Informs Annual Meeting Phoenix 2018

INFORMS Phoenix – 2018

TA12

decision to terminate a workers’ employment (involuntary attrition) and uses an optimal stopping problem process to model a workers’ decision to leave the firm (voluntary attrition). 2 - Loss Aversion in Managers’ Pricing Decision Making at a Fast Fashion Retailer Anna Saez de Tejada Cuenca, UCLA Anderson School of Management, 110 Westwood Plaza, B-501, Los Angeles, CA, 90024, United States, Felipe Caro, M. Keith Chen We analyze managers’ pricing decision making during the sales season of a fast fashion retailer. We observe empirically that, even when assisted by a DSS that recommends revenue-maximizing prices, they systematically deviate from the optimal prices, in a way that is compatible with a number of behavioral biases: loss aversion, salience of the inventory, time discounting, and status quo. We build a structural model to disentangle their degree of loss aversion from other biases, and compare loss aversion coefficients across managers and across product groups (e.g., fashion vs. basics). 3 - Ration Gaming and the Bullwhip Effect Robert Louis Bray, Kellogg School of Management, Northwestern University, 830 Hinman Ave., 2s, Evanston, IL, 60202, United States We model a single-supplier, 73-store supply chain as a dynamic discrete choice problem. We estimate the model with transaction-level data, spanning 3,251 products and 1,370 days. We find two interrelated phenomena: the bullwhip effect and ration gaming. We estimate that the latter causes the former. n TA12 North Bldg 126A Operations Management for Global Health & Development Sponsored: Manufacturing & Service Oper Mgmt Sponsored Session Chair: Prashant Yadav, PhD, Harvard Medical School, Seattle, WA 1 - Farmer Engagement with Markets in Rural Uganda Jarrod D. Goentzel, Massachusetts Institute of Technology, 77 Massachusetts Avenue, E38-650, Cambridge, MA, 02139, United States, Micaela Wiseman, Courtney Blair, Tim Russell To understand agricultural markets in Uganda, we surveyed farmers and nearby agribusinesses to explore their engagement. We purposively selected 5 districts, randomly chose 2x2km areas, identified households using satellite imagery, and randomly visited households. The survey results characterize behaviors, relationships, and conditions regarding farmer engagement with markets. Further analysis explores the barriers for farmers not connected to the market and how agribusiness help farmers engage in the market. We close with recommendations for market facilitation efforts that support supply chain actors to grow their business and address farmers’ challenges. 2 - Estimating Demand of Health Commodities at Rural Chemists in the Absence of Point-of-sale Data Sripad K. Devalkar, Indian School of Business, Ac3 L1 Room 3114, Hyderabad, 500032, India, Sarang Deo, Aditya Jain, Naireet Ghosh, Shubham Akshat Adoption of better treatment options in rural areas requires both demand and supply side interventions to increase awareness about the effectiveness of these treatment options and making these commodities accessible. Improving access to health commodities through better replenishment policies requires reliable estimates of demand for such commodities. However, existing methods of demand estimation cannot be used in rural health supply chains due to unavailability of POS data. We overcome this challenge by developing a new methodology that jointly estimates the parameters of the inventory policy of the retailer and the underlying demand distribution by using upstream replenishment data. 3 - Impact of Increased Stock Visibility and Stock Information Sharing on Vaccine Stock Outs in Karnataka India Anup Akkihal, Logistimo, Seattle, WA, United States, Prashant Yadav, Gaurav Singhal, Vinayak Kothurwar Impact Of Increased Stock Visibility And Stock Information Sharing On Vaccine Stock Outs In Karnataka India

n TA10 North Bldg 125A Joint Session MSOM/Practice Curated: Marketplace Innovation Sponsored: Manufacturing & Service Oper Mgmt Sponsored Session Chair: Fuqiang Zhang, Washington University in St. Louis, St. Louis, MO, 63130, United States 1 - Managing Ride-sharing Demand Shocks with Surge Pricing Bin Hu, UNC Chapel Hill, UNC Chapel Hill, Assistant Professor, Chapel Hill, NC, 27599, United States, Ming Hu, Han ZHU Surge pricing by ride-sharing platforms has long been accused by media of gouging riders. Instead, economic theory advocates surge pricing as a way of efficiently regulating supply and demand. We propose an alternative argument in support of surge pricing. An important, but often neglected feature is that drivers react magnitudes slower than riders to surge pricing. A short-lived surge can inform nearby drivers of unserved riders, attracting them to relocate and leading to a more efficient market outcome than maintaining less varied prices. Moreover, we find a low-then-high penetration surge may be more profitable for the platform than a more commonly-used high-then-low skimming surge. 2 - Crowdfunding or Bank Financing: Effects of Market Uncertainty and Word-of-mouth Communication Fasheng Xu, Washington University in St. Louis, Saint Louis, MO, 63130, United States, Xiaomeng Guo, Guang Xiao, Fuqiang Zhang In the fast growing rewards-based crowdfunding marketplace, startups launch projects not only to raise funding directly from the crowd to cover early stage investment, but also to expand product awareness via word-of-mouth communication. Compared to bank financing, we find that crowdfunding is always preferred by startups under weak product awareness base or poor credit rating; otherwise, crowdfunding may underperform when market uncertainty is within certain medium range. Our model provides a framework to rationalize the advantage of crowdfunding by demonstrating three underlying benefits: capital- raising, awareness-expanding, and demand-validating. 3 - Social Learning and the Design of New Experience Goods Yiangos Papanastasiou, University of California at Berkeley, Pnina Feldman, Ella Segev This work focuses on the implications of social learning from product reviews for a monopolist firm’s choice of product design. Our main finding is that, in the presence of social learning, the firm’s design choice results in a product whose expected quality is lower either in the absolute sense, or relative to the product’s price. 4 - Information Sharing on Retail Platforms Zekun Liu, Washington University in St. Louis, One Brookings Drive, St. Louis, MO, 63130, United States, Fuqiang Zhang, Dennis Zhang We study how the retail platform should share demand information with its sellers under revenue sharing contract. With no fairness concern, the platform always truthfully shares market or private information to a subgroup of the sellers. With fairness concern, the platform has to offer symmetric information for each seller. When the number of sellers is relatively big, the platform has the incentive to share noised private signals to sellers. Furthermore, when the sellers are heterogeneous in their market power, we show that the platform prefers to share information truthfully with sellers who have relatively low market power. n TA11 North Bldg 125B MSOM iFORM Sessiona Sponsored: Manufacturing & Service Oper Mgmt/iFORM Sponsored Session Chair: Robert Louis Bray, Kellogg School of Management, Northwestern University, Evanston, IL, 60202, United States Co-Chair: Juan Camilo Serpa, McGill University, Montreal, QC, H2L 3S2, Canada 1 - A Structural Estimation Approach to Agent Attrition Seyed Morteza Emadi, University of North Carolina at Chapel Hill, 300 Kenan Center Drive, Chapel Hill, NC, 27599, United States, Bradley R. Staats Worker attrition is a costly and operationally disruptive challenge throughout the world. Although large bodies of research have documented drivers of attrition and its operational consequences, managers still lack an integrated approach to understanding attrition and making decisions to address it on a forward-going basis. To fill this need, we build a structural model that captures both the firm’s

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