2016 INFORMS Annual Meeting Program

SC56

INFORMS Nashville – 2016

3 - Price Formation And Efficiency In Ride Sharing Services Yi Xu, University of Maryland, yxu@rhsmith.umd.edu, Liu Ming, Tunay Tunca, Weiming Zhu Using data obtained from a leading company, we construct a structural model to estimate price formation in ride-sharing services based on operational characteristics such as the number of consumers and the utilization of drivers. Further, we conduct counterfactual analysis to examine efficiency and welfare implications. 4 - When Do Financial Firms Relocate? A Stochastic View Michael Pinedo, New York University Stern School of Business, 44 West 4th St. KMC8-152, New York, NY, United States, mpinedo@stern.nyu.edu, Yuqian Xu, Lingjiong Zhu We consider a financial firm makes the relocation decision based on two perspectives: i) higher expected utility in relocation, and ii) higher probability in achieving certain utility. In this paper, we use the hiring lead time which is a random variable to capture the difficulty in hiring, and thus how this factor impact the relocation decision. At the same time, we integrate in our model the uncertainty and variation in employee capability as well as the uncertainty in their willingness to relocate.

4 - “Release Early, Release Often”? The Impact Of Release Frequency In Open-source Software Co-creation Wei Chen, University of Arizona, weichen@email.arizona.edu Vish Krishnan, Kevin Zhu A central virtue of OSS is the contributions from the communities, yet our knowledge of how to coordinate and maximize the benefit of such contributions for market success is limited. In this paper, we uniquely formalize, analyze, and validate the impact of product release frequency as a coordinating mechanism in the adoption of open-source products. We build a dynamic structural model to characterize the optimal release strategy from the project owner’s perspective. The theoretical and empirical results have important implications for managing technology-enabled collaboration in open-source communities and for research on open-source software, open innovation, and software adoption. SC57 Music Row 5- Omni Consumer Behavior and Pricing Optimization Sponsored: Behavioral Operations Management Sponsored Session Chair: Nikolay Osadchiy, Emory University, Atlanta, GA, United States, nikolay.osadchiy@emory.edu 1 - Pricing Under Anticipation Javad Nasiry, Hong Kong University of Science and Technology- HKUST, nasiry@ust.hk, Ioana Popescu We model the purchase behavior of consumers by accounting for anticipatory feelings triggered by the prospect of buying at a discount, as well as for the disappointment when anticipated outcomes fail to materialize. We show that sales policies can outperform uniform pricing when a monopolist sells to anticipating customers. 2 - Mental Accounting, Reference Price Adaptation, And The Pricing Of Flat-rate Contracts Manel Baucells, University of Virginia, 100 Darden Blvd, Charlottesville, VA, 22903, United States, baucellsm@darden.virginia.edu, Woonam Hwang We propose a model where consumers possess a mental account that stores the worth of items purchased and yet to be consumed. Reference prices act as the book values of these items, and are determined by a psychological process of adaptation to the price evoked by the trade. The model is integrative, in that it explains a wide array of observed anomalies such as sunk-cost effects, payment depreciation, reluctance to trade, preference for pre-payment, and the flat-rate bias. We explore the pricing implications of the model when it comes to flat-rate pricing. 3 - Tell Me What I Want: A Study Of Personalized Assortment Planning For Learning Consumers Yulia Vorotyntseva, University of Texas at Dallas, Richardson, TX, 7508, United States, yxv120230@utdallas.edu Dorothee Honhon, Canan Ulu We model retailer’s and consumer’s simultaneous learning about the consumer’s idiosyncratic preferences. In each period the retailer chooses an assortment of products to offer the consumer and learns about her preferences by observing the choice. The consumer picks one product, gets a noisy signal about its utility and updates her beliefs in Bayesian fashion. We use this model to study structural properties of the firm’s optimal assortment policy and to quantify the value of information about the consumer’s experience, such as feedback surveys. 4 - Optimal Dynamic Upgrade Xiao Zhang, PhD Candidate, The University of Texas at Dallas, 800 Upgrade, a strategy used in travel industry to balance supply-demand mismatches among products of different quality levels, is usually implemented either at the booking time or at the consumption time. We study a revenue management problem of a firm which sells two products and offers upgrade option anytime when necessary. The optimal policy specifies the timing of the upgrade option and how many customers should be offered this option. West Campbell Rd, Richardson, TX, 75080, United States, xiao.zhang@utdallas.edu, Metin Cakanyildirim, Ozalp Ozer

SC56 Music Row 4- Omni Crowdsourcing and Sharing Economy Sponsored: EBusiness Sponsored Session

Chair: Wei Chen, University of Arizona, 1130 East Helen Street McClelland Hall 430, Tucson, AZ, 85721-0001, United States, weichen@email.arizona.edu 1 - Do Ride Sharing Services Affect Traffic Congestion? An Empirical Study Of Uber Entry Yili Hong, Arizona State University, Tempe, AZ, United States, ykhong1@asu.edu, Ziru Li, Zhongju Zhang Sharing economy, which leverages information technology to re distribute unused or underutilized assets to people who are willing to pay for the services, has received tremendous attention in recent years. Its creative business model has disrupted many traditional industries by fundamentally changing the mechanism to facilitate the matching of demand with supply. In this research, we investigate how Uber affects traffic congestion in the urban areas of the United States. Findings from this research provide evidence on the potential effect of ride sharing services in the transportation industry, contributing to the understanding Wei Chen, University of Arizona, 3750 E Via Palomita, Apt 23103, Tucson, AZ, 85718, United States, weichen@email.arizona.edu, Lijia Xie While significant debate has surrounded the entry of room-sharing services, limited empirical work uncovers the impact of such services to traveler activity, particularly, tourism flow and satisfaction at local destinations. We exploit a set of natural experiments, the entry of two major room-sharing services, Tujia.com and Xiaozhu.com, into markets of China between 2011 and 2015. The study underscores the connection of peer-to-peer accommodation availability to relocation of traveler spending, extended stays and improved experience which are critical to the local tourism industry gains. Important implications of theory, practice, and policy making will be provided. 3 - The Role Of Syndication In Democratizing Capital Flow In Online Equity-crowdfunding Qiang Gao, City University of New York, New York, NY, 85719, United States, qiangg@email.arizona.edu, Mingfeng Lin Equity crowdfunding provides opportunities for startups to raise funds from large number of online potential investors. However, the issue of information asymmetry not only remains as the major barrier for financing these early stage companies but is actually exacerbated by the “virtual” nature of these marketplaces. This paper examines whether syndication, a group of investors who collaborate to pool resources and share risks, in online equity crowdfunding, can alleviate this issue and democratize the access to capital and investment opportunities. We further investigate the drivers for the formation of such syndicates. of the sharing economy and government policy decisions. 2 - Room Sharing Economy And Destination Tourism

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