2016 INFORMS Annual Meeting Program

MB28

INFORMS Nashville – 2016

MB26 110B-MCC Assignment and Matching Markets

3 - The Effects Of Menu Costs On Operational Efficiency In Retail Yannis Stamatopoulos, McCombs School of Business, Austin, TX, United States, yannis.stamos@mccombs.utexas.edu, Antonio Moreno-Garcia, Achal Bassamboo It is well-documented that retail prices exhibit a certain degree of inertia. That is, prices often do not immediately respond to changes in demand and/or cost conditions. To explain this phenomenon, economists have employed the notion of menu costs, which summarize all price adjustment costs faced by firms (e.g., the costs of printing and distributing price tags). We empirically study the effect of menu costs on operational efficiency in retail. 4 - The Value Of Fit Information In Online Retail: Evidence From A Randomized Field Experiment Santiago Gallino, Dartmouth College, Hanover, NH, santiago.gallino@tuck.dartmouth.edu, Antonio Moreno-Garcia By implementing a series of randomized field experiments, we study the value of virtual fit information in online retail. Customers are randomly assigned to a treatment condition where virtual fit information is available or to a control condition where virtual fit information is not available. Our results show that offering virtual fit information increases conversion, basket sizes, average price of purchased products, and revisits to the site, while reducing fulfillment costs arising from returns and home try-on behavior. MB28 201B-MCC New Models for Pricing Sponsored: Manufacturing & Service Oper Mgmt Sponsored Session Chair: Gustavo Vulcano, NYU, 44 West Fourth St, New York, NY, 10012, United States, gvulcano@stern.nyu.edu 1 - The Theory Of Large-scale Bundle Size Pricing Tarek Abdallah, New York University, New York, NY, United States, tabdalla@stern.nyu.edu, Arash Asadpour, Joshua Reed Bundle size pricing (BSP) is a non-traditional multi-dimensional selling mechanism where the seller prices the size of the bundle rather than the different possible combinations of bundles. In BSP, the seller offers the customer a menu of different sizes and prices. The customer then chooses the size that maximizes his surplus and customizes his bundle accordingly. We present a theoretical framework to analyze the large scale BSP problem. We show that, in the presence of a homogeneous population of consumers, as the number of items grows large, the optimal BSP is to offer a single size which depends on the consumers’ budgets and the marginal costs. 2 - Coordinating Supply And Demand On An On-demand Service Platform: Price, Wage, And Commission Rate Jiaru Bai, University of California- Irvine, Irvine, CA, 92617, United States, jiarub@uci.edu, Kut C So, Christopher S Tang, Hai Wang, Xiqun Chen We study an on-demand service platform with heterogeneous customers and independent service providers. Customers are sensitive to both price and waiting time for the service, and service providers decide to participate in the platform based on their own reservation wage rates. The platform needs to select the optimal price and wage rates to maximize its own profit subject to some target service requirement. 3 - Price Competition With Consumer Price Perception Dana Popescu, INSEAD, dana.popescu@insead.edu While e-commerce has made price comparisons across retailers easier, consumers still have limited ability to search for the best deal on every product all the time. Most often, consumers form perceptions about the price competitiveness of a retailer by comparing the distribution of prices for only a subset of items across different retailers. If they perceive that a retailer has the lowest prices, then consumers can be inclined to purchase products from that retailer without a search, depending on the search costs and the expected savings from finding a better deal. In a market with heterogeneous products and multiple sellers we analyze the best pricing strategy for a retailer and its implications.

Invited: Auctions Invited Session Chair: Thayer Morrill, North Carolina State University, Raleigh, NC,

United States, thayermorrill@gmail.com 1 - Which School Assignments Are Legal? Thayer Morrill, North Carolina State University, thayermorrill@gmail.com

A plaintiff must demonstrate that actions caused her harm and that this harm is redressable in order to have legal standing. We define a set of assignments to be legal if whenever a student is harmed (has justified envy) there is no legal assignment where she is assigned to that school (her harm is not redressable). We show that for any school assignment problem, there is a unique set of legal assignments; the set of legal assignment is a superset of the assignments that eliminate justified envy; but the Lattice Theorem, Decomposition Lemma, and Rural Hospital Theorem all hold. Moreover, there is a unique, Pareto efficient, legal assignment: the assignment made by Kesten’s EADA when all students consent. 2 - School Choice Under Partial Fairness Umut Dur, North Carolina State University, udur@ncsu.edu A recent trend in school choice suggests that districts are willing to violate certain types of priorities in order to improve students’ welfare. We generalize the school choice problem by allowing such violations. We characterize the set of efficient outcomes for a school choice problem in this setting. We introduce a class of algorithms, denoted Student Exchange under Partial Fairness (SEPF), which guarantees to find a constrained efficient matching for any problem. Any efficient matching which improves upon a stable matching can be obtained via an algorithm within the SEPF class. We offer two applications, each corresponding to a different interpretation of priority violations. 3 - Optimization In Team Formation Hoda Atef-Yekta, University of Connecticut, Hoda.AtefYekta@business.uconn.edu In this talk we discuss a binary quadratic programming formulation for team- formation problems. We develop a column generation scheme which provides orders of magnitude speedups over existing algorithms, and compare the solutions obtained with those found by existing mechanisms on measures of efficiency, fairness, stability, and the effect of strategic behavior. MB27 201A-MCC Empirical Research in Operations Sponsored: Manufacturing & Service Oper Mgmt Sponsored Session Chair: Antonio Moreno-Garcia, Kellogg School of Management, 2001 Sheridan Rd, Evanston, IL, 60208, United States, a-morenogarcia@kellogg.northwestern.edu 1 - Regulation And Efficiency In Government Procurement: A Regression Discontinuity Approach Juan Camilo Serpa, McGill University, Montreal, QC, Canada, juan.serpa@mcgill.ca, Ruomeng Cui, Eduard Calvo We study the effect of public regulation on contracting efficiency in the U.S., where efficiency is measured through delay times and budget overruns. To explore this effect, we use data from 12 million procurement contracts from the federal government, and exploit a natural experiment introduced Federal Acquisition Streamlining Act (FASA). 2 - On The Competitive And Collaborative Implications Of Category Captainship Yasin Alan, Vanderbilt University, Nashville, TN, United States, yasin.alan@owen.vanderbilt.edu, Jeffrey P Dotson, Mumin Kurtulus We empirically examine the impact of a category captainship implementation performed by a large U.S. grocer on various parties involved, including the retailer, the captain, and the competing manufacturers. Our findings verify some of the hypotheses developed in the relevant theoretical literature and refute others.

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