Informs Annual Meeting 2017

WC12

INFORMS Houston – 2017

4 - Service Systems with Dependent Service Times and Patience Times Chenguang Wu, Northwestern University, Evanston, IL, United States, chenguangwu2013@u.northwestern.edu, Achal Bassamboo, Ohad Perry Motivated by recent empirical evidence, we consider a large service system in which the patience time of each customer depends on his service requirement. We show even moderate dependence has significant impacts on system performance, so considering the patience and service times to be independent when they are in fact dependent can lead to large errors. Since the dependence renders exact analysis intractable, we employ a stationary fluid approximation that is based on the entire joint distribution of the service and patience times. We propose a novel framework, incorporating fluid model with bivariate dependence orders, to study the impact of the dependence on key performance measures and capacity decisions. 330B Auctions/Mechanism Design Contributed Session Chair: Xi Shan, University of Texas at Dallas, Richardson, TX, United States, xxs130630@utdallas.edu 1 - Multi-dimensional Auctions, Public Contests and the Winner’s Curse Bernardo F. Quiroga, Assistant Professor of Operations Management, Clemson University, College of Business & Behavioral Science, Department of Management, 100 Sirrine Hall, Clemson, SC, 29634, United States, bfquirog@gmail.com We study the effect of multi-dimensional auction bidding complexity in the presence of common values, where suppliers don’t learn their true production cost until after the auction has taken place. The traditional presence of the Winner’s Curse, where a winning bid yields a negative profit to the supplier under sealed-bid-first-price auctions, can be allowed to a partial off-set of the “curse” when bidders are contracted on score levels as opposed to price-quality combinations, and are allowed to ex-post adjustments that are score invariant. 2 - Truth and Regret in Online Scheduling Rad Niazadeh, Postdoctoral Researcher, Stanford University, Palo Alto, CA, United States, rad@cs.cornell.edu, Shuchi Chawla, Nikhil Devanur, Janrdhan Kulkarni We consider mechanism design for clouds, where a service provider has multiple units of a resource available over time. Selfish clients submit their jobs. The provider’s goal is to implement a truthful online mechanism for scheduling jobs so as to maximize the social welfare. Recent work shows that under stochastic setting, there is a single-parameter family of mechanisms that achieves near- optimal social welfare. We show that given any such family of near-optimal online mechanisms, there exists an online mechanism that performs nearly as well as the best of this family. Our mechanism is truthful if the family members are truthful and prompt, and achieves optimal (within constant factors) regret. 3 - Make Your Elusory Supplier Manage Disruption Risk as You Wish Xi Shan, University of Texas at Dallas, Richardson, TX, United States, xxs130630@utdallas.edu, Suresh P.Sethi, Chenglin Zhang We consider the problem where one retailer and one supplier face supply chain disruption risk. The supplier has private information of his initial reliability and is able to improve that reliability with a hidden action, which we call an effort. Through the way of mechanism design, we find the contract menu to reveal the supplier’s true type and the supplier’s effort level that most benefits the retailer. We also show that it is never optimal to let the suppliers be perfect reliable. 332A Innovative Business Models in Services Sponsored: Manufacturing & Service Oper Mgmt, Service Operations Sponsored Session Chair: Serguei Netessine, University of Pennsylvania, Wharton School, Philadelphia, PA, 138676, United States, netessin@wharton.upenn.edu 1 - Impact of Tabletop Technology on Restaurant Performance Fangyun Tan, Southern Methodist University, 6212 Bishop Blvd, Dallas, TX, 75275, United States, ttan@cox.smu.edu, Serguei Netessine We analyze a large data set of transactions in a casual restaurant chain to understand the effect of implementing a tabletop technology on service performance (measured in sales and meal duration). We find the technology WC10 WC11

directly increases sales and significant reduces the meal duration. These effects are further moderated by customer-oriented, waiter-oriented and restaurant-oriented factors, respectively. We provide insights on how to manage technology in restaurant operations. 2 - Nudging Flexibility of Workforce: Empirical Evidence from Online Cleaning Services Platform Ekaterina Astashkina, INSEAD, Boulevard de Constance, Fontainebleau, 77305, France, ekaterina.astashkina@insead.edu, Ruslan Momot, Marat Salikhov This study focuses on platforms that facilitate matching of heterogeneous customers (tasks) with heterogeneous contractors. Centralized platforms (e.g. Uber) rigidly assign contractors to customers, while decentralized platforms (e.g. TaskRabbit) let contractors choose tasks they prefer. We compose the right personalized assortment of tasks that hybrid platforms should offer to its contractors. We build an econometric model of contractors’ choice, which we estimate on a proprietary dataset of the cleaning platform (similar to HomeJoy). We then formulate platform’s online optimization problem of assortment personalization and identify policies that achieve near-optimal performance. 3 - Platforms and Search Efficiency: Does Size Matter? Serguei Netessine, University of Pennsylvania, Philadelphia, PA, 138676, United States, netessin@wharton.upenn.edu, Jun Li Economic theory predicts that thicker/larger market increases matching efficiency. Using a natural experiment with a peer-to-peer housing rental platform we find that larger markets can be less efficient. 332B Strategy/Strategic Planning Contributed Session Chair: Cristina Ruiz Martín, INSISOC, Valladolid, Spain, cruiz@eii.uva.es 1 - The Impact of Common Lenders to Both Sides of the Deal on the Acquisition Premium and the Acquirer’s Market Valuation JaSeung Koo, Associate Professor, Kobe International University, 9-1-6 Koyocho-naka, Higashinada-ku, Kobe, 6580032, Japan, koo.academic@gmail.com This study investigates cases where both the acquirer and the target firms in M&As use a common lender. Specifically, the study examines the impact of the common lender and the lender’s relationships on acquisition premiums and the acquirer’s cumulative abnormal returns. The hypotheses are that: 1) a common lender will be negatively associated with the acquisition premium, and 2) with the acquirer’s negative abnormal returns; 3) the strength of the relationship and the firms’ dependency will result in the acquirer’s positive abnormal returns, and 4) higher acquisition premiums. Using regression analyses on M&As in Japan between 1995 and 2012, three out of the four hypotheses were supported. 2 - The Customer-centric Logic of Strategic Firm Behavior Lalit Manral, Professor, College of Business, University of Central Oklahoma, 100 North University Drive, Thatcher Hall # 224, Edmond, OK, 73034, United States, lmanral@uco.edu We invoke a customer-centric logic to explain the heterogeneity in firms’ demand-side operating expenses. That a variety of such expenses generate future benefits is widely accepted by scholars and practitioners alike. Yet, conceptual and methodological issues preclude a comprehensive understanding of the outcomes of such idiosyncratic expenses in terms of their asset value and thereby contribution to overall firm value. 3 - Flexibility Analysis on a Supply Chain Contract using Markov Process Model This research focuses on the quantity flexibility contract encompassing the uncertainty of customers’ demands. We propose a Markov chain process for flexible coordinated contract design based on the stochastic demands from the view of a car manufacturer. The objective is to develop the optimal nominal order quantity and variation rate as to minimize the car manufacturer’s total cost while hedging against the uncertainty of the demand for raw materials. The necessary stability condition for the inventory level is examined. Simulations are carried out to verify the optimal strategy and to evaluate the relationship of the expected total cost with the variation rate or the nominal quantity ordered. WC12 Zhe Yuan, CentraleSupélec, Laboratoire Genie Industriel, CentraleSupélec, Chatenay-Malabry, 92290, France, zhe.yuan@centralesupelec.fr, Chengbin Chu

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