Informs 2015

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INFORMS Philadelphia – 2015
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3 - Selling Information in Oligopolies
Alireza Tahbaz-Salehi, Columbia Business School, 3022
Broadway, Uris Hall 418, New York, NY, 10023, United States of
America, , Kostas Bimpikis, Davide Crapis
This paper studies the strategic interaction between a monopolist seller of an
information product and a set of potential buyers that compete in a downstream
market. We argue that the nature of competition among the buyers largely
determines the price and accuracy of the product that the monopolist decides to
sell.
4 - Analysis of a Simple Cost Allocation Rule for Joint Replenishment
Xuan Wang, New York University, 44 West 4th Street,
Suite 8-154, New York, NY, 10012, United States of America,
Jiawei Zhang, Simai He, Jay Sethuraman
We consider the joint replenishment game in which the major setup cost is split
equally among the retailers who place an order together. Each retailer pays his
own holding and minor setup cost. Under this allocation rule each retailer
determines his replenishment policy to minimize his own cost anticipating the
other retailers’ strategy. We show that a payoff dominant Nash equilibrium exists
and quantify the efficiency loss of the non cooperative outcome relative to the
social optimum.
MC44
44-Room 103B, CC
Empirical and Data-Driven Research in Revenue
Management and Pricing
Sponsor: Revenue Management and Pricing
Sponsored Session
Chair: Jun Li, Assistant Professor, Ross School of Business, University of
Michigan, 701 Tappan St, Ann Arbor, 48103, United States of America,
Co-Chair: Serguei Netessine, Professor, INSEAD, 1 Ayer Rajah Avenue,
Singapore, 138676, Singapore,
1 - Interpreting “3 Seats Left”: An Empirical Analysis of Airline
Inventory Announcements
Kate Ashley, UC Berkeley Haas School of Business, 2220
Piedmont Ave, Berkeley, CA, 94720, United States of America,
, Pnina Feldman, Jun Li
Does inventory announcement affect the timing of customer purchases? We
estimate the impact of inventory announcement policy on purchases of airline
tickets. We analyze the extent to which customers treat messages from the firm as
cheap talk or credible information, and the extent to which firms use
announcements strategically to influence demand.
2 - Contextual Treatment Selection and its Application to
Pricing Optimization
Yan Zhao, MIT, 77 Mass Ave, 1-245, Cambridge, MA,
United States of America,
With the rapid growth of eCommerce, the wealth of data makes it possible to
exploit the heterogeneity among customer pricing sensitivity and maximize
revenue. We develop a general framework for the customized pricing problem
and propose a tree-based algorithm, which shows superior performance on both
simulated data and real transaction data. Under mild regularity conditions we
prove the upper bound of the difference of expected revenue between a
simplified version of our algorithm and an oracle.
3 - Dynamic Pricing and Inventory Management:
An Empirical Perspective
Yan Shang, PhD Student, Duke University, 845 Ivy Meadow Ln,
Apt. 3D, Durham, NC, 27707, United States of America,
, Yiting Deng, Jing-Sheng Song
This paper applies structural modeling to study joint inventory and pricing
management of perishable product, using fresh vegetable data from the largest
state-owned supermarket chain in China. Demand of fresh vegetables depends
not only on price but also freshness, and complementarity exists between items.
We use a multiple continuous model to incorporate these features. Based on
demand estimates, optimal prices are solved, which achieves significant profit
improvement and waste reduction.
MC45
45-Room 103C, CC
From Store to Omni-Channel:
Choice-Driven Pricing Models
Sponsor: Revenue Management and Pricing
Sponsored Session
Chair: Stefanus Jasin, Stephen M. Ross School of Business,
University of Michigan, Ann Arbor, MI, United States of America,
Co-Chair: Joline Uichanco, Asst. Professor, University of Michigan,
Ross School of Business, 701 Tappan Ave, Ann Arbor, MI, 48109,
United States of America,
1 - Drivers of Demand for Consumer Packaged Goods that Have
Wide Variations in Price and Perceived Quality
Olga Pak, Student, University of South Carolina, 1014 Greene
Street, Columbia, SC, 29208, United States of America,
, Mark Ferguson
In joint work with Oracle Retail, we identify the drivers of demand for consumer
packaged goods that have wide variations in price and perceived quality. We
investigate the problem with the use of hierarchical models on retail transaction
data across multiple market and store locations to analyze the influence of prices,
promotions and individual store effects.
2 - Integrated Lifecycle Price and Inventory Optimization in an
Omni-channel Environment
Pavithra Harsha, IBM, 1101 Kitchawan Road, Room 34-225,
Yorktown Heights, NY, 10598, United States of America,
, Shivaram Subramanian, Joline Uichanco,
Markus Ettl
In an omni-channel environment, inventory is shared across channels through
multiple fulfillment options (e.g. ship-from-store). Without accounting for this,
existing pricing solutions take steep markdowns in stores. We present a tractable
optimization model to determine optimal lifecycle channel prices, inventory
allocations and partitions across channels that maximizes the total chain level
profit. Our experiments show a 6-12% improvement in profit over multiple
categories of a large retailer.
3 - Data-driven Learning in Dynamic Pricing using
Adaptive Optimization
Phebe Vayanos, Assistant Professor, University of Southern
California, 3551 Trousdale Pkwy, University Park, Los Angeles,
CA, 90089, United States of America,
Dimitris Bertsimas
We consider the pricing problem faced by a retailer endowed with a finite
inventory of a product with unknown demand curve offered to price-sensitive
customers. We formulate the seller’s problem as an adaptive optimization problem
with decision-dependent uncertainty set and propose a tractable solution
approach.
MC46
46-Room 104A, CC
Pricing and Strategic Behavior in Queueing Systems
Sponsor: Manufacturing & Service Oper Mgmt/Service Operations
Sponsored Session
Chair: Philipp Afeche, Associate Professor, University of Toronto,
105 St. George Street, Toronto, ON, M5S3E6, Canada,
1 - Pricing, Diagnosis and Overtreatment in Expert Services
Senthil Veeraraghavan, Associate Professor, The Wharton School,
3730 Walnut St, Philadelphia, PA, 19104, United States of
America,
In many services, consumers must rely on advice of experts to identify the type of
treatment/service they need. The information asymmetry between service
provider and the consumers creates inefficiencies in the form of cheating and
over-treatment. We show that congestion and waiting costs act as natural “fraud
costs” which mitigate cheating, inducing honesty and increasing social welfare.
We show the informational value of pricing in inducing either honesty or
overtreatment.
MC44