A Randomized Controlled Trial Comparing Endoscopic-Assisted Versus Open Neck Tissue Expander Placement in Reconstruction of Post-Burn Facial Scar Deformities
Background ::: Tissue expansion has evolved reconstruction surgery by providing a great source of additional tissue for large skin defects. Nevertheless, wide application of tissue expander reconstruction is challenging due to high complication rates and uncertainty about final outcomes. Recently, endoscopy has shown promise in reconstructive surgeries using tissue expander placement.
We study the problem of hedging early exercise (American) options with respect to exponential utility within a general incomplete market model. This leads us to construct a duality formula involving relative entropy minimization and optimal stopping. We further consider claims with multiple exercises, and static-dynamic hedges of American claims with other European and American options. The problem is important for accurate valuation of employee stock options (ESOs), and we demonstrate this in a standard diffusion model. We find that incorporating static hedges with market-traded options induces the holder to delay exercises and increases the ESO cost to the firm.