2015 Informs Annual Meeting

MB41

INFORMS Philadelphia – 2015

MB39 39-Room 100, CC Contracts, Quality, and Pricing for OM-Marketing Cluster: Operations/Marketing Interface Invited Session Chair: Haresh Gurnani, Professor, Wake Forest University, School of Business and Center for Retail, Winston Salem, NC, 27106, United States of America, gurnanih@wfu.edu Co-Chair: Shouqiang Wang, Assistant Professor, Clemson University, 131D Sirrine Hall, Clemson, SC, 29672, United States of America, shouqiw@clemson.edu 1 - Signaling Trustworthiness using a Buy-back Contract Shouqiang Wang, Assistant Professor, Clemson University, 131D Sirrine Hall, Clemson, SC, 29672, United States of America, shouqiw@clemson.edu, Haresh Gurnani Not all suppliers are trustworthy: retailers face risk dealing with suppliers who may not honor their buy-back contracts. We examine whether an upstream manufacturer is able to signal her trustworthiness via the buy-back contract terms (i.e., the wholesale and return prices) offered to a retailer; and if so, how such a buy-back contract needs to be structured. 2 - Optimal Design of Sales Service Channel Huaqing Wang, Asst Professor, University of Wisconsin Stout, 262 JHTW, 410 10th Ave E, Menomonie, United States of America, wangh@uwstout.edu, Haresh Gurnani, Yu Tang Customers buying certain products may lack functional knowledge and need help after purchase. The retailer (or manufacturer) can invest in pre-sales effort to educate customers; We study the service channel design problem with different structures and show that the retailer would even be worse off in a cost-sharing contract. 3 - Quality Provision with Heterogeneous Consumer Reservation Utilities Rachel Chen, Associate Professor, University of California, Davis, CA, United States of America, rachen@ucdavis.edu, Lian Qi, Leon Chu This paper examines a firm’s quality and price decisions when consumers differ in both their willingness-to-pay for quality and in their reservation utility for the basic product. We find that the optimal quality may increase with a negative shift in consumers’ reservation utilities. When the firm offers a vertically differentiated product line, the concern for cannibalization may distort the quality upwards under heterogeneous reservation utilities. 4 - Dynamic Matching in a Two-sided Market Yun Zhou, University of Toronto, 105 St. George Street, Toronto, Canada, Yun.Zhou13@Rotman.Utoronto.Ca, Ming Hu A two-sided market often shares a common structure that engages three parties: the supply side, the demand side and an intermediate firm facing intertemporal uncertainty on both supply/demand sides. We propose a general framework of dynamically matching supply with demand of heterogenous types (with horizontally or vertically differentiated types as special cases) by the intermediary firm and explore the optimal and heuristic matching policies.

2 - When Does a Stakeholder Attack Become a Reputational Crisis? Stakeholder Capital and the Micro-Foundations of Corporate Reputation

Sinziana Dorobantu, New York University, New York, NY, sdoroban@stern.nyu.edu, Witold J. Henisz, Lite Nartey

We provide and demonstrate empirical support for theoretical arguments on the micro-foundations of corporate reputation thereby explaining which stakeholder attacks are more likely to become organizational reputational crises that destroy financial value. We evaluate stakeholder reactions to attacks targeting 19 gold mining firms between 2000 and 2008 as reported in over 20,000 media articles, and link these reactions to the daily abnormal returns of these publicly traded companies. 3 - Micro-foundations of Corporate Social Responsibility and Irresponsibility Olga Hawn, UNC Kenan-Flagler Business School, Chapel Hill, NC, United States of America, Olga_Hawn@kenan-flagler.unc.edu, Catherine Shea This study examines how two fundamental dimensions of social perceptionówarmth and competenceó mediate and moderate the effects of corporate social responsibility (CSR) and irresponsibility (CSI) on specific outcomes. The results of our experimental studies suggest that firms from high- warmth countries receive lower benefits for CSR and pay higher penalties for CSI than firms from low-warmth countries; furthermore, this effect reverses when combined with high competence. 4 - The Economic Case for CSR: Competitive Advantage of For-profit Firms in the Market for Social Goods Jiao Luo, University of Minnesota, 321-19th Ave S, Suite 3-365, Minneapolis, MN, 55455, United States of America, luoj@umn.edu, Aseem Kaul We develop a formal model of CSR, examining competition between a for-profit firm and a nonprofit in the supply of social goods. We argue that firms can benefit both stakeholders and shareholders only if their CSR efforts are sufficiently differentiated from those of non-profits. Thus, our paper makes an economic case for CSR, specifying conditions under which CSR is Pareto optimal, and highlighting the potentially divergent effects of CSR activities for shareholders and stakeholders. MB41 41-Room 102A, CC New Development in Health Care Operations Sponsor: Manufacturing & Service Oper Mgmt/Healthcare Operations Sponsored Session Chair: Lauren Lu, Associate Professor, University of North Carolina at Chapel Hill, Kenan-Flagler Business School, Chapel Hill, NC, 27599, United States of America, lauren_lu@unc.edu Co-Chair: Feng Lu, Assistant Professor, Purdue University, 403 W State St, West Lafayette, IN, 47907, United States of America, lu428@purdue.edu 1 - Do Mandatory Overtime Laws Improve Quality? Staffing and Operational Flexibility of Nursing Homes Lauren Lu, Associate Professor, University of North Carolina at Chapel Hill, Kenan-Flagler Business School, Chapel Hill, NC, 27599, United States of America, lauren_lu@unc.edu, Feng Lu During the 2000s, over a dozen U.S. states passed laws that prohibit health care employers from mandating overtime for nurses. Using a nationwide panel dataset from 2004 to 2012, we find that these mandatory overtime laws reduce the service quality of nursing homes. This outcome can be explained by two undesirable changes in the staffing hours of registered nurses: decreased hours of permanent nurses and increased hours of contract nurses per resident day. 2 - The Hidden Costs of Hospitals’ “Custom Contracting” with Group Purchasing Organizations Avi Seidmann, Simon Business School, University of Rochester, Rochester, NY, 14627, United States of America, avi.seidmann@simon.rochester.edu, Vera Tilson, Rajib Saha Most hospitals in the US join Group Purchasing Organizations (GPOs) to lower procurement costs by demand aggregation. Some larger hospitals further negotiate private deals through custom contracts directly with the GPO vendors. We present a game-theoretic model where the decisions by the hospitals and the vendor are endogenous, and we prove that – counter to the industry’s expectations - the resulting savings for the hospitals are always lower when the GPOs go for custom contracting.

MB40 40- Room 101, CC Nonmarket Strategy Sponsor: Organization Science Sponsored Session

Chair: Jiao Luo, University of Minnesota, 321-19th Ave S, Suite 3-365, Minneapolis, MN, 55455, United States of America, luoj@umn.edu 1 - Radical Repertoires: The Incidence and Impact of Corporate-Sponsored Social Activism Mary-hunter McDonnell, The Wharton School, University of Pennsylvania, Philadelphia, PA, marymcd@wharton.upenn.edu This article explores situations in which firms respond to contentious social activist challenges by openly sponsoring social movements. I empirically explore the emergence and implications of a new strategic phenomenon in non-market strategy – the corporate-sponsored boycott – in which firms voluntarily cooperate with social movement organizations to protest contested social practices of other companies or entities at higher orders of market organization, such as industries and states.

185