Informs Annual Meeting 2017

TA50

INFORMS Houston – 2017

2 - Effects of Certificates on Buyers’ Order Cancellations in E-marketplaces Sang Won Kim, Assistant Professor, CUHK.Business School, The Chinese University of Hong Kong, Shatin NT, Hong Kong, skim@cuhk.edu.hk, Youngsok Bang, Yiying Zhang Despite a plethora of previous studies on the role of seller certificates in e- marketplaces, we have a limited understanding of their effects in post-order stage where buyers can reverse their purchase decisions. Based on the psychological contract violation theory, we propose hypotheses about potential negative effects of certificates and test them using transaction data from a leading e-marketplace in Korea. Our results suggest that, given the time elapsed from the order, buyers are more likely to cancel their orders from “quick” sellers, whereas the impact is reversed for “quality” or “quantity” sellers. We also examine how the results vary over different product types and purchase channels. 3 - Online Retailer Competition with an Option of Referral Services We investigate whether two competing online retailers can be better off by adopting a referral service. When they adopt the referral service, a referral- offering online retailer faces a trade-off between generating additional revenues from referral fees and the risk of exposing its loyal consumers to the price of its referred online retailer. We show that the proportion of strongly loyal consumers of the referral-offering retailer among all its (potential) consumers mainly determines the degree to which the referral service will improve the retailers’ profits. 4 - Domestic Expansion Strategies for Online Grocery Retailers: Case Study from Emerging Economy Rajiv Misra, Professor, XLRI-Xavier School of Management, C. H. Area (East), Jamshedpur, 831001, India, rajiv@xlri.ac.in, Sayan Mukherjee, Alok Baveja, Atanu Ghosh This is a study on the strategies that an Online Grocery Store can consider for expansion in the domestic market. Our overarching research questions are: 1.What strategic options does an online grocery store have when it considers expansion? 2. What factors affect the choice of an expansion strategy? By conducting literature review and by evaluating cases from an emerging economy, we first try to explore the strategic options available for expansion and the factors that affect the choice of each option. Taking the case of a leading online grocery retailer in India, we next longitudinally evaluate the decisions taken by the retailer while expanding into several locations in the domestic market. 361C Advances in Urban Transportation Sponsored: TSL, Urban Transportation Sponsored Session Chair: Qie He, University of Minnesota, Minneapolis, MN, 55455, United States, qhe@umn.edu 1 - Real Options Switching Strategies in Dynamic Transportation Operations Joseph Y.J. Chow, New York University, 2 Washington Square With increasing ubiquity of real time data in urban transportation, there is a need for dynamic decision-making to switch operational mode based on an underlying stochastic process. Examples include flexible transit that switch between fixed route and on-demand operations; autonomous vehicle fleet management; and taxi surge pricing. We present an analytical optimal policy model based on market entry-exit real options to identify such switching thresholds. The model assumes an Ornstein-Uhlenbeck stochastic process and can reduce up to 72% of the excess cost of a myopic policy. Test cases are presented to illustrate the model. 2 - Continuous Approximation on the Vehicle Routing Problem with Unpaired Pickup and Delivery Chao Lei, Ph. D., University of Illinois at Urbana–Champaign, 205 N Mathews Ave, Urbana, IL, 61801, United States, chaolei@illinois.edu, Yanfeng Ouyang We propose a hybrid modeling framework for the vehicle routing problem with unpaired pickup and delivery (VRPPD) of a commodity. Continuum approximation (CA) is used to model internal pickup and delivery within each of multiple subregions, while matching of net excess or deficit of the commodity out of these subregions is addressed in a discrete model. A Lagrangian relaxation algorithm is developed to solve the hybrid model for large-scale VRPPD instances. Kihoon Kim, Associate Professor, Korea University, Korea Univeristy Business School, LG-POSCO.#316, Anam-dong, Seongbuk-gu, Seoul, 136701, Korea, Republic of, kihoon@korea.ac.kr TA50 Village, Apt. 10i, New York, NY, 10012, United States, joseph.chow@nyu.edu, Qianwen Guo, Paul M. Schonfeld

3 - Analysis of Two Hybrid Route Choice Models in Stochastic Assignment Paradox Zhanhong Cheng, Harbin Institute of Technology, Harbin, China, 18369181837@163.com, Jia Yao This paper compares the stochastic assignment paradoxes of the multiplicative hybrid model and the linear combinatorial hybrid model, both of which can overcome the drawbacks of the multinomial logit/weibit model, in three typical networks (two links, independent links, and three routes with an overlapping link). 4 - Traffic Assignment Paradox Incorporating Congestion and Stochastic Perceived Error Jia Yao, Harbin Institute of Technology, Harbin, China, yaojia@hit.edu.cn This paper analyzes how congestion and stochastic perceived error affect traffic assignment paradox simultaneously. The paradox corresponding to the travel cost and the perceived travel cost for marginal improving and adding a link and information paradox in which a higher stochastic perceived error decrease the travel cost are analyzed respectively. 361D Online Markets Sponsored: Information Systems Sponsored Session Chair: Wei Chen, Tucson, AZ, 85718, United States, weichen@email.arizona.edu 1 - Value of Diversity in Online Equity Crowdfunding Mingfeng Lin, University of Arizona, 1130 E.Helen St, Tucson, AZ, 85721, United States, mingfeng@eller.arizona.edu This talk discusses the role and value of diversity in predicting business performance using an extremely detailed proprietary dataset from online equity crowdfunding. Results have implications for investors, entrepreneurs, and policy makers. 2 - The Impact of Store Opening on Customers’ Spending in Online Retailing Platform with A Hybrid Model of Reselling and Marketplace Ling Xue, Georgia State University, Department of Computer Information Systems, J. Mack Robinson College of Business, Atlanta, GA, 30302, United States, lxue5@gsu.edu, Peijian Song, Yanran Liu, Arun Rai In this study, we examine how the offline channel of the retailer influence the sales in the hybrid online channel with both the reselling section and the marketplace section. We use the opening of offline stores as a research setting to draw causal inferences. Our findings show how the offline channel generates differential impacts on the reselling section and the marketplace section of the online channel. Our study extends the existing understanding of online-offline interaction by bringing the marketplace model into consideration. 3 - Market Segmentation and Software Security: Pricing Patching Rights Duy Dao, University of Calgary, Calgary, AB, Canada, Duy.Dao@rady.ucsd.edu The patching approach to security in the software industry has been less effective than desired. A critical issue is that the ability for a consumer to choose whether security updates are applied lacks the incentive structure to induce better security-related decisions. In this paper, we establish how vendors can differentiate their products based on the provision of patching rights and how optimally pricing this right can segment the market in a manner that leads to both greater security for consumers and greater profitability for vendors. TA51

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