2015 Informs Annual Meeting

WB52

INFORMS Philadelphia – 2015

4 - Behavioral Foundations and Antecedent Conditions of Service Slowdowns (and Speedups)

minimization problem to an equivalent convex one, and preserves some desired structural properties such as convexity and L-natural-convexity. Three applications are discussed. 2 - Some Specially Structured Assemble-to-order Systems Paul Zipkin, Duke University, 100 Fuqua Drive, Durham, NC, 27708, United States of America, paul.zipkin@duke.edu Assemble-to-order systems are important in practice but challenging computationally. This paper combines some notions from combinatorial optimization, namely polymatroids and discrete convexity, to ease the computational burden significantly, for certain specially structured models. We point out that polymatroids have a concrete, intuitive interpretation in this context. 3 - On A Stochastic Program for Inventory Control in Assemble-to-order M Systems Qiong Wang, University of Illinois at Urbana-Champaign, 104 South Mathews Ave., Urbana, IL, United States of America, qwang04@illinois.edu, Martin I Reiman, Mustafa Dogru We consider a two-stage stochastic program (SP) for developing inventory policies for Assemble-to-Order M systems. The first stage SP prescribes a replenishment policy and the second stage SP optimizes component allocation. We show that the M system structure allows the SP to have desirable convexity properties and an explicit form of the optimal solution. We also discuss whether these convenient features can be preserved under various generalizations of the system structure. 4 - Conditions on Preservation of Supermodularity and its Applications Daniel Zhuoyu Long, Assistant Professor, The Chinese University of Hong Kong, Shatin, N.T., Hong Kong - PRC, zylong@se.cuhk.edu.hk, Xin Chen, Jin Qi The concept of supermodularity has been proved to be a useful and an important tool to derive monotone comparative statics in parametric optimization problems. One critical concern is whether the supermodularity can be preserved under dynamic programming recursions. In this paper, we provide necessary and sufficient conditions for the preservation of supermodularity in several classes of parametric optimization problems, and show how the theoretical results can be applied in some OM problems. WB50 50-Room 106A, CC New Topics in Behavioral Operations Sponsor: Manufacturing & Service Operations Management Sponsored Session Chair: Javad Nasiry, Assistant Professor, Hong Kong University of Science and Technology, ISOM, LSK Building, HKUST, Hong Kong, Hong Kong - PRC, nasiry@ust.hk 1 - The Value of Project Reviews with Reference Effects Xiaoyang Long, PhD Student, Hong Kong University of Science and Technology, Hong Kong - PRC, xlongaa@connect.ust.hk, Javad Nasiry In uncertain environments, project reviews provide an opportunity to make continue or abandon decisions in order to maximize the project’s expected payoff. However, we show that a behaviorally biased project manager may opt not to review the project and forgo the value of information provided by a review. Further, the project manager may be more likely to launch and continue the project in comparison to rationally optimal decisions. 2 - Price Competition in the Presence of Social Comparison and Demand Uncertainty Ming Hu, Associate Professor, University of Toronto, 105 St. George Street, Toronto, Canada, Ming.Hu@Rotman.Utoronto.Ca, Yun Zhou We consider a duopolistic price competition of differentiated substitutable products under demand uncertainty, in which the duopoly socially compare with each other. Conventional wisdom suggests social comparison leads to more competitive behavior. We demonstrate how opposite-directional social comparisons interact with demand variability to change competitive behavior. These insights are robust under multiplicative demand uncertainty, but they are reversed for complementary products. 3 - Optimal Stopping under Present-Biased Preferences Peiwen Yu, Assistant Professor, Fudan University, Shanghai, China, freeypw@connect.ust.hk, Qing Li, Javad Nasiry We study optimal stopping problems in which agents have present-biased preferences. Agents may be naive and unaware of the bias or sophisticated and aware. We establish the optimality of a threshold stopping policy under a set of intuitive conditions. We show that sophistication may lead to counter-intuitive decisions, but we also identify simple conditions that yield robust predictions on sophisticated agents’ behavior. We apply our theory to models of project management and healthcare.

Mirko Kremer, Professor, Frankfurt School of Finance & Management, Room B135, 60314 Frankfurt am Main, Frankfurt, Germany, M.Kremer@fs.de

The assumption that service times are independent of system load is widespread in the operations management literature, despite growing empirical and anecdotal evidence to the contrary. We present some experimental evidence on behavioral drivers and antecedent conditions of service slowdowns (and speedups) in systems that are operated by human servers and/or customers. WB51 51-Room 106B, CC Supply Chain Outsourcing Sponsor: Manufacturing & Service Operations Management Sponsored Session Chair: Morvarid Rahmani, Assistant Professor, Georgia Tech, morvarid.rahmani@scheller.gatech.edu 1 - Supply Networks for Relational Sourcing Elena Belavina, University of Chicago Booth School of Business, 5807 S Woodlawn Ave, Chicago, IL, United States of America, elena.belavina@chicagobooth.edu Socially responsible sourcing has become a necessity for many global firms and a competitive advantage for others. Sourcing strategies based on social responsibility now increasingly employ long-term commitments (relational sourcing). This study examines the role that supply network configuration plays in the efficacy of relational sourcing in ensuring socially responsible behavior across the supply network (compliance). 2 - An Economic Model of Knowledge Outsourcing Jaeseok Lee, Georgia Institute of Technology, 800 West Peachtree NW, Atlanta, GA, 30308, United States of America, Jaeseok.Lee@scheller.gatech.edu, Karthik Ramachandran, Cheryl Gaimon We introduce a game-theoretic model of knowledge outsourcing. We study how the interaction between a knowledge buyer and supplier is affected by two salient aspects of knowledge outsourcing, which distinguish it from component outsourcing: the buyer’s absorptive capacity, and the supplier’s ability to reuse prior knowledge. We also investigate how uncertainty and information asymmetry influence the equilibrium outcomes of knowledge outsourcing. 3 - Incentives in Contests with Heterogeneous Solvers Soo-Haeng Cho, Associate Professor, Carnegie Mellon University, In a crowdsourcing contest in which heterogeneous solvers make efforts to develop solutions, existing theories predict different outcomes about how solvers will change their efforts in response to increased competition (i.e., more entrants to the contest). This paper presents a unifying model that encompasses different types of heterogeneity, and offers a precise explanation about solvers’ rational behavior. Our theoretical prediction is corroborated by empirical evidence. WB52 52-Room 107A, CC Retail Management II Contributed Session Chair: Shelby Koos, University of Miami, 268, McArthur Engineering Building, Coral Gables FL 33146, United States of America, s.koos1@umiami.edu 1 - Optimal Contract Design in a Co-storing Arrangement Lama Moussawi-Haidar, Assistant Professor, American University of Beirut, P.O. Box 11-0236 Riad El Solh, Beirut, 1107, Lebanon, lm34@aub.edu.lb, Nagihan Comez-dolgan We study the optimal design of a revenue sharing agreement between two retailers with complementary products, sharing the same retail location. The landlord retailer rents outs some space to a tenant retailer. Each retailer has his/her own random sales, dependent on effort levels of both retailers. We model the problem as a double moral hazard and we show that a linear percentage rent, consisting of a sales share and a based rent, achieves the second-best effort levels. 5000 Forbes Ave, Pittsburgh, PA, 15213, United States of America, soohaeng@andrew.cmu.edu, Ersin Korpeoglu

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