2016 INFORMS Annual Meeting Program

WE58

INFORMS Nashville – 2016

WE55 Music Row 3- Omni E Business/Commerce II Contributed Session

WE56 Music Row 4- Omni Decision Support Systems III Contributed Session

Chair: Avijit Sarkar, Associate Professor, University of Redlands, 1200 E Colton Avenue, Redlands, CA, 92373, United States, avijit_sarkar@redlands.edu 1 - Why Some Markets Refuse Innovation And Entrepreneurship, When They Say They Love It: Evidence From Uber’s Transportation Network Service Robert Seamans, New York University-Stern, 1 Washington Square Village, # 7J, New York, NY, 10012, United States, rseamans@stern.nyu.edu, Sukhun Kang, Yongwook Paik We study how established firms use non-market strategy to slow entry by sharing economy firms. We study this issue using a unique dataset that includes data on Uber’s expansion into various U.S. cities during 2011-2015, together with data on political contributions and election outcomes. We find that the more politically entrenched a market is, the more resistance the entrant faces when working to commercialize its innovation. This study has theoretical, managerial, and policy implications for the ever-growing sharing economy, and highlights that, despite the benefits of innovation, there often times exists strenuous resistance to it, particularly from established firms in a market. 2 - The Effect Of Individual Characteristics On Online Purchase Decision Processes And Outcomes K. Nadia Papamichail, Senior Lecturer (Associate Professor), University of Manchester, Manchester Business School, Booth Street East, Manchester, M15 6PB, United Kingdom, nadia.papamichail@manchester.ac.uk, Sahar Karimi, Christopher P. Holland This paper presents a typology of online purchase archetypes based on consumers’ individual characteristics such as decision-making style and knowledge of product. Video material has been collected and analysed to capture how online purchase decision making processes unfold for different archetypes. This is followed by an empirical study that explores the effect of decision-making style and knowledge of product on decision-related outcomes such as satisfaction with process and satisfaction with choice. Practical implications for online retailers are discussed. 3 - Subscribe Or Sell: Itunes Versus Google Play Music All Access Hooman Hidaji, Alberta School of Business, 2-24 Alberta School of Business, Edmonton, AB, T6G 2R6, Canada, hooman.hidaji@ualberta.ca Recently, subscription has become a popular method of user monetization in online media business along with selling model. It is expected that firms utilize both approaches to cover as much demand as possible. However, pricing strategy of the firms is crucial in determining the demand for the two. In this study, using an economic model with endogenous demand, we set to model how the firm decides on the business model. Different user types and business model- dependent demand are considered. We also look into advertising and group plans (such as family plans) for such services in the online entertainment industry. 4 - Socioeconomic Determinants And Geographic Patterns Of Internet Use For E-commerce And E-entertainment In Counties Of The United States Avijit Sarkar, Associate Professor, University of Redlands, 1200 E Colton Avenue, Redlands, CA, 92373, United States, avijit_sarkar@redlands.edu, James B Pick This research analyzes social-economic, innovation, and social capital influences on the use of the internet to access e-commerce and e-entertainment services for a large sample of U.S. counties. Nationwide geographic patterns and clustering of e-commerce and e-entertainment use of the internet are identified and explained. A Spatially Aware Technology Utilization Model explicitly considers underlying geographic relationships between model variables and diagnoses spatial bias in standard multivariate analysis. Implications for the digital divide in the United States are discussed and policies to expand use of the internet for e-commerce and e-entertainment use are recommended.

Chair: Munirpallam A Venkataramanan, Professor, Indiana University, Bryan Hall, 100, 107 S. Indiana Avenue, Bloomington, IN, 47405, United States, venkatar@indiana.edu 1 - An Operational Control Design Methodology For Warehouse Order Fulfillment Timothy Sprock, Post Doctoral Fellow, Georgia Institute of Technology, 755 Ferst Dr, NW, Georgia Institute of Technology, Atlanta, GA, 30332, United States, tsprock3@gatech.edu Smart operational control mechanisms for material handling systems must not only integrate real-time data from system operations, but also formulate and solve a wide variety of optimal-control analyses and then translate the results into executable commands. Automated and cost-effective access to multiple analyses from a single conceptual model of the target system would broaden the usage and implementation of analysis-based decision support and system optimization. The fundamental contribution of this research is concerned with interoperability and bridging the gap between operations research analysis models and practical applications of the results. 2 - Analytic Approaches In Higher Education Administration Munirpallam A Venkataramanan, Professor, Indiana University, Bryan Hall, 100, 107 S. Indiana Avenue, Bloomington, IN, 47405, United States, venkatar@indiana.edu, Kathryn Ernstberger Analytic grounded decision making offers new ways for universities to make operational decisions as well as address student teaching and learning issues. An overview of platforms available for such an approach is provided along with a discussion of some best practices. Recent successes at Indiana University are highlighted. 1 - Re-Evaluating The Performance Of Markowitz’s Portfolio Selection Model In Terms Of The Distance Measure Approach Hunbae Jeon, Master Student, Yonsei University, 109-1902, Lotte Apt., 31, Saemal-ro, Guro-gu, School of Business (Bld.#212) Rm.#301, Seoul, 08291, Korea, Republic of, hborjh1021@naver.com, Hongseon Kim, Seongmoon Kim We have used Sharpe Ratio to evaluate the performance. However, it couldn’t evaluate portfolios itself, because it is no more than checking the risk and return. Therefore we suggest distance measure approach as a new method to evaluate the portfolio performance. In this paper, we construct the optimal portfolio by using Markowitz’s model, and generate random portfolios, and then calculate some distances between optimal and random portfolios. Then we show Euclidean distance is the best for analyzing the performance of Markowitz’s model by comparing differences in terms of these distances. 2 - Official Visits And Firms’ Employee: Evidences From China Qiu Muqing, Tongji University, Siping Road, Shanghai, China, qsolemn@126.com Different from the articles which discuss how to seek the protection of government by political connections from the angle of the firms, this paper studies how to achieve the social goals by official visits from the angle of Chinese government. We find that political connections are common in countries around the world, but official visits have “Chinese Characteristics”. The paper finds that the officials are inclined to visit the firms which can absorb more employees. Official visits can increase the number of employees, especially for employees with college degree or below. This relation is much stronger in state-owned firms. 3 - A Real Option Analysis On Performance-sensitive Debt Bo Liu, University of Electronic Science and Technology of China, No.2006, Xiyuan Ave, West Hi-Tech Zone, Chengdu, 611731, China, b.liu07@fulbrightmail.org This paper adopts a real option approach to examine how the use of Performance- Sensitive Debt (PSD) contract affects the inefficiencies arising from financing constraints. The results show that if financing constraints are sufficiently weak, the use of PSD encourages the constrained firm to use a higher investment threshold and thus leads to a significant decrease in ex ante firm value compared to fixed-coupon debt. These results further imply that although PSD makes more financially constrained firms better off, less financially constrained firms face a trade-off between lower efficiency in ex ante firm value and higher efficiency in investment and financing decisions. WE58 Music Row 6- Omni Finance IV Contributed Session

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