Informs Annual Meeting 2017

WB23

INFORMS Houston – 2017

WB21

social interactions with the host. In this paper, we study the effects of social interactions on rental pricing in sharing economy. To investigate the effects, we analyze a theory model and also test our theory with an empirical study using a dataset of Airbnb transactions and listing attributes. 2 - Designing Rewards-based Crowdfunding Campaigns for Strategic Contributors

342C Supply Chain, Shipping and Transportation Contributed Session Chair: Sangpil Ko, Michigan Technological University, Houghton, MI, United States, sangpilk@mtu.edu 1 - Impact of Free-flow Operation on Drayage Productivity Samaneh Shiri, University of South Carolina, 1076 Pavilion Tower Circle, Columbia, SC, 29201-2361, United States, shiri@email.sc.edu, Nathan Huynh In the last decades, due to increase in international trade volume, the world container terminal throughput has increased enormously. As a result, terminals are under pressure to develop strategies to accommodate demands and increase the efficiency of their operation. The Port of Los Angeles has launched a container free-flow operation to reduce truck turn time, free up terminal space and optimize container moves. This study assesses the impact of free-flow operation on drayage productivity using the previously developed drayage scheduling model by the authors. To efficiently solve the model a reactive tabu search algorithm combined with an insertion heuristic is used. 2 - Improving Supply Chain Production Reliability through Risk-averse Interdiction Mehdi Zolghadrasli, Stevens Institute of Technology, Hoboken, NJ, United States, mzolghad@stevens.edu, Ricardo A.Collado We consider the problem of quality assurance on industrial assembly lines where checking all productions is impossible due to sampling cost and physical limitations. Given the total sampling budget, we determine the optimum sampling rate on each production line by solving a risk-averse multi-stage stochastic optimization problem on the production network. By leveraging the theory of dynamic coherent risk measures, we obtain a method that minimizes the probability of defective items reaching the consumers. We show that our method performs well even under erroneous beliefs/data about the reliability of each machine and process. 3 - A Multi-product Production/distribution System Design Problem with Direct Shipments and Lateral Transshipments Jianing Zhi, Penn State-Erie, The Behrend College, Black School of Business, Burke Center 228, 5101 Jordan Road, Erie, PA, 16563, United States, jzz5296@psu.edu, Burcu B.Keskin We investigate a multi-product, three-stage production/distribution system design problem with the direct shipment and lateral transshipment capabilities. Our goal is to find the most efficient network design to minimize the total fixed facility and transportation costs. Specifically, we locate p capacitated distribution centers in the second stage from a set of candidate locations. We propose two solution algorithms based on simulated annealing and GRASP heuristics. Both long-term and short-term memory lists are applied to maintain an efficient local search, combined with a custom greedy solver that can effectively evaluate the quality of a solution candidate. 4 - Optimal Supply Network for Biomass Co-firing Power Plant Considering Advanced Woody Biomass Feedstock Logistics Sangpil Ko, Michigan Technological University, 1400 Townsend Dr., Houghton, MI, 49931, United States, sangpilk@mtu.edu, Pasi T. Lautala One of the most implementable technologies to generate electricity with less environmental emissions is co-firing biomass in existing coal-fired power plant. One of the challenges for co-firing is procurement cost for biomass feedstock and as part of it, the cost of biomass transportation. Our study considers the advanced woody biomass feedstock logistics that allows for a local biomass processing depot where the biomass is torrefied and densified prior to transport to the plant. One research finding revealed large capacity power plants with a small inventory of forest residue nearby gain more benefits from such arrangements under the advanced biomass feedstock logistics scenario. 342D Online Business Models Sponsored: Revenue Management & Pricing Sponsored Session Chair: Simone Marinesi, Wharton, Philadelphia, PA, 75003, United States, marinesi@wharton.upenn.edu 1 - Social Pricing in Sharing Economy: Theory and Empirical Evidence from Airbnb Yao Cui, Cornell University, Ithaca, NY, United States, yao.cui@cornell.edu, Ming Hu An important difference between the lodging sharing economy platforms (e.g., Airbnb) and the traditional hotels is that in sharing economy, the guest may have WB22

Soudipta Chakraborty, Duke University, 100 Fuqua Drive, Durham, NC, 27708, United States, sc390@duke.edu, Robert Swinney

We study a model of rewards crowdfunding with the all or nothing funding mechanism. The creator of a crowdfunding campaign sets a target funding level and the campaign is successful only if the funding it receives meets this target. The contributors incur a transaction cost while pledging to a campaign. As a result, they behave strategically and decide whether to pledge before the target is met or to incur a waiting cost and delay their pledge until the campaign succeeds. We study how a creator who encounters such strategic behavior should design her crowdfunding campaign. 3 - Reward-based Crowdfunding Campaigns: Informational Value and Access to Venture Capital Rachel Rong Chen, University of California-Davis, 3208 Gallagher Hall, One Shields Avenue, Davis, CA, 95616, United States, rachen@ucdavis.edu, Esther Gal-Or, Paolo Roma Consider an entrepreneur who designs a reward-based crowdfunding campaign when the campaign provides a demand signal for the product and subsequent Venture Capital (VC) is needed. Her design entails choosing both the campaign goal, and the pledge level that entitles backers to the product if it becomes available. While failure to reach the goal sends a negative signal likely to eliminate the entrepreneur’s access to VC funding, succeeding does not guarantee subsequent VC funding either. We examine how the informativeness of the campaign and considerations related to gaining access to VC funding affect the choice of campaign instruments, as well as the decision of whether to run a campaign. 4 - The Dark Side of Crowdfunding Simone Marinesi, Wharton, 201 S.25th Street, Apt 621, Philadelphia, PA, 75003, United States, marinesi@wharton.upenn.edu, Elena Belavina, Gerry Tsoukalas We explore the pros and cons of reward-based crowdfunding by comparing it with traditional bank funding, accounting for two characteristics of crowdfunding: the unobservability of products’ true performance (performance opacity) and risk of entrepreneurs’ misbehavior (moral hazard). We find that both features hampers crowdfunding profits, and characterize how their interaction and its implications for profit and welfare. We then propose an improved crowdfunding design that remedies the negative consequences of such features. 342E Revenue Optimization in Online Markets Sponsored: Revenue Management & Pricing Sponsored Session Chair: Vahideh Manshadi, Yale University, New Haven, CT, 06511, Saed Alizamir, Yale University, 339 Willow St., New Haven, CT, 06511, United States, saed.alizamir@yale.edu, Ningyuan Chen, Sang Kim, Vahideh Manshadi Many products/services exhibit network externality: a customer who consumes the good increases the utility of consumption for her neighbors. To promote diffusion of the good in the network, the firm can initially charge a lower price. The price is raised to a higher level when enough consumers join the pool of adopters. We find that it is optimal for the firm to stop the promotion when the total externality of the existing users reaches a threshold, which depends on the adjacency matrix. We investigate how the structure of the network affects the firm’s optimal strategy and profit, and show that more heterogeneity among customers increases the firm’s revenue; a balanced network yields the lowest revenue. 2 - Online Bipartite Matching in Two-sided Markets Van-Anh Truong, Columbia University, 500 West 120th Street, 338 Mudd Hall, New York, NY, 10027, United States, vt2196@columbia.edu, Xinshang Wang We study a class of bipartite matching problems in which demand and supply units of various types arrive randomly and sequentially over time. Supply units can wait for a fixed amount of time, but demand units must be matched irrevocably upon arrival to existing supply units if any, or rejected. The above problem is motivated by two-sided crowdsourcing markets in which demand and supply are matched by an intermediary firm, which earns a revenue on each transaction. We provide the first efficient algorithms with worst-case performance guarantees for this class of problems. United States, vahideh.manshadi@yale.edu 1 - Promotion Planning of Network Goods WB23

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