Dennis A. Yao

Lawrence E. Fouraker Professor of Business Administration

Dennis Yao is Lawrence E. Fouraker Professor of Business Administration and member of the Strategy Unit at Harvard Business School. He joined the faculty in 2004 after having been at the Wharton School, University of Pennsylvania. From 1991-1994 he served as Commissioner, U.S. Federal Trade Commission where he and his four colleagues had decision responsibility for antitrust and consumer protection matters in both prosecutorial and judicial roles. Professor Yao has a BSE in civil engineering from Princeton, an MBA from the University of California, Berkeley, and a PhD from the Graduate School of Business (economics group) at Stanford. Before beginning his doctoral studies he was a car product planner at Ford Motor Company. He also has served on the National Advertising Review Board.

Professor Yao's research involves the application of microeconomics and game theory to incentive and information problems affecting firms. His recent work has focused on understanding contracting and knowledge flow issues in markets for ideas and inventions. Earlier he worked on problems involving procurement and on technology-forcing regulation. Professor Yao has also written extensively in the areas of antitrust policy and non-market strategies. His work has been published in top economics, strategy, political science, and public policy journals. Professor Yao has also held a number of editorial positions with strategy, economics, and public policy journals.

Journal Articles

  1. Antitrust—What Role for Strategic Management Expertise?

    Keywords: Strategy; Management; Experience and Expertise; Law;

    Citation:

    Oberholzer-Gee, Felix, and Dennis A. Yao. "Antitrust—What Role for Strategic Management Expertise?" Boston University Law Review 90, no. 4 (August 2010): 1457–1478.
  2. Attracting Skeptical Buyers: Negotiating for Intellectual Property Rights

    Expropriable disclosures of knowledge to prospective buyers may be necessary to facilitate the sale of intellectual property (IP). In principle, confidentiality agreements can protect disclosures by granting the seller rights to sue for unauthorized use. In practice, sellers often waive confidentiality rights. We provide an incomplete information explanation for the waiver of confidentiality rights that are valuable in complete information settings. Waiving sacrifices the protective value of confidentiality to gain greater buyer participation. Buyer skepticism, which reduces participation, arises endogenously from three elements: asymmetric information regarding seller IP, rent dissipation from competition for IP, and ex post costs from expropriation lawsuits.

    Keywords: Corporate Disclosure; Intellectual Property; Knowledge Sharing; Lawsuits and Litigation; Rights; Agreements and Arrangements; Competition;

    Citation:

    Anton, James J., and Dennis A. Yao. "Attracting Skeptical Buyers: Negotiating for Intellectual Property Rights." International Economic Review 49, no. 1 (February 2008): 319–348. (Harvard users click here for full text.)
  3. Finding Lost Profits: An Equilibrium Analysis of Patent Infringement Damages

    We discuss how a seller can appropriate rents when selling knowledge that lacks legal property rights by solving either an expropriation or a valuation problem and then analyze how seller rents increase when a portion of the intellectual property (IP) can be protected. The analysis shows that a sequential strategy in which the protected portion of the IP is sold prior to selling the unprotected IP is superior to selling both portions of the IP as a bundle.

    Keywords: Profit; Patents; Management Analysis, Tools, and Techniques; Knowledge; Rights; Strategy; Valuation; Problems and Challenges;

    Citation:

    Anton, James J., and Dennis A. Yao. "Finding Lost Profits: An Equilibrium Analysis of Patent Infringement Damages." Journal of Law, Economics & Organization 23, no. 1 (spring 2007): 186–207. (Harvard users click here for full text.)
  4. Strategy Frameworks and Teaching Antitrust to Business Students

    Keywords: Strategy; Framework; Teaching; Business Education;

    Citation:

    Oberholzer-Gee, Felix, and Dennis Yao. "Strategy Frameworks and Teaching Antitrust to Business Students." Antitrust (American Bar Association) 21, no. 1 (fall 2006): 13–15. (Harvard users click here for full text.)
  5. Policy Implications of Weak Patent Rights

    Patents vary substantially in the degree of protection provided against unauthorized imitation. In this chapter we explore a range of work addressing the economic and policy implications of "weak" patents—patents that have a significant probability of being overturned or being circumvented relatively easily—on innovation and disclosure incentives, antitrust policy, and organizational incentives and entrepreneurial activity. Weak patents cause firms to rely more heavily on secrecy. Thus, the competitive environment is characterized by private information about the extent of the innovator's know-how. In such an environment weak patents increase the likelihood of imitation and infringement, reduce the amount of knowledge publicly disclosed, and potentially reduce the incentives to innovate. The discussion also highlights some implications of weak patents for antitrust policy. Weak patent rights increase the likelihood of patent litigation over commercially valuable patents and raise the specter of anticompetitive settlements. Encouraging the antitrust agencies to refer some patents for re-examination by the patent office would facilitate investigation of potentially anticompetitive IP settlements. Finally, we note some implications for weak property rights in settings involving employee-inventors and employee misuse of confidential information. In the former case an increase in the strength of legal property rights such as patents reduces the employer's ability to prevent employees departing with valuable know-how, in part because a stronger property right increases the value of the employee's start-up option. In the latter case, an increase in legal penalties for breach of confidentiality has the expected effect of decreasing such occurrences.

    Keywords: Patents; Motivation and Incentives; Entrepreneurship; Competition; Policy; Innovation and Invention; Rights; Monopoly; Business Startups;

    Citation:

    Anton, James J., Hillary Greene, and Dennis Yao. "Policy Implications of Weak Patent Rights." Innovation Policy and the Economy 6, no. 1 (2006): 1–26. (Harvard users click here for full text.)
  6. Markets for Partially-Contractible Knowledge: Bootstrapping Versus Bundling

    We discuss how a seller can appropriate rents when selling knowledge that lacks legal property rights by solving either an expropriation or a valuation problem and then analyze how seller rents increase when a portion of the intellectual property (IP) can be protected. The analysis shows that a sequential strategy in which the protected portion of the IP is sold prior to selling the unprotected IP is superior to selling both portions of the IP as a bundle.

    Keywords: Knowledge; Markets; Rights; Valuation; Problems and Challenges; Management Analysis, Tools, and Techniques; Intellectual Property; Strategy;

    Citation:

    Anton, James J., and Dennis A. Yao. "Markets for Partially-Contractible Knowledge: Bootstrapping Versus Bundling." Journal of the European Economic Association 3, nos. 2-3 (April–May 2005): 745–754. (Harvard users click here for full text.)
  7. Little Patents and Big Secrets: Managing Intellectual Property

    Exploitation of an innovation commonly requires some disclosure of enabling knowledge (e.g., to obtain a patent or induce complementary investment). When property rights offer only limited protection, the value of the disclosure is offset by the increased threat of imitation. Our model incorporates three features critical to this setting: innovation creates asymmetric information, innovation often has only limited legal protection, and disclosure facilitates imitation. Imitation depends on inferences the imitator makes about the innovator's advance. We find an equilibrium in which small inventions are not imitated, medium inventions involve a form of "implicit licensing," and large inventions are protected primarily through secrecy when property rights are weak.

    Keywords: Patents; Management; Innovation and Invention; Knowledge; Rights; Value; Information; Corporate Disclosure;

    Citation:

    Anton, James J., and Dennis A. Yao. "Little Patents and Big Secrets: Managing Intellectual Property." RAND Journal of Economics (spring 2004): 1–22. (Harvard users click here for full text.)
  8. Patents, Invalidity, and the Strategic Transmission of Enabling Information

    The patent system encourages innovation and knowledge disclosure by providing exclusivity to inventors. Exclusivity is limited, however, because a substantial fraction of patents have some probability of being ruled invalid when challenged in court. The possibility of invalidity--and an ensuing market competition--suggests that when an innovator's capability (e.g., cost of production) is private information, there is potential value to an innovator from signaling strong capability via a disclosure that transfers technical knowledge to a competitor. We model a product-innovation setting in which a valid patent gives market exclusivity and find a unique signaling equilibrium. One might expect that as the probability that a patent will be invalid becomes low, greater disclosure will be induced. We do not find this expectation to be generally supported. Further, even where full disclosure arises in equilibrium, it is only the less capable who make full disclosures. The equilibrium analysis also highlights many of the novel and appealing features of enabling knowledge disclosure signals.

    Keywords: System; Innovation and Invention; Knowledge Dissemination; Courts and Trials; Competition; Patents; Corporate Disclosure;

    Citation:

    Anton, James J., and Dennis A. Yao. "Patents, Invalidity, and the Strategic Transmission of Enabling Information." Journal of Economics & Management Strategy 12, no. 2 (summer 2003): 151–178. (Harvard users click here for full text.)
  9. The Sale of Ideas: Strategic Disclosure, Property Rights, and Contracting

    Ideas are difficult to sell when buyers cannot assess an idea's value before it is revealed and sellers cannot protect a revealed idea. These problems exist in a variety of intellectual property sales ranging from pure ideas to poorly protected inventions and reflect the nonverifiability of key elements of an intellectual property sale. An expropriable partial disclosure can be used as a signal, allowing the seller to obtain payment based on the value of the remaining (undisclosed) know-how. We examine contracting after the disclosure and find that seller wealth is pivotal in supporting a partial disclosure equilibrium and in determining the payoff size.

    Keywords: Intellectual Property; Contracts; Strategy; Valuation;

    Citation:

    Anton, James J., and Dennis A. Yao. "The Sale of Ideas: Strategic Disclosure, Property Rights, and Contracting." Review of Economic Studies 69, no. 3 (July 2002): 513–531. (Harvard users click here for full text.)
  10. Practices for Managing Information Flows Within Organizations

    Firm organization determines how coworkers communicate and how information flows within the firm. Banking, accounting, consulting, and legal firms process proprietary information which their clients wish to protect. The firm's ability to safeguard and manage information determines its market demand. Yet employees may leak and otherwise abuse information to enhance their personal performance and wealth. This article analyzes how bureaucracies are erected within the firm to control information flows and protect clients.

    Keywords: Information Management; Management Practices and Processes; Safety; Governance Controls; Customer Focus and Relationships;

    Citation:

    Demski, Joel, Tracy Lewis, Dennis Yao, and Huseyin Yildirim. "Practices for Managing Information Flows Within Organizations." Journal of Law, Economics & Organization 15, no. 1 (March 1999): 107–131. (Harvard users click here for full text.)
  11. Standard Setting Consortia, Antitrust, and High-Technology Industries

    Examines the antitrust treatment of private-sector standard setting in the U.S. Applicability of law and decision-making issues in high technology industries; Examination of cost-based facilitating theory; Approach to evaluate the reasonableness of a standard.

    Keywords: Private Sector; Technology; Law; Decision Making; Cost; Theory; Performance Evaluation; Standards; United States;

    Citation:

    Anton, James J., and Dennis A. Yao. "Standard Setting Consortia, Antitrust, and High-Technology Industries." Antitrust Law Journal 64, no. 1 (fall 1995): 247–265. (Harvard users click here for full text.)
  12. Start-ups, Spin-offs, and Internal Projects

    We examine the incentive problem confronting a firm and employee when the employee privately discovers a significant invention and faces a choice between keeping the invention private and leaving the firm to form a new company (start-up), or transferring knowledge and attempting to gain compensation from the firm (spin-off). We focus on inventions that require little start-up capital and for which property rights are either missing or very weak. In such settings, the employee will sometimes form a new company even though joint profits would have been greater had the invention been developed with the original firm. We also identify when the firm has an incentive to pay a substantial sum to the employee via a spin-off, thereby deterring a start-up. Finally, the basic analysis is applied to examine several issues including specific versus general innovations, trade secret law, and legal "shop rights."

    Keywords: Business Startups; Projects; Motivation and Incentives; Rights; Employees; Innovation and Invention; Compensation and Benefits; Knowledge Sharing; Capital; Profit;

    Citation:

    Anton, James J., and Dennis Yao. "Start-ups, Spin-offs, and Internal Projects." Journal of Law, Economics & Organization 11, no. 2 (October 1995): 362–378. (Harvard users click here for full text.)
  13. Some Reflections on the Antitrust Treatment of Intellectual Property

    Abridged version in The Financial Times, 'The Complete MBA Companion,' 1997, pp. 577-582.

    Keywords: Intellectual Property; Law Enforcement;

    Citation:

    Lewis, Tracy R., and Dennis A. Yao. "Some Reflections on the Antitrust Treatment of Intellectual Property." Antitrust Law Journal 63, no. 2 (winter 1995): 603–619. (Harvard users click here for full text.)
  14. Expropriation and Inventions: Appropriable Rents in the Absence of Property Rights

    We analyze the problem faced by a financially weak independent inventor when selling a valuable, but easily imitated, invention for which no property rights exist. The inventor can protect his or her intellectual property by negotiating a contingent contract (with a buyer) prior to revealing the invention or, alternatively, the inventor can reveal the invention and then negotiate with the newly informed buyer. Despite the risk of expropriation, we find that, in equilibrium, an inventor with little wealth can expect to appropriate a sizable share of the market value of the invention by adopting the latter approach.

    Keywords: Innovation and Invention; Intellectual Property; Rights; Sales; Contracts; Negotiation;

    Citation:

    Anton, J., and Dennis Yao. "Expropriation and Inventions: Appropriable Rents in the Absence of Property Rights." American Economic Review 84, no. 1 (March 1994): 190–209. (Harvard users click here for full text.)
  15. Coordination in Split-Award Auctions

    We analyze split award procurement auctions in which a buyer divides full production between two suppliers or awards all production to a single supplier, and suppliers have private cost information. An intriguing feature of split awards is that the equilibrium bids are implicitly coordinated. Because a split award price is the sum of offered split prices, each supplier can unilaterally veto a split award by bidding very high for the split. The need to coordinate is reflected in a split price that does not vary with private information. We also explore conditions under which split award auctions may be preferred to winner-take-all auctions.

    Keywords: Supply Chain Management; Balance and Stability; Cost; Auctions; Bids and Bidding; Production; Five Forces Framework; Supply and Industry; Situation or Environment; Information; Manufacturing Industry;

    Citation:

    Anton, James J., and Dennis Yao. "Coordination in Split-Award Auctions." Quarterly Journal of Economics 107, no. 2 (May 1992): 681–707. (Reprinted in P. Klemperer, ed., The Economic Theory of Auctions, Elgar, 2000.) Harvard users click here for full text.)
  16. Presidential Commitment and the Veto

    A president's power to veto is widely recognized as an important weapon in the struggle with Congress over legislation. In this paper we investigate the effectiveness of the veto weapon with a simple model of presidential powers that incorporates informal institutional structure--the president's unique position as the focus of public attention--into an otherwise standard agenda-control model of the formal institutional structure governing the legislative process. We show that the president can exploit this public attention to make commitments regarding his veto intentions that, given the formal institutional structure, will enhance the value of the veto. One implication of the model is that commitment over "principles" (e.g., no taxes) will sometimes be more effective than commitment over "degree" (e.g., 3.2% tax rate). In addition, a president can sometimes improve his utility by making commitments that ultimately lead to a veto that is overridden.

    Keywords: Government Legislation; Laws and Statutes; Financial Markets; Value; Taxation; Conflict and Resolution; Research; Performance Effectiveness; Legal Services Industry;

    Citation:

    Ingberman, Daniel E., and Dennis Yao. "Presidential Commitment and the Veto." American Journal of Political Science 35, no. 2 (May 1991): 357–389. (Harvard users click here for full text.)
  17. Measuring the Effectiveness of Competition in Defense Procurement: A Survey of the Empirical Literature

    This article surveys the literature that has attempted to measure competition's effects on defense procurement. The focus is on conceptual underpinnings of models rather than technical aspects of estimation procedures. While providing valuable insight, the models are flawed because they assume an implicit model of the procurement environment that is inconsistent with reasonable economic evidence. The predictive power of empirical models is limited by a program-by-program estimation approach in which only a few data points are available to estimate multiple parameters. Improvements would result by using structural models that assume reasonable economic behavior and provide theoretical bases for cross-program analyses.

    Keywords: Performance Effectiveness; Competition; Surveys; Value; Economics; Forecasting and Prediction; Programs; Power and Influence; Management Analysis, Tools, and Techniques;

    Citation:

    Anton, James J., and Dennis A. Yao. "Measuring the Effectiveness of Competition in Defense Procurement: A Survey of the Empirical Literature." Journal of Policy Analysis and Management 9 (winter 1990): 60–79. (Harvard users click here for full text.)
  18. Fly-by-Night Firms and the Market for Product Reviews

    This paper presents a model that permits third-party information provision in a market characterized by information asymmetries and reputation formation. The model is used to examine how the market for information provision affects prices and supply in the primary market. We find that decreasing the cost of providing and using information (i) increases rather than decreases the margins received by reputable service firms, (ii) decreases the price of new, untested service firms (so reputation is more costly to build), and (iii) leads to more high-quality firms and less "fly-by-night" firms.

    Keywords: Markets; Reputation; SWOT Analysis; Mathematical Methods; Price Bubble; Inflation and Deflation; Duopoly and Oligopoly; Cost; Information; Quality; Price; Competitive Advantage; Information Industry;

    Citation:

    Faulhaber, Gerald R., and Dennis A. Yao. "Fly-by-Night Firms and the Market for Product Reviews." Journal of Industrial Economics 38 (September 1989): 65–77. (Harvard users click here for full text.)
  19. Split-Awards Procurement and Innovation

    In many procurement settings, it is possible for a buyer to split a production award between suppliers. In this article, we develop a model of split-award procurement auctions in which the split choice is endogenous. We characterize the set of equilibrium bids and allocations for optimizing agents in an environment in which suppliers are fully informed about each other's costs. Split-award equilibria simultaneously exhibit strong collusive features and cost-efficiency properties. Despite the former property of the equilibria, upstream investment considerations may lead a buyer to prefer a split-award auction format to a winner-take-all auction format.

    Keywords: Innovation and Invention; Auctions; Bids and Bidding; Cost; Supply Chain; Investment; Balance and Stability;

    Citation:

    Anton, James J., and Dennis A. Yao. "Split-Awards Procurement and Innovation." RAND Journal of Economics 20, no. 4 (winter 1989): 538–552. (Harvard users click here for full text.)
  20. Strategic Responses to Automobile Emissions Control: A Game-Theoretic Analysis

    This paper examines the dynamics of standard-setting regulation under technological uncertainty and asymmetric information about technological capability. A two-period model which allows fully strategic action is developed and applied to the regulation of automobile emissions, a situation in which standards have been used to "force" innovation. It is found that the initial level of R&D activity caused by regulation increases with the intrinsic technical capability of industry. This result does not depend on marginal productivities of research that favor high-capability types and implies that a poor-capability industry will not attempt to compensate for its inability to innovate with increased research activity. It is also found that the regulator's ability to induce investment is greater when R&D is likely to be unsuccessful.

    Keywords: Transportation; Pollution and Pollutants; Standards; Governance Controls; Technological Innovation; Research and Development; Mathematical Methods;

    Citation:

    Yao, Dennis. "Strategic Responses to Automobile Emissions Control: A Game-Theoretic Analysis." Journal of Environmental Economics and Management 15 (December 1988): 419–438. (Harvard users click here for full text.)
  21. Beyond the Reach of the Invisible Hand: Impediments to Economic Activity, Market Failures, and Profitability

    In this paper it is argued that failures of the competitive market are necessary conditions for supranormal profitability. Three fundamental causes of these market failures-production economies and sunk costs, transactions costs, and imperfect information-are developed from the theory of competitive markets and discussed in terms of their impact on profitability. The identification of these 'impediments to economic activity' is useful for determining successful strategies to exploit market failures.

    Keywords: Economics; Markets; Failure; Profit; Cost; Information; Market Transactions; Competition; Strategy; Production;

    Citation:

    Yao, Dennis. "Beyond the Reach of the Invisible Hand: Impediments to Economic Activity, Market Failures, and Profitability." Strategic Management Journal 9 (Summer 1988): 59–70. (Harvard users click here for full text.)
  22. Second-Sourcing and the Experience Curve: Price Competition in Defense Procurement

    We examine a dynamic model of price competition in defense procurement that incorporates the experience curve, asymmetric cost information, and the availability of a higher cost alternative system. We model acquisition as a two-stage process in which initial production is governed by a contract between the government and the developer. Competition is then introduced by an auction in which a second source bids against the developer for remaining production. We characterize the class of production contracts that are cost minimizing for the government and that induce the developer to reveal private cost information. When high costs are revealed, these contracts result in a credible cutoff of new system production in favor of the still higher cost alternative system.

    Keywords: Acquisition; Government and Politics; Price; Competition; Mathematical Methods;

    Citation:

    Anton, James J., and Dennis A. Yao. "Second-Sourcing and the Experience Curve: Price Competition in Defense Procurement." RAND Journal of Economics 18, no. 1 (spring 1987): 57–76. (Harvard users click here for full text.)
  23. The Nonpecuniary Costs of Automobile Emissions Standards

    An important component of the costs of automotive air-pollution control has been nonpecuniary: a decline in vehicle performance characteristics. This regulatory impact on what the auto industry calls "drivability" has never been quantified, although there is considerable reason to believe that it has been a major component of the costs of some of the auto emissions standards of the last decade. We develop a methodology for econometric assessment of such costs, and apply it to the automobile air pollution standards of 1972-1981. We find that these costs are important. For the first standards implemented in the 1970s, they exceeded the costs of pollution control equipment installed on the car and the costs of decreased fuel efficiency. Since then, however, advances in compliance technology have allowed increases in automobile quality so that incremental costs of recent standards are much lower than previously believed.

    Keywords: Transportation; Pollution and Pollutants; Cost; Standards; Performance; Quality; Auto Industry;

    Citation:

    Bresnahan, Timothy F., and Dennis Yao. "The Nonpecuniary Costs of Automobile Emissions Standards." RAND Journal of Economics 16, no. 4 (winter 1985): 437–455. ((reprinted in W. Harrington and V. McConnell (eds.) Controlling Automobile Air Pollution, 2007) Harvard users click here for full text.)

Book Chapters

  1. Policy Implications of Weak Property Rights

    Keywords: Property; Rights; Policy; Government and Politics;

    Citation:

    Anton, James, Hillary Greene, and Dennis Yao. "Policy Implications of Weak Property Rights." In Innovation Policy and the Economy, Volume 6, edited by Adam B. Jaffe, Josh Lerner, and Scott Stern, 1–26. MIT Press, 2006.
  2. Market Imperfections and Sustainable Competitive Advantage

    Citation:

    Oberholzer-Gee, Felix, and Dennis Yao. "Market Imperfections and Sustainable Competitive Advantage." Chap. 12 in Oxford Handbook of Managerial Economics, edited by Christopher Thomas and William Shughart II, 262–277. Oxford University Press, 2013.
  3. Non-market Strategies and Regulation in the U.S.

    Keywords: Strategy; Governing Rules, Regulations, and Reforms; Government and Politics; United States;

    Citation:

    Yao, Dennis. "Non-market Strategies and Regulation in the U.S." In The Global Internet Economy, edited by B. Kogut, 407–435. Cambridge: MIT Press, 2003.
  4. Antitrust Constraints to Competitive Strategy

    Keywords: Competitive Strategy; Government and Politics; Business and Government Relations; Governing Rules, Regulations, and Reforms;

    Citation:

    Yao, Dennis. "Antitrust Constraints to Competitive Strategy." In Wharton on Dynamic Competitive Strategy, edited by G. Day and D. Reibstein, 313–377. John Wiley & Sons, 1997.

Working Papers

  1. Elevating Repositioning Costs: Strategy Dynamics and Competitive Interactions in Grand Strategy

    This paper proposes an approach for modeling strategic interactions that incorporates the costs to firms of changing their strategies. The costs associated with strategy modifications, which we term “repositioning costs,” constitute a defining feature of strategic choice which is particularly relevant to interactions involving grand strategies. Repositioning costs can critically affect competitive dynamics by making strategies “sticky” and, consequently, the implications of strategic interaction for strategic choice. And yet, while the organization and strategy literatures broadly recognize the importance of repositioning costs, game-theoretic treatments at the grand strategy level with very limited exceptions have not focused on them. In this paper we argue for greater recognition of repositioning costs, provide a repositioning cost typology, and demonstrate the fertility of this approach with a simple model of inter-firm competitive interaction in which repositioning costs increase with the length of time that a firm has been executing its current strategy.

    Citation:

    Menon, Anoop R., and Dennis A. Yao. "Elevating Repositioning Costs: Strategy Dynamics and Competitive Interactions in Grand Strategy." Harvard Business School Working Paper, No. 14-103, April 2014.
  2. Delay as Agenda Setting

    We examine a multi-issue dynamic decision-making process that involves endogenous commitment. Our primary focus is on actions that impact delay, an extreme form of lack of commitment. Delay is strategically interesting when decision makers with asymmetric preferences face multiple issues and have limited resources for influencing outcomes. A delayed decision becomes part of the subsequent agenda, thereby altering the allocation of resources. The opportunity to delay decisions leads the players to act against their short-run interests by changing the expected decision delay. We characterize delay equilibria and explore how delay affects agenda preferences and, when possible, bargaining.

    Keywords: Decision Making; Resource Allocation; Conflict of Interests; Power and Influence; Strategy;

    Citation:

    Anton, James J., and Dennis A. Yao. "Delay as Agenda Setting." Harvard Business School Working Paper, No. 11-082, February 2011. (Revised September 2012.)

Cases and Teaching Materials

  1. Hyperion Power Module: Downsizing the Nuclear Renaissance?

    Keywords: Energy Industry;

    Citation:

    Yao, Dennis, and Britta Kelley. "Hyperion Power Module: Downsizing the Nuclear Renaissance?" Harvard Business School Case 712-457, February 2012.
  2. A Note on Antitrust and Competitive Tactics

    Provides an overview of antitrust law as it relates to competitive strategy. Discusses the problem of managing antitrust risk and provides a guide to business actions that pose antitrust risk.

    Keywords: Laws and Statutes; Risk Management; Monopoly; Business and Government Relations; Competitive Strategy;

    Citation:

    Yao, Dennis A. "A Note on Antitrust and Competitive Tactics." Harvard Business School Background Note 703-493, March 2003. (Revised March 2011.)
  3. CBS and Online Video

    In late March 2007, CBS faces an important decision about its online video strategy. A just-announced joint online distribution venture between NBC Universal and News Corporation (Fox) is the impetus for this decision. Should CBS join forces with this new venture, come to terms with YouTube, the leading video-sharing site on the Internet, or maintain a nonexclusive strategy?

    Keywords: Joint Ventures; Distribution; Business Strategy; Competitive Strategy; Cooperation; Online Technology; Media and Broadcasting Industry;

    Citation:

    Yao, Dennis A., Francisco Pizarro Beleza Rodrigues Queiro, and Julia Rozovsky. "CBS and Online Video." Harvard Business School Case 709-447, November 2008. (Revised February 2010.)
  4. Introduction to Competitive Dynamics: Strategy and Tactics

    Provides an overview of the course Competitive Dynamics: Strategy and Tactics and discusses challenges facing those who wish to use game theory to assist in strategic and tactical decision making.

    Keywords: Decision Choices and Conditions; Game Theory; Competitive Strategy; Competitive Advantage;

    Citation:

    Yao, Dennis A. "Introduction to Competitive Dynamics: Strategy and Tactics." Harvard Business School Course Overview Note 707-475, November 2006. (Revised November 2009.)
  5. Supersonic Business Jets

    In the fall of 2002, Brian Barents, ex-CEO of Galaxy Aerospace, faced an important decision: whether or not to enter the supersonic business jet (SSBJ) industry. Supersonic flight-flight faster than the speed of sound-had long tantalized leaders of commercial aerospace firms. With advances in aviation centered on speed, aerospace manufacturers were long after a supplement to the Anglo-French Concorde, the only civilian supersonic option at the time. Although technologically feasible for generations, previous companies had failed to come up with a plan to bring an SSBJ to market in a way that was both economically feasible and within regulation. Was the business and technical environment in 2002 more conducive to starting a SSBJ venture? If so, what kind of design strategy-low-boom or conventional--was best?

    Keywords: Corporate Entrepreneurship; Governance Compliance; Market Entry and Exit; Business Strategy; Cooperation; Aerospace Industry;

    Citation:

    Yao, Dennis A., and Julia Rozovsky. "Supersonic Business Jets." Harvard Business School Case 709-425, January 2009.
  6. Responding to Imitation: Intel vs. AMD in 1991

    This case examines Intel's response to imitative entry by Advanced Micro Devices into the 386 microprocessor product category in which Intel had been the sole producer. The case is set in 1991 when AMD first introduces its Intel-compatible 386 processor and before Intel's response is known. The case can be used to discuss competitive interactions in pricing and marketing strategy, as well as general issues regarding entry deterrence or accommodation.

    Keywords: Price; Marketing Strategy; Market Entry and Exit; Competition; Hardware; Technology Industry;

    Citation:

    Yao, Dennis A. "Responding to Imitation: Intel vs. AMD in 1991." Harvard Business School Case 709-450, December 2008.
  7. Lobbying for Love? Southwest Airlines and the Wright Amendment

    The fall of 2004 brought exciting news to Love Field, the Texas headquarters of Southwest Airlines. Delta Airlines, one of Southwest's main competitors, had announced that it would dramatically decrease service from the nearby Dallas/Fort Worth International (DFW) airport, cutting the number of daily flights from 250 to a mere 21. Gary Kelly, Southwest's newly minted CEO, thought about what appeared to be a golden opportunity. How could Southwest best capitalize on Delta's withdrawal? As Kelly saw it, Southwest had several options to pursue the new business opportunities. A first was to service the canceled Delta routes from Love Field. A second possibility was to encourage members of Congress to repeal the Wright Amendment, which limited Southwest's flight offerings from Love Field. An alternative to fighting for the repeal of the Wright Amendment was for Southwest to lease the 18 gates that Delta had left at DFW. Kelly carefully considered his options. Was now the time to call his lobbyist?

    Keywords: Governing Rules, Regulations, and Reforms; Government Legislation; Business and Government Relations; Opportunities; Competitive Advantage; Air Transportation Industry; Texas;

    Citation:

    Oberholzer-Gee, Felix, Dennis A. Yao, Libby Cantrill, and Patricia Wu. "Lobbying for Love? Southwest Airlines and the Wright Amendment." Harvard Business School Case 707-470, January 2007. (Revised August 2007.)
  8. CNN and the Cable News Wars

    Set in 1996, when ABC, NBC and Microsoft, and Fox all announced that they will challenge Cable News Network's near monopoly position in the 24-hour cable news channel market. The focus is on the interaction of the strategies likely to be adopted by each player given their relative resources, leadership, and interests.

    Keywords: Leadership; Resource Allocation; Monopoly; Rank and Position; Reputation; Adoption; Competition;

    Citation:

    Anand, Bharat N., Rafael M. Di Tella, and Dennis A. Yao. "CNN and the Cable News Wars." Harvard Business School Case 707-491, November 2006. (Revised July 2007.)
  9. Kroger Union Negotiations 2005

    A stylized version of the negotiations between Kroger Company and its local unions during 2005. Management faces a sequence of individual negotiations with local unions in addition to meeting the new competitive challenges presented by Wal-Mart's expansion in the supermarket industry. Focuses on the impact of each negotiation on the subsequent negotiation.

    Keywords: Labor and Management Relations; Labor Unions; Reputation; Wages; Management; Negotiation Participants; Negotiation Style; Competitive Strategy; Retail Industry;

    Citation:

    Yao, Dennis A., and Mary L. Shelman. "Kroger Union Negotiations 2005." Harvard Business School Case 708-433, July 2007.
  10. Technical Game Theory Note #3: The Relationship Between Bimatrix and Extensive-Form Games and the Meaning of "Strategy"

    Discusses extensive-form games and relates them to bimatrix games.

    Keywords: Relationships; Game Theory;

    Citation:

    Yao, Dennis A. Technical Game Theory Note #3: The Relationship Between Bimatrix and Extensive-Form Games and the Meaning of "Strategy". Harvard Business School Background Note 707-478, November 2006. (Revised June 2007.)
  11. Toyota Motor Corporation: Launching Prius (TN)

    Keywords: Production; Auto Industry; Green Technology Industry;

    Citation:

    Reinhardt, Forest L., and Dennis A. Yao. "Toyota Motor Corporation: Launching Prius (TN)." Harvard Business School Teaching Note 707-558, May 2007.
  12. Free the Grapes--Direct-to-Consumer Shipping in the Wine Industry

    While wine tourism in the United States was booming, the majority of consumers who tasted a Cabernet Sauvignon in one of Napa Valley's tasting rooms were not permitted to ship the wine directly to their home. In 2002, direct-to-consumer shipping was either banned or overly cumbersome in 37 states. W. Reed Foster, president of the Coalition for Free Trade, was determined to remove these obstacles. Would he be able to free the grapes?

    Keywords: Business Conglomerates; Governing Rules, Regulations, and Reforms; Lawsuits and Litigation; Agreements and Arrangements; Business and Government Relations; Corporate Strategy; Food and Beverage Industry; United States;

    Citation:

    Oberholzer-Gee, Felix, Dennis A. Yao, Patricia Wu, and Libby Cantrill. "Free the Grapes--Direct-to-Consumer Shipping in the Wine Industry." Harvard Business School Case 707-472, May 2007.
  13. Game Theory and Business Strategy

    Provides a brief introduction to the application of game theory to business settings. Sets up and analyzes a minicase involving commitment.

    Keywords: Game Theory; Trust; Business Strategy;

    Citation:

    Oberholzer-Gee, Felix, and Dennis A. Yao. "Game Theory and Business Strategy." Harvard Business School Background Note 705-471, January 2005. (Revised March 2007.)
  14. Strategies Beyond the Market--Course Note for Instructors

    Keywords: Business Strategy; Corporate Strategy;

    Citation:

    Oberholzer-Gee, Felix, and Dennis A. Yao. "Strategies Beyond the Market--Course Note for Instructors." Harvard Business School Course Overview Note 707-508, March 2007.
  15. Brighter Smiles for the Masses--Colgate vs. P&G

    In 2000, Procter & Gamble Co. introduced Crest Whitestrips, a new, revolutionary product that allowed consumers to whiten their teeth at home. With Whitestrips, P&G created an entire new category in oral care, worth $460 million in 2002. Whitestrips sent P&G's main competitor in oral care, Colgate Palmolive Co., scrambling because several patents protected the strips, making it difficult for Colgate to copy the invention. But in September 2002, the tables turned. Colgate introduced Simply White, a favorably priced whitening product that consumers could simply paint on their teeth. One month after its introduction, Simply White had captured one half of the market, and Crest Whitestrips lost more than 50% of its share. However, P&G's tests of Simply White indicated that Colgate's new product was largely ineffective. Had Colgate just committed a major strategic blunder by introducing a product that did not work? And, if so, how could P&G best take advantage of the situation?

    Keywords: Competitive Advantage; Competitive Strategy; Advertising; Product Launch; Patents; Price; Performance Effectiveness; Consumer Products Industry;

    Citation:

    Oberholzer-Gee, Felix, Dennis A. Yao, and Filipa Jorge. "Brighter Smiles for the Masses--Colgate vs. P&G." Harvard Business School Case 706-435, December 2005. (Revised March 2007.)
  16. Goodyear and the Threat of Government Tire Grading (TN)

    Teaching note to 707494.

    Keywords: Rubber Industry; United States;

    Citation:

    Oberholzer-Gee, Felix, and Dennis Yao. "Goodyear and the Threat of Government Tire Grading (TN)." Harvard Business School Teaching Note 707-537, March 2007. (Revised April 2013.)
  17. Goodyear and the Threat of Government Tire Grading

    In the spring of 1977, Goodyear CEO Charles J. Pilliod Jr. was looking at an internal report on government and legal events relevant to the tire industry. Two items caught his attention. First, he noticed that an industry suit to block the government's proposed system to rate tires on tread wear, traction, and temperature resistance had been rebuffed by a U.S. appeals court. Although the court found fault with the government's proposals, the ruling could mean that the tire grading system was close to becoming a reality. Second, Joan Claybrook, a former Nader consumer interest group lobbyist, had just become head of the National Highway Traffic Safety Administration, the agency within the government that was in charge of producing the rating system. Pilliod wondered if the regulatory events might affect Goodyear's ability to maintain its world leadership in the tire industry.

    Keywords: Competitive Advantage; Lawsuits and Litigation; Auto Industry; Rubber Industry; United States;

    Citation:

    Oberholzer-Gee, Felix, Dennis A. Yao, and Elizabeth Raabe. "Goodyear and the Threat of Government Tire Grading." Harvard Business School Case 707-494, November 2006. (Revised March 2007.)
  18. Toys "R" Us (A)

    In 1992, Toys "R" Us, the pioneer of the "category killer" retail format, faced significant competitive threats from mass discounters and warehouse clubs and was losing market share. This case explores the dynamic sustainability of Toys "R" Us's retailing model, its competitive options, and the benefits and costs of leveraging market power.

    Keywords: Risk Management; Competition; Supply and Industry; Power and Influence; Retail Industry; United States;

    Citation:

    Rukstad, Michael G., Dennis A. Yao, and Cate Reavis. Toys "R" Us (A). Harvard Business School Case 703-445, February 2003. (Revised December 2006.)
  19. Midway's Entry into Milwaukee: An Interactive Game

    Provides background and instructions to the Airline Pricing Game courseware (9-705-802), an interactive simulation of a new entry by a lower cost airline. The courseware allows students to make round-by-round competitive pricing decisions and react to changing market conditions.

    Keywords: Video Game Industry; Wisconsin;

    Citation:

    Yao, Dennis A. "Midway's Entry into Milwaukee: An Interactive Game." Harvard Business School Background Note 705-470, January 2005. (Revised December 2006.)
  20. Toyota Motor Corporation: Launching Prius

    In 1995, Hiroshi Okuda, president of Toyota Motor Corp., considers whether to push for a more aggressive launch of the Toyota Prius--an automobile that incorporates Toyota's new and technically advanced hybrid power train. This launch decision allows discussion of the importance of the Prius in Toyota's overall product strategy and explores issues ranging from market structure to competitive advantage and competitive dynamics.

    Keywords: Environmental Sustainability; Product Launch; Transportation; Brands and Branding; Manufacturing Industry; Green Technology Industry; Auto Industry; Japan;

    Citation:

    Reinhardt, Forest L., Dennis A. Yao, and Masako Egawa. "Toyota Motor Corporation: Launching Prius." Harvard Business School Case 706-458, January 2006. (Revised December 2006.)
  21. Technical Game Theory Note #4: Contracting and Strategic Alliances

    Provides a game theory-based interpretation of contracting and strategic alliances and introduces the problem of moral hazard.

    Keywords: Contracts; Alliances; Game Theory;

    Citation:

    Yao, Dennis A. "Technical Game Theory Note #4: Contracting and Strategic Alliances." Harvard Business School Background Note 707-480, November 2006.
  22. Technical Game Theory Note #5: Private Information and Signaling Models

    Discusses private information and signaling.

    Keywords: Information; Game Theory;

    Citation:

    Yao, Dennis A. "Technical Game Theory Note #5: Private Information and Signaling Models." Harvard Business School Background Note 707-481, November 2006.
  23. Technical Game Theory Note #6: Multiple-Round Games and Reputations

    Provides a game theory-based interpretation of reputations and reputation building.

    Keywords: Game Theory; Mathematical Methods; Games, Gaming, and Gambling; Reputation; Debates; Strategy; Performance Consistency; Performance Improvement; Strategic Planning; Education Industry;

    Citation:

    Yao, Dennis A. "Technical Game Theory Note #6: Multiple-Round Games and Reputations." Harvard Business School Background Note 707-488, November 2006.
  24. Competitive Headaches (A): The Analgesic Wars

    Addresses the problem of competing with a me-too consumer product. Focuses on Bristol-Meyers' 1975 strategy for introducing a competitor to Tylenol in the analgesic market.

    Keywords: Market Entry and Exit; Competition; Competitive Advantage; Consumer Products Industry; Pharmaceutical Industry;

    Citation:

    Yao, Dennis A. "Competitive Headaches (A): The Analgesic Wars." Harvard Business School Case 707-489, November 2006.
  25. Competitive Headaches (B): OTC Entry of Ibuprofen

    Keywords: Competition; Health;

    Citation:

    Yao, Dennis A. "Competitive Headaches (B): OTC Entry of Ibuprofen." Harvard Business School Supplement 707-490, November 2006.
  26. Kroger Union Negotiations

    A stylized version of the negotiations between Kroger Company and its local unions during the mid-1980s. Management faces a sequence of individual negotiations with local unions during a time of weak economic performance when management is seriously considering shrinking its operations. Focuses on the impact of each negotiation on the subsequent negotiation.

    Keywords: Job Cuts and Outsourcing; Wages; Management; Negotiation Participants; Negotiation Process; Negotiation Tactics;

    Citation:

    Yao, Dennis A. "Kroger Union Negotiations." Harvard Business School Case 707-503, November 2006.
  27. Technical Game Theory Note #1: Solving Bi-matrix Games

    Explains how to solve bi-matrix games and introduces the Nash Equilibrium concept.

    Keywords: Game Theory; Mathematical Methods; Learning; Balance and Stability; Planning; Strategic Planning; Performance Improvement; Strategy; Games, Gaming, and Gambling;

    Citation:

    Yao, Dennis A. "Technical Game Theory Note #1: Solving Bi-matrix Games." Harvard Business School Background Note 707-476, November 2006.
  28. Introducing Frequent Flyer Programs

    Allows students to explore the value to American Airlines of introducing a frequent flyer program in 1981.

    Keywords: Value; Management Analysis, Tools, and Techniques; Mathematical Methods; Game Theory; Competitive Advantage; Programs; Customers; Air Transportation Industry;

    Citation:

    Yao, Dennis A. "Introducing Frequent Flyer Programs." Harvard Business School Case 707-479, November 2006.
  29. Amgen Inc.'s Epogen--Commercializing the First Biotech Blockbuster Drug

    Amgen Inc.'s Epogen was the first biotech blockbuster drug. Epogen helped prevent anemia, a condition that leads to severe fatigue, increased risk of cardiovascular disease, and even death. At the time, the market for Epogen, which included dialysis patients and persons with cancer undergoing chemotherapy, was estimated to be a $1 billion opportunity. After a critical scientific breakthrough, which allowed Amgen to identify the EPO gene, the company applied for a number of patents to protect its achievement. However, much to its surprise, Amgen learned that EPO had already been patented. Genetics Institute, the holder of the patent, demanded a royalty-free cross-license. Amgen's manager needed to decide how best to compete with its rival.

    Keywords: Health Care and Treatment; Strategic Planning; Competition; Patents; Innovation and Invention; Pharmaceutical Industry; Biotechnology Industry; United States;

    Citation:

    Oberholzer-Gee, Felix, and Dennis A. Yao. "Amgen Inc.'s Epogen--Commercializing the First Biotech Blockbuster Drug." Harvard Business School Case 706-454, December 2005. (Revised August 2006.)
  30. Toys "R" Us (B)

    Supplements the (A) case.

    Keywords: Retail Industry;

    Citation:

    Rukstad, Michael G., Dennis A. Yao, and Cate Reavis. Toys "R" Us (B). Harvard Business School Supplement 703-446, February 2003. (Revised September 2003.)
  31. Toys "R" Us (A) and (B) (TN)

    Teaching Note for (9-703-445) and (9-703-446).

    Keywords: Retail Industry;

    Citation:

    Yao, Dennis A., and Michael G. Rukstad. Toys "R" Us (A) and (B) (TN). Harvard Business School Teaching Note 704-428, August 2003.

Other Publications and Materials

  1. Product Market Strategy

    Product market strategy is the collection of choices, actions and activities of a firm that determines how it positions itself in its product markets, and allows it to achieve and maintain a COMPETITIVE ADVANTAGE. This article examines product market strategy from the perspective of positioning, using the value-based strategy framework.

    Citation:

    Menon, Anoop, and Dennis Yao. "Product Market Strategy." In The Palgrave Encyclopedia of Strategic Management, edited by Mie Augier and David J. Teece. Palgrave Macmillan, forthcoming. (Published online October 2013.)
  2. Coca-Cola Bottling Co. of the Southwest: 118 FTC 452

    Keywords: Food and Beverage Industry;

    Citation:

    Yao, Dennis A. "Coca-Cola Bottling Co. of the Southwest: 118 FTC 452." January 1994. (for the majority.)
  3. Trans Union Corp.: 118 FTC 821

    Keywords: Financial Services Industry;

    Citation:

    Yao, Dennis A. "Trans Union Corp. 118 FTC 821." January 1994. (for the majority.)
  4. Adventist Health System/West, et. al. (Concurring Opinion): 117 FTC 224, 297

    Keywords: Health Industry;

    Citation:

    Owen, Deborah, and Dennis A. Yao. "Adventist Health System/West, et. al. (Concurring Opinion): 117 FTC 224, 297." January 1994.