Seminars

Revenue Management in Face of Choice Heterogeneity

Information Systems and Operations Management

Speaker: Ali Aouad
PhD candidate at MIT

16 December 2016 - in Room Bernard Ramanantsoa (Building V) - From 10:30 am to 12:00 pm


Modern-day applications in e-commerce and brick-and-mortar retailing involve complex customer choice behaviors. Modeling this choice heterogeneity strikes a delicate balance between explaining large-scale data and prescribing efficient operational policies. At the strategic level, for the assortment selection problem, we propose a "consider-then-choose" modeling approach, borne out by the marketing literature. Experiments on a large purchase panel dataset demonstrate the strong predictive power of our models against common benchmarks. We develop a dynamic programming framework and show that many empirically vetted assumptions on how customers consider and then choose lead to tractable optimization models. Our algorithm dominates state-of-the-art commercial solvers in several regimes. Further, at the operational level, we study joint assortment and inventory management where customers show a dynamic substitution behavior. We derive the first provably good policies by revealing hidden submodular-like structure. Our approach is an order of magnitude faster than existing heuristics and increases revenue by 6% to 12% in experiments.
This work is based on several papers jointly with Profs. Vivek Farias, Retsef Levi and Danny Segev.

Internet adoption and knowledge diffusion

Information Systems and Operations Management

Speaker: Chris Forman
Professor from Cornell University (the IS department editor of Management Science)

5 December 2016 - Room Bernard Ramanantsoa (Building V) - From 10:30 am to 12:00 pm


What is the capacity of ICT to reduce the (geographical and technological) localization of knowledge? In this paper, we analyze the impact of Internet adoption within US firms on knowledge spillovers. More specifically, we investigate the impact of basic Internet access on the likelihood that patents invented at a given R&D establishment cite patents invented elsewhere within the same firm. Our findings suggest that adoption of Internet significantly fosters cross-location citations in a significant way, and that these effects are proportional to the technologically proximity of the establishments. This positive effect holds even when excluding collaborative patents or controlling for earlier collaborations, and suggests that Internet adoption has helped in reducing the spatial localization of knowledge but not in the ability to draw from new knowledge sources (i.e., across different technological areas).

Grocery Access, Market Structure and Food Waste

Information Systems and Operations Management

Speaker: Elena Belavina
Assistant Professor of Operations Management , University of Chicago

14 October 2016 - Room Bernard Ramanantsoa (Building V) - From 10:30 am to 12:00 pm


This paper studies how access to grocery stores, and the extent and nature of competition in the grocery retail market influences food waste. Access to grocery, or how dense is the network of retail stores in a neighborhood, varies extensively as a result of zoning laws and other city government initiatives. Similarly, some markets are dominated by one chain, while others have a high degree of competition with a lot of independent grocery stores. And finally consumers in some markets are more price-sensitive, while in others the degree of product availability or service level is the key competitive variable. We build a multi-echelon arborescent supply chain model that includes heterogeneous customers each making optimal perishable inventory replenishment timing and level decisions in the face of demand uncertainty, as the lowest tiers. Competing grocery stores are the next tier, their demand arises as the superposition of the stochastic order processes of customers, and they themselves manage store inventories. We use these model to compute food waste and its dependence on store density and market structure.

My analysis reveals that, independent of the market structure, denser grocery store networks result in higher food waste at the store level, but lower consumer food waste, in contrast with the conventional wisdom that higher level of price competition would lead to higher consumer food waste due to resulting lower price of groceries. The conventional logic does not take into account the reduction in food waste due to increased convenience of grocery shopping. Overall, denser grocery store networks have lower food waste as consumer-side waste is substantially higher than waste at the store level. Further, keeping store density fixed, when price is main competitive dimension, market structures with low degree of competition (a single dominant chain) are more environmentally friendly than one with many individual retailers. On the other hand, when the main competitive dimension is service level, a higher degree of competition is preferred. That is, even without changing grocery store density by instilling the “right” competitive structure city governments can influence food waste levels.

"Your Action is Needed" : The effect of Website-Initiated Participation on User Contributions to Content Website

Information Systems and Operations Management

Speaker: Gal OESTREICHER-SINGER
Coller School of Management , Tel Aviv University

29 September 2016 - Room Bernard Ramanantsoa (Building V) - From 3:00 am to 5:00 am


Abstract
The success of contemporary content websites relies on users' active participation and contribution in the form of both social participation and payments. Recent research on website strategy and sustainability has found a link between users' social participation and users' willingness to pay for content-related services. However, website owners still find it challenging to elicit participation and payment behavior.
While previous research focused only on implicit encouragement to participate, we present website-initiated participation: the use of "Calls to Action" by the website that requires the user to perform participatory actions in order to consume content. We study the relation between website-initiated participation and users' willingness to contribute both effort and monetary funds. This approach is motivated by studies outside the context of online communities that suggest a link between short-term exogenously-initiated engagement and the resultant higher economic evaluation of the experience. We present a series of web experiments in a website called VideoBook that provides high-quality video content. While watching videos, users are presented with various prompts issued at different points in time, and their site behavior before and after exposure to these prompts is recorded.
Our first study shows that users who are given Calls to Action donate more money to the website compared with users who are not exposed to such prompts. We also show that even one prompt is enough to increase users' likelihood of voluntarily engaging with the website and to increase the number of contributions. The prompts do not affect users' enjoyment or willingness to continue using the website. Our second study, motivated by research on incremental engagement, shows that the sequence of participatory activities is also crucial; when the tasks that users are prompted to engage are presented in increasing order of effort level, users tend to donate and participate more than when tasks are not ordered. We extend our results by presenting a heterogeneity analysis that shows connection between the number of videos watched by the user and its susceptibility to website-initiated participation.

(this is joint work with Lior Zalmanson).

First Ranked First To Serve: Strategic Agents in a Service Contest

Information Systems and Operations Management

Speaker: Konstantinos I. Stouras
PhD Candidate , INSEAD

13 May 2016 - HEC Paris - Jouy en Josas - Building V - Room Bernard Ramanantsoa - From 10:30 am to 2:30 pm


Motivated by two-sided marketplaces and work-from-home call centers which crowdsource demand to a pool of freelance agents, we model a service provider whose agents endogenously determine their participation and effort level. To motivate agents, the marketplace ranks agents in a prespecified number of priority classes based on their relative performance. Agents' idle time is not compensated and higher performers are utilized (and hence are paid) more. We study which priority class structure creates the best incentives for agents' participation and effort, and we show that the optimal design of such a “service contest” is often coarse, namely, it contains only a few priority classes. Discarding available information on agents' relative rankings, or, deploying coarser priority classes, can paradoxically provide higher incentives for agents' participation and for marketplace performance.


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