Nikolaos Trichakis

Visiting Scholar

Nikos Trichakis is an assistant professor of business administration in the Technology and Operations Management Unit, teaching the ‘Understanding and Influencing Operations as an Investor’ course in the MBA elective curriculum, and the ‘Stochastic Modeling’ course in the doctoral curriculum.

In his research, Professor Trichakis investigates the interplay of fairness and efficiency in resource allocation problems and operations, together with the inherent tradeoffs that arise in balancing these objectives. He is interested in diverse industry applications ranging from health care to airlines to finance. His work has been published in Management Science and Operations Research.

Professor Trichakis received his Ph.D. in operations research from the Massachusetts Institute of Technology. He also holds MS degrees from Stanford University and Imperial College (UK), and a BS degree from Aristotle University (Greece), all in electrical and computer engineering. Before his doctoral studies, Professor Trichakis worked in software development at Sungard APT in London.

Journal Articles

  1. Is Operating Flexibility Harmful under Debt?

    Nikolaos Trichakis, Dan A. Iancu and Gerry Tsoukalas

    We study the inefficiencies stemming from a firm's operating flexibility under debt. We find that flexibility in replenishing or liquidating inventory, by providing risk-shifting incentives, could lead to borrowing costs that erase more than a third of the firm's value. In this context, we examine the effectiveness of practical and widely used covenants in restoring firm value by limiting such risk shifting behavior. We find that simple financial covenants can fully restore value for a firm that possesses a mid-season inventory liquidation option. In the presence of added flexibility in replenishing or partially liquidating inventory, financial covenants fail, but simple borrowing base covenants successfully restore firm value. Explicitly characterizing optimal covenant tightness for all these cases, we find that better market conditions, such as lower inventory depreciation rate, higher gross margins, or increased product demand, are typically associated with tighter covenants. Our results suggest that inventory-heavy firms can reap the full benefits of additional operating flexibility, irrespective of their leverage, by entering simple debt contracts of the type commonly employed in practice. For such contracts to be effective, however, firms with enhanced flexibility and/or those operating in better markets must also be willing to abide by more and/or tighter covenants.

    Keywords: covenants; risk-shifting; Inventory; agency costs; debt financing; Risk Management; Borrowing and Debt;


    Trichakis, Nikolaos, Dan A. Iancu, and Gerry Tsoukalas. "Is Operating Flexibility Harmful under Debt?" Management Science (forthcoming). View Details
  2. Fairness and Efficiency in Multiportfolio Optimization

    Dan A. Iancu and Nikolaos Trichakis

    We deal with the problem faced by a portfolio manager in charge of multiple accounts. We argue that because of market impact costs, this setting differs in several subtle ways from the classical (single account) case, with the key distinction being that the performance of each individual account typically depends on the trading strategies of other accounts, as well. We propose a novel, tractable approach for jointly optimizing the trading activities of all accounts and also splitting the associated market impact costs between the accounts. Our approach allows the manager to balance the conflicting objectives of maximizing the aggregate gains from joint optimization and distributing them across the accounts in an equitable way. We perform numerical studies that suggest that our approach outperforms existing methods employed in the industry or discussed in the literature.


    Iancu, Dan A., and Nikolaos Trichakis. "Fairness and Efficiency in Multiportfolio Optimization." Operations Research 62, no. 6 (November–December 2014): 1283–1301. View Details
  3. Pareto Efficiency in Robust Optimization

    Dan Iancu and Nikolaos Trichakis

    This paper formalizes and adapts the well-known concept of Pareto efficiency in the context of the popular robust optimization (RO) methodology for linear optimization problems. We argue that the classical RO paradigm need not produce solutions that possess the associated property of Pareto optimality and illustrate via examples how this could lead to inefficiencies and sub-optimal performance in practice. We provide a basic theoretical characterization of Pareto robustly optimal (PRO) solutions, extend the RO framework by proposing practical methods that verify Pareto optimality, and generate solutions that are PRO. Critically important, our methodology involves solving optimization problems that are of the same complexity as the underlying robust problems, hence the potential improvements from our framework come at essentially limited extra computational cost. We perform numerical experiments drawn from three different application areas (portfolio optimization, inventory management, and project management), which demonstrate that PRO solutions have a significant potential upside compared with solutions obtained via classical RO methods.

    Keywords: robust optimization; Pareto optimality; Resource Allocation; Game Theory;


    Iancu, Dan, and Nikolaos Trichakis. "Pareto Efficiency in Robust Optimization." Management Science 60, no. 1 (January 2014): 130–147. View Details
  4. Fairness, Efficiency and Flexibility in Organ Allocation for Kidney Transplantation

    Dimitris Bertsimas, Vivek F. Farias and Nikolaos Trichakis

    We propose a scalable, data-driven method for designing national policies for the allocation of deceased donor kidneys to patients on a waiting list, in a fair and efficient way. We focus on policies that have the same form as the one currently used in the United States. In particular, we consider policies that are based on a point system, which ranks patients according to some priority criteria, e.g., waiting time, medical urgency, etc., or a combination thereof. Rather than making specific assumptions about fairness principles or priority criteria, our method offers the designer the flexibility to select his desired criteria and fairness constraints from a broad class of allowable constraints. The method then designs a point system that is based on the selected priority criteria and approximately maximizes medical efficiency, i.e., life year gains from transplant, while simultaneously enforcing selected fairness constraints. Among the several case studies we present employing our method, one case study designs a point system that has the same form, uses the same criteria, and satisfies the same fairness constraints as the point system that was recently proposed by U.S. policymakers. In addition, the point system we design delivers an 8% increase in extra life year gains. We evaluate the performance of all policies under consideration using the same statistical and simulation tools and data as the U.S. policymakers use. Other case studies perform a sensitivity analysis (for instance, demonstrating that the increase in extra life year gains by relaxing certain fairness constraints can be as high as 30%) and also pursue the design of policies targeted specifically at remedying criticisms leveled at the recent point system proposed by U.S. policymakers.

    Keywords: fairness; health care policy; healthcare; Fairness; Resource Allocation; Policy; Health Care and Treatment; Medical Specialties; Health Industry; United States;


    Bertsimas, Dimitris, Vivek F. Farias, and Nikolaos Trichakis. "Fairness, Efficiency and Flexibility in Organ Allocation for Kidney Transplantation." Operations Research 61, no. 1 (January–February 2013): 73–87. View Details
  5. On the Efficiency-Fairness Trade-Off

    Dimitris Bertsimas, Vivek F. Farias and Nikolaos Trichakis

    This paper deals with a basic issue: How does one approach the problem of designing the "right" objective for a given resource allocation problem? The notion of what is right can be fairly nebulous; we consider two issues that we see as key: efficiency and fairness. We approach the problem of designing objectives that account for the natural tension between efficiency and fairness in the context of a framework that captures a number of resource allocation problems of interest to managers. More precisely, we consider a rich family of objectives that have been well studied in the literature for their fairness properties. We deal with the problem of selecting the appropriate objective from this family. We characterize the trade-off achieved between efficiency and fairness as one selects different objectives, and we develop several concrete managerial prescriptions for the selection problem based on this trade-off. Finally, we demonstrate the value of our framework in a case study that considers air traffic management.

    Keywords: resource allocation; fairness; decision support; Cost vs Benefits; Fairness; Resource Allocation; Performance Efficiency; Air Transportation Industry;


    Bertsimas, Dimitris, Vivek F. Farias, and Nikolaos Trichakis. "On the Efficiency-Fairness Trade-Off." Management Science 58, no. 12 (December 2012): 2234–2250. View Details
  6. The Price of Fairness

    Dimitris Bertsimas, Vivek F. Farias and Nikolaos Trichakis

    In this paper we study resource allocation problems that involve multiple self-interested parties or players and a central decision maker. We introduce and study the price of fairness, which is the relative system efficiency loss under a "fair" allocation assuming that a fully efficient allocation is one that maximizes the sum of player utilities. We focus on two well-accepted, axiomatically justified notions of fairness, viz., proportional fairness and max-min fairness. For these notions we provide a tight characterization of the price of fairness for a broad family of problems.

    Keywords: Price; Fairness;


    Bertsimas, Dimitris, Vivek F. Farias, and Nikolaos Trichakis. "The Price of Fairness." Operations Research 59, no. 1 (January–February 2011): 17–31. View Details

Cases and Teaching Materials

  1. Financing Curtis LLP

    Nikolaos Trichakis

    This is a follow-up to "Curtis LLP: A Case on Cases," HBS case No. 616-049. It explores the challenges facing debtors when dealing with borrowing firms that have operational flexibility.

    Keywords: Management; Operations; Borrowing and Debt; Financial Services Industry;


    Trichakis, Nikolaos. "Financing Curtis LLP." Harvard Business School Supplement 616-050, February 2016. View Details
  2. Curtis LLP: A Case on Cases

    Nikolaos Trichakis

    A product market firm faces an inventory investment decision in the face of demand uncertainty. To hedge against some of the uncertainty, the firm contemplates an additional fixed investment that would offer the flexibility of diverting inventory in case of weak sales. In a follow-up case, the repercussions of this flexibility are explored.

    Keywords: Dynamic decision making under uncertainty; operations management; Inventory management; real options; Management; Risk and Uncertainty; Decision Choices and Conditions; Operations;


    Trichakis, Nikolaos. "Curtis LLP: A Case on Cases." Harvard Business School Case 616-049, February 2016. (Revised June 2016.) View Details
  3. Credem: Banking on Cheese

    Nikolaos Trichakis, Gerry Tsoukalas and Emer Moloney

    Credem, an Italian regional bank, grants loans to Parmigiano Reggiano producers and holds the cheese as collateral in its own warehouse during the maturation process, essentially replacing part of the operations for the cheese producers and gaining deep operations expertise.

    Keywords: operations; banks and banking; Financing and Lloans; Assets; Animal-Based Agribusiness; Operations; Financing and Loans; Commercial Banking; Agriculture and Agribusiness Industry; Italy;


    Trichakis, Nikolaos, Gerry Tsoukalas, and Emer Moloney. "Credem: Banking on Cheese." Harvard Business School Case 615-046, February 2015. (Revised March 2015.) View Details
  4. Infection Control at Massachusetts General Hospital

    Robert S. Huckman and Nikolaos Trichakis

    The case explores the challenges facing Massachusetts General Hospital concerning the adoption of a new infection control policy, which promises to improve operational performance, patient safety, and profitability. The new policy requires coordination between different departments within the hospital, namely the Emergency Department, the Infection Control Unit, and Admission Services. Students are initially asked to assess the operational, financial and clinical implications of the new policy. They are then asked to examine different approaches to its implementation.

    Objective: The case allows readers to examine a setting where internal coordination across different departments provides significant aggregate benefits for an organization. Coordination in this case, however, also leads to inequitable allocation of costs and benefits across the different departments, which then provides students with an opportunity to explore various implementation challenges and strategies.

    Keywords: Safety; Organizational Change and Adaptation; Integration; Health Care and Treatment; Policy; Health Industry; Boston;


    Huckman, Robert S., and Nikolaos Trichakis. "Infection Control at Massachusetts General Hospital." Harvard Business School Case 614-044, November 2013. (Revised November 2014.) View Details