Informs Annual Meeting 2017

WA37

INFORMS Houston – 2017

3 - The Adoption Strategy of Electric Vehicle Li Wei, Student, Huazhong University of Science and Technology, Wuhan, 430074, China, liweianthea@gmail.com This paper applies game theory to study how EV manufacturer makes location and pricing decision when facing the competition of the gasoline car. We characterize a two-stage game model describing EV manufacturers’ operation decisions and consumers’ consumption decision, after solving the model we derive the optimal number of charging stations and the optimal charging price, and then analyze how city structure, customers’ traveling demand and EV range affect the results. 352B Models of Co-production and Co-creation Sponsored: Service Science Sponsored Session Chair: Paul R. Messinger, University of Alberta, Edmonton, AB, T6G 2R6, Canada, paul.messinger@ualberta.ca 1 - Competing with Co-created Products Amit Pazgal, Rice University, Jones Graduate School of WA37 Management, 6100 Main Street (MS.- 531), Houston, TX, 77005, United States, pazgal@rice.edu, Dinah Vernik-Cohen, Niladri Syam We analyze the strategic choices of two competing downstream firms who simultaneously decide whether or not to co-create with an upstream supplier. Within this framework we incorporate, endogenous pricing and effort choice by both the supplier and the competing firms. Firms contemplating co-creation with a supplier are faced with a trade-off. They can benefit from the supplier’s innovation efforts and therefore obtain a better product than they themselves can produce. However, they may face the adverse effect of their own innovation efforts spilling over to their rivals via the supplier who would sell the co-created products to all firms. Our model captures this tension and offers several insights. 2 - Strategic Role of Self-service Co-production Paul R.Messinger, University of Alberta, Faculty of Business, 3-20e Faculty Of Business Bldg, Edmonton, AB, T6G 2R6, Canada, paul.messinger@ualberta.ca, Kursad Asdemir, Bora Kolfal This paper examines the strategic implications for duopoly firms offering a self- service option in a stylized game-theoretic model. Queuing behavior is modelled to equilibrate so that customers sort themselves into groups that choose the self- service or full service options according to what is best for them. The model also endogenously determines the boundary of the firm (which activities are conducted by the firm and which are done by customers outside the firm). By focusing on the offering of self-service as a strategic variable, this paper differs from much of past managerial research on self-service that focuses on the productivity gains to market participants. 3 - Co-creation: the Consumer Side with Bandwagon Effects James D. Hess, Bauer Professor of Marketing Science, University of Houston, University of Houston, Houston, TX, 77204-6021, United States, jhess@uh.edu, Niladri Syam, Rambod Dargahi We study the behavior of consumers who co-produce goods and services with a firm and ask how bandwagon effects (social preferences) on the consumers affect their co-production choices. Consumers have to make three related decisions: (1) buy the standard or customized product? (2) What is the optimal design of the customized product and how to split the design task between themselves and the firm ? (3) How should they take into account the preferences of other customers? Our main result finds that an increase in the bandwagon intensity can either increase or decrease the mass of co-producers. We have experimentally tested this main result. 352D Networks and Graphs Contributed Session Chair: Nima Safaei, Bank of Nova Scotia, North York, ON, Canada, nima.safaei@scotiabank.com 1 - Interactive Community in Temporal Networks Jongeun Kim, University of Florida, 2901 SW. 13th St, Apt 212, Gainesville, FL, 32608, United States, kje0510@ufl.edu, Vladimir Boginski One of the important research area in network analysis is detecting a significant cluster. Most proposed works have been done in static networks. However, many real-world networks including person-to-person communication networks, brain signal networks, dynamic sensor networks and infrastructural networks have a potential to gain better knowledge by applying temporal network frame which WA39

considers changing the connections through time. We will define the condition of an interactive community in a temporal network and design both exact approaches and rapid heuristics to find it. 2 - Derisking in Crossborder Payment Banking Networks Nima Safaei, Associate Director, Network Analytics, Bank of Nova Scotia, Unit 1205, 72 Esther Shiner Blvd, North York, ON, M2K.0C4, Canada, nima.safaei@scotiabank.com, Ivan Sergienko De-risking is defined as “the phenomenon of financial institutions terminating or restricting business relationships with clients to avoid, rather than manage, risk in line with the risk-based approach”. This phenomenon raises profitability pressure due to increased competition and more regulations to mitigate the risk of money- laundry, terrorist financing, credit loss, etc. We propose a methodology to classify the banks in a cross-border network in terms of risks and benefits. Our analysis is supported by SWIFT customer payments data from an international bank. 352E Advances in Transportation Planning and Operations Sponsored: TSL, Urban Transportation Sponsored Session Chair: Xia Yang, SUNY Polytechnic Institute, 100 Seymour Road, Troy, NY, 13502, United States, yangx2@sunyit.edu 1 - Bus Schedule Optimization for Multimodal Emergency Evacuation Xia Yang, SUNY Polytechnic Institute, Utica, NY, 3502, United States, yangx2@sunyit.edu, Sean He This study proposes a mixed integer linear programming model that optimizes the schedule of buses in a multimodal transportation system to minimize the total evacuation time for heavily populated urban areas. The proposed model factors evacuation traffic dynamics, evacuation priority, the cooperative behavior of evacuees, and the capacities of facilities in the multimodal transportation system. Numerical experiments are conducted to investigate the proposed model and its solution algorithm. 2 - Real-time Estimation of Value of Time Distribution using Measurements on Managed Lane Networks Venktesh Pandey, University of Texas, Austin, TX, United States, venktesh@utexas.edu, Stephen Boyles The value of time (VOT) distribution among drivers is critical for understanding the lane choice behavior of drivers and setting optimal tolls for travelers in a managed lane network. We propose a formulation for simultaneous estimation of traffic state and percentage of travelers in each VOT class in the population by measuring the flows before and after each diverge-point on managed lane networks. The performance of the estimation algorithm is tested on managed lane networks with multiple entrances and exits. The issues of non-observability of the states are also highlighted. 3 - Arterial Signal Coordination with Uneven Double Cycling and Secondary Bandwidth Hongmin Tracy Zhou, Texas A&M Transportation Institute, 701 North Post Oak Rd, Suite 430, Houston, TX, 77024, United States, h-zhou@tti.tamu.edu, Gene Hawkins, Luca Quadrifoglio Arterial signal coordination between large intersections often requires a long cycle length which may causes excessive delay at intersections of low volume cross streets. This paper describes two optimization models developed to enable uneven double cycling (UDC) at minor intersections where a background cycle has two sub-cycles of different lengths to address this issue. The first model maximizes variable bandwidths and minimizes through delay on cross streets at UDC intersections. The second model also maximizes secondary bandwidths for arterials with two or more consecutive UDC intersections. Simulation results show great potentials of the UDC control scheme. 4 - Credit Risk of Real Option in Private-Public-Partnership Based Road Infrastructure Project Evaluation under Market Realism Choungryeol Lee, Purdue University, West Lafayette, IN, United States, lee1210@purdue.edu, Srinivas Peeta, Yong Hoon Kim We propose an extended real option valuation (ROV) framework to price real options for PPP-based road projects subject to credit risk concerning the private firm’s bankruptcy. This framework integrates the existing ROV frameworks and measurement of credit risk in terms of the expected loss from a public perspective. Results of numerical experiments show that impacts of credit risk on option value are significant and suggest that public access to proprietary information of the private firm is needed to accurately evaluate PPP-based road projects leveraged with real options. WA40

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