Informs Annual Meeting 2017

SD25

INFORMS Houston – 2017

SD24

SD25

342F Innovative Topics in Revenue Management Sponsored: Revenue Management & Pricing Sponsored Session Chair: So Yeon Chun, McDonough School of Business, Georgetown Universit, Wyashington, DC, 20057, United States, sc1286@georgetown.edu 1 - Advance Selling to Strategic Consumers: the Advance Selling Target and the Preorder Contingent Production Strategy Motivated by emerging industry practices, this paper studies the effectiveness of a new advance selling strategy in counteracting strategic consumer behavior: the preorder contingent production (PCQ) strategy, where the seller’s production decision is contingent on preorder quantities. We find that compared to the traditional advance selling strategy, the PCQ strategy is effective in mitigating strategic waiting behavior and thus can significantly improve the seller’s profit performance. 2 - Selective Selling in Social Networks Ruslan Momot, INSEAD, Boulevard de Constance, Fontainebleau, 77305, France, ruslan.momot@insead.edu, Elena Belavina, Karan Girotra, Karan Girotra We consider the use and value of social network information in selectively selling goods and services whose value derives from exclusive ownership among network connections. Our model accommodates customers who are heterogeneous in their number of friends (degree) and proclivity for social comparisons (conspicuity). We show how the firm with information on either (or both) of these traits can use it to increase profits making a product selectively available to the firm’s best targets - high-conspicuity customers within intermediate-degree segments. We find that information about degree is more valuable than information about conspicuity and that the two are substitutes. 3 - The Effects of Menu Costs on Supply Chain Efficiency: Evidence from Adoption of the Electronic Shelf Label Technology Ioannis (Yannis) Stamatopoulos, University of Texas at Austin, McCombs School of Business, 2110 Speedway, B6000 Austin, TX 7870, Office 6484, Austin, TX, United States, yannis.stamos@mccombs.utexas.edu, Antonio Moreno-Garcia, Achal Bassamboo We use the differential timing of adoption of electronic shelf labels (ESLs) in stores of a major international grocery retailer in the UK to identify the effects of reducing physical menu costs on supply chain efficiency. ESLs effectively eliminate the physical costs associated with price adjustment (e.g., costs of printing and distributing price tags). We find that the elimination of physical menu costs benefits all supply chain stakeholders. 4 - Loyalty Program Design and Consumer Decisions to Redeem Points or Spending Money So Yeon Chun, McDonough School of Business, Georgetown University, 37th & O.Streets, Hariri Building, office #542, Washington, DC, 20057, United States, sc1286@georgetown.edu, Rebecca Hamilton In many loyalty programs, customers earn points for their purchases, which they can later exchange for additional products and services. In a sense, points function as a currency that consumers can spend on products instead of spending money. However, we uncover systematic differences in the way consumers spend loyalty points compared with money. To highlight different mechanisms by which loyalty program design characteristics may influence redemption, we first propose a model of the consumer’s choice to redeem points or use money for a specific purchase, and then we conduct a series of studies to investigate the impact of these characteristics on consumers’ choices. Mingcheng Wei, University at Buffalo, 326C Jacobs Management Center, Buffalo, NY, 14260, United States, mcwei@buffalo.edu, Fuqiang Zhang

350A Outsourcing Innovation and Product Development Invited: New Product Development Invited Session Chair: Ersin Korpeoglu, University College London, London, N17 9GL, United Kingdom, e.korpeoglu@ucl.ac.uk Co-Chair: C Gizem Korpeoglu, University College London, London, WC1E 6BT, United Kingdom, c.korpeoglu@ucl.ac.uk 1 - Technology Choice in Dynamic Competition Feng Tian, University of Michigan, 1760 Broadway St, Apt 303, Ann Arbor, MI, 48105, United States, ftor@umich.edu, Izak Duenyas, Mohamed Mostagir Two firms innovate over time and the firm that produces the better innovation by the end of the horizon wins. Firms have access to different technologies and have to decide which technology to use in each time period given the past choices and outcomes. Technologies are heterogeneous along several dimensions: they may have different variances, costs, and ability to learn from previous attempts. We characterize the equilibria of this dynamic competition and compare their welfare properties as a function of the different parameters of the problem. 2 - The Role of Feedback in Dynamic Crowdsourcing Contests: A Structural Empirical Analysis Zhaohui Jiang, PhD Student, University of Michigan, Ann Arbor, MI, 48109, United States, jiangzh@umich.edu, Yan Huang, Damian Beil This paper examines the impact of performance feedback on the outcome of crowdsourcing contests. We develop a dynamic structural model to capture the economic processes that drive contest participants’ behavior, and estimate the model using a data set collected from a major online crowdsourcing platform. The model captures key features of the crowdsourcing context, including a large participant pool, entries by new participants throughout the contest, and exploitation and exploration behaviors by contest incumbents. Using counterfactual simulations, we show that providing feedback throughout the contest may not be optimal; the late feedback policy leads to a better overall contest outcome. 3 - Optimal Stochastic Feedback in Asymmetric Dynamic Contests Jurgen Mihm, Insead, Boulevard De Constrance, Boulevard de Constance, 77305, France, jurgen.mihm@insead.edu, Jochen Schlapp A contest is an incentive mechanism in which a number of contestants compete against each other at their own expense of effort to provide the best performance and to win a limited number of prizes. Feedback can be a mechanism for contest holders to increase the effort levels of the contestants and hence contest outcomes. In this talk, we characterize a contest holder’s optimal choice of (stochastic) public feedback for asymmetric dynamic contests. 4 - Contest Among Contest Organizers C. Gizem Korpeoglu, University College London, Gower Street, London, WC1E 6BT, United Kingdom, c.korpeoglu@ucl.ac.uk, Ersin Korpeoglu, Isa Hafalir We study multiple contests where contest organizers elicit solutions to innovation-related problems from a set of agents. Each agent may participate in multiple contests and exert effort to improve her solution, but the quality of her solution also depends on an output uncertainty. We show, somewhat surprisingly, that organizers benefit from agents’ participation in multiple contests when agents’ output uncertainty is sufficiently large. We then show that the organizer profit is unimodal in the number of contests, and more interestingly, the optimal number of contests increases with agents’ output uncertainty. This finding may explain why many organizations run multiple contests in practice.

109