimality of one particula ... Full text Cite

Diagnostic accuracy under congestion

Journal article Management Science · January 1, 2013 In diagnostic services, agents typically need to weigh the benefit of running an additional test and improving the accuracy of diagnosis against the cost of delaying the provision of services to others. Our paper analyzes how to dynamically manage this acc ... Full text Cite

Optimal structural policies for ambiguity and risk averse inventory and pricing models

Journal article SIAM Journal on Control and Optimization · March 26, 2012 This paper discusses multiperiod stochastic joint inventory and pricing models when the decision maker is risk and ambiguity averse. We study infinite horizon models with discounted and long run average optimization criteria. The main result of this paper ... Full text Cite

Bidder collusion at first-price auctions

Journal article Review of Economic Design · September 1, 2011 We show that in simple environments, a bidding ring operating at a first-price sealed-bid auction cannot achieve any gains relative to non-cooperative bidding if the ring is unable to control the bids that its members submit at the auction. This contrasts ... Full text Cite

Information relaxations and duality in stochastic dynamic programs

Journal article Operations Research · July 1, 2010 We describe a general technique for determining upper bounds on maximal values (or lower bounds on minimal costs) in stochastic dynamic programs. In this approach, we relax the nonanticipativity constraints that require decisions to depend only on the info ... Full text Open Access Cite

Selfish drug allocation for containing an international influenza pandemic at the onset

Journal article Operations Research · November 1, 2009 Recent epidemiologic studies have suggested that the prophylactic use of antiviral drugs could slow down the spread of an influenza epidemic. Because drug stockpiles are presently scattered in different countries, the outbreak of an epidemic gives rise to ... Full text Cite

Decentralized resource allocation to control an epidemic: a game theoretic approach.

Journal article Mathematical biosciences · November 2009 This paper examines how two countries would allocate resources at the onset of an epidemic when they seek to protect their own populations by minimizing the total number of infectives over the entire time horizon. We model this situation as a game between ... Full text Cite

A variance analysis for POMDP policy evaluation

Journal article Proceedings of the National Conference on Artificial Intelligence · December 24, 2008 Partially Observable Markov Decision Processes have been studied widely as a model for decision making under uncertainty, and a number of methods have been developed to find the solutions for such processes. Such studies often involve calculation of the va ... Cite

A linear decision-based approximation approach to stochastic programming

Journal article Operations Research · March 1, 2008 Stochastic optimization, especially multistage models, is well known to be computationally excruciating. Moreover, such models require exact specifications of the probability distributions of the underlying uncertainties, which are often unavailable. In th ... Full text Cite

Linear convergence of a modified Frank-Wolfe algorithm for computing minimum-volume enclosing ellipsoids

Journal article Optimization Methods and Software · February 1, 2008 We show the linear convergence of a simple first-order algorithm for the minimum-volume enclosing ellipsoid problem and its dual, the D-optimal design problem of statistics. Using similar techniques, we show the linear convergence of the Frank-Wolfe algori ... Full text Cite

A robust optimization perspective on stochastic programming

Journal article Operations Research · November 1, 2007 In this paper, we introduce an approach for constructing uncertainty sets for robust optimization using new deviation measures for random variables termed the forward and backward deviations. These deviation measures capture distributional asymmetry and le ... Full text Cite

Risk aversion in inventory management

Journal article Operations Research · September 1, 2007 Traditional inventory models focus on risk-neutral decision makers, i.e., characterizing replenishment strategies that maximize expected total profit, or equivalently, minimize expected total cost over a planning horizon. In this paper, we propose a framew ... Full text Cite

Bias and variance approximation in value function estimates

Journal article Management Science · February 1, 2007 We consider a finite-state, finite-action, infinite-horizon, discounted reward Markov decision process and study the bias and variance in the value function estimates that result from empirical estimates of the model parameters. We provide closed-form appr ... Full text Cite

Dynamic catalog mailing policies

Journal article Management Science · May 1, 2006 Deciding who should receive a mail-order catalog is among the most important decisions that mail-order-catalog firms must address. In practice, the current approach to the problem is invariably myopic: firms send catalogs to customers who they think are mo ... Full text Cite

Bias and variance in value function estimation

Journal article Proceedings Twenty First International Conference on Machine Learning Icml 2004 · December 1, 2004 We consider the bias and variance of value function estimation that are caused by using an empirical model instead of the true model. We analyze these bias and variance for Markov processes from a classical (frequentist) statistical point of view, and in a ... Cite

Computation of minimum-volume covering ellipsoids

Journal article Operations Research · September 1, 2004 We present a practical algorithm for computing the minimum-volume n-dimensional ellipsoid that must contain m given points a I, a m ε R n. This convex constrained problem arises in a variety of applied computational setting ... Full text Cite