2016 INFORMS Annual Meeting Program

TA27

INFORMS Nashville – 2016

TA25 110A-MCC Project Related SCM III Invited: Project Management and Scheduling Invited Session Chair: Xiaoqiang Cai, The Chinese University of Hong Kong, Shatin, Hong Kong, 000, Hong Kong, xqcai@se.cuhk.edu.hk 1 - An Iterative Capacity Sharing Mechanism For Freight Forwarders Minghui Lai, Southeast University, Nanjing, China, laimh@seu.edu.cn, Weili Xue We consider the collaboration problem of forwarders in transportation capacity sharing over a general logistics network. As competition for capacity is intensive and usually carriers reserve more capacity for big customers, small forwarders can form an alliance to jointly book allotment capacity before the freight season. During the season, forwarders observe their private demand realization and then share the capacity to deliver their services. Capacity sharing also reduces cost, due to economies of scale from fixed cost. We propose a strategy-proof iterative mechanism, and prove that the mechanism is finitely convergent and individually rational. 2 - Value Of Category Captainship With Shelf-space Dependent Demand Weili Xue, Southeast University, wlxue1981@gmail.com, Minghui Xu We consider a supply chain with one retailer and two manufacturers, who sell his product through the retailer to the consumer market. We consider two category management scenarios. In the retailer category management scenario, the retailer makes decisions on how to allocate the total shelfspace to all his products, and what is the selling price for each product. In the captain category management scenario, the retailer delegates the pricing and allocation decisions to one of the supplier (the captain). In both scenarios, the retailer will decide the total shelf- space allocated to this category. We analyze these two scenarios when the selling prices for both products are exogenously given. 3 - A Noncooperative Game Model And Algorithm For a Utility Computing System Pengyu Yan, Associate professor, University of Electronic Science and Technology of China, Chengdu, China, yanpy@uestc.edu.cn, Hongru Miao, Nicholas G Hall, Guanhua Wang Selfish behaviors of resource users and providers can damage the performance of utility computing systems. Existing market-based approaches effectively allocate resources and schedule tasks to minimize the costs for users. Using a noncooperative sequencing game model, we study the providers’ decisions about the computing resources they allocate to the system to complete tasks. To find a Nash equilibrium strategy, the model is transformed into a directed bi-valued cyclic graph, and a polynomial time algorithm is proposed. The price of anarchy and incentive contract design are also discussed. 4 - Principal-agent vs Revenue Sharing Contracts In The Optimal Supplier Switching Model With Learning Effect Qian Wei, Tianjin University, qwei@tju.edu.cn, Jianxiong Zhang This paper examines two contracts (Principal-agent and Revenue sharing) in a supplier switching model with considering learning effect. Our analysis reveals that both contracts can be optimal under different parameter settings. Furthermore, we compare the two contracts from an ex-post perspective. We find the switching strategy on the basis of the principal-agent theory dominates that based on the revenue sharing contract when the learning rate lies in an intermediate region, while the result is reversed with a relatively large or small learning rate. Invited: Auctions Invited Session Chair: Robert Day, University of Connecticut, Storrs, CT, United States, Bob.Day@business.uconn.edu 1 - Dynamic Demand Estimation In Auction Markets Greg Lewis, Microsoft Research New England, glewis@microsoft.com, Matthew Backus Auction mechanisms play an important part in allocating goods, yet existing empirical auction techniques treat each auction in isolation, obscuring market interactions. We provide a framework for estimating demand in a large auction market with a dynamic population of buyers with unit demand and heterogeneous preferences over a finite set of differentiated products. We offer an empirically tractable equilibrium concept, characterize bidding and prove existence of equilibrium. Having developed a demand system, we show that it is TA26 110B-MCC Auctions and Econometrics

non-parametrically identified from panel data. We apply the model to measure consumer surplus in the market for compact cameras on eBay. 2 - Identification And Estimation Of Affiliated Private Values Auctions With Unobserved Heterogeneity Jorge Balat, Johns Hopkins, jorge.balat@jhu.edu I consider a first-price auction model with affiliated private values and unobserved heterogeneity. Both affiliation and unobserved heterogeneity manifest in bids that are correlated and it is hard to disentangle these two sources apart from bid data alone. I show that the model is nonparametrically identified once we allow for endogenous participation and leverage entry data combining ideas from the control function and measurement error literatures. I propose a nonparametric estimator and show how one can test for different information structures. I then take the model to data from highway procurement auctions from California. I find evidence of both unobserved heterogeneity and affiliation. 3 - Simultaneous First-price Auctions With Preferences Over Combinations Matthew Gentry, LSE, United Kingdom, M.L.Gentry@lse.ac.uk, Tatiana Komarova, Pasquale Schiraldi We develop a structural model of strategic bidding in simultaneous first-price auctions when objects are heterogeneous and bidders have preferences over combinations. We then apply this model using data on Michigan Department of Transportation (MDOT) highway procurement auctions. Our results suggest that the simultaneous first-price mechanism performs very well relative to theoretically attractive but practically costly alternatives such as combinatorial proxy auctions, helping to rationalize the widespread use of simultaneous auctions in practice. 4 - Robust Data-driven Welfare Guarantees In Auctions Vasilis Syrgkanis, Microsoft Research, vasy@microsoft.com, Darrell Hoy, Denis Nekipelov Analysis of welfare in auctions comes traditionally via one of two approaches: precise but fragile inference of the exact details of a setting from data or robust but coarse theoretical price of anarchy bounds that hold in any setting. As markets get more and more dynamic and bidders become more and more sophisticated, the weaknesses of each approach are magnified.In this paper, we provide tools for analyzing and estimating the empirical price of anarchy of an auction. The empirical price of anarchy is the worst case efficiency loss of any auction that could have produced the observed data. TA27 201A-MCC New Developments in Sourcing and Selling Strategies Sponsored: Manufacturing & Service Oper Mgmt Sponsored Session Chair: Basak Kalkanci, Georgia Institute of Technology, Atlanta, GA, United States, basak.kalkanci@scheller.gatech.edu Co-Chair: Necati Tereyagoglu, Scheller College of Business, Georgia Institute of Technology, Atlanta, GA, United States, necati.tereyagoglu@scheller.gatech.edu 1 - Strategic Sourcing Under Competition And Asymmetric Cost Information Lusheng Shao, The University of Melbourne, Level 10, 198 Berkeley Street, Melbourne, 3010, Australia, lusheng.shao@unimelb.edu.au, Xiaole Wu, Fuqiang Zhang We study a sourcing game where competing firms choose between a supplier with certain cost (C-supplier) and a supplier with potentially lower, but uncertain cost (U-supplier). We find that with a larger market potential, the firms would more likely choose a C-supplier despite its higher average cost. The higher cost uncertainty of a U-supplier may either improve or reduce its attractiveness to the sourcing firms, depending on its current uncertainty level. The increasing cost of C-supplier may lead to a new sourcing equilibrium and thus make both sourcing firms better off. 2 - Money-back Guarantees In A Distribution Channel: Bargaining Power & Downstream Competition Yufei Huang, Assistant Professor, University of Bath, Bath, United Kingdom, y.huang@bath.ac.uk, Tingliang Huang, Ying-Ju Chen Although existing literature emphasizes the usefulness of Money-back Guarantees (MBG), little is known about why retailers may adopt different MBG choices in practice. To understand this, we examine two competing retailers’ MBG decisions, who also simultaneously bargain for wholesale prices with a wholesaler in a distribution channel. We show that, retailers’ asymmetric bargaining power may lead to asymmetric MBG choices. We provide economic rationales for all possible MBG outcomes.

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