2016 INFORMS Annual Meeting Program

379 / 561

INFORMS Nashville – 2016
379
WA47
209C-MCC
New Models for Pricing and Assortment Optimization
Sponsored: Revenue Management & Pricing
Sponsored Session
Chair: Adam Nabil Elmachtoub, Columbia University, 500 W 120th St.,
New York, NY, 10027, United States,
1 - Assortment Optimization And Pricing Under A Nonparametric Tree
Choice Model
Jake Feldman, U Washington,
We consider assortment and pricing problems under a nonparametric ranking-
based choice model. Under this nonparametric choice model, each customer class
is distinguished by a unique ranking of the available products and an arrival
probability. Given the arrival of a customer from a particular customer class, this
customer will purchase the highest ranking offered product in her respective
ranking list. First, we study assortment problems, where the goal is to find a set of
products to offer so as to maximize the expected revenue from each customer.
Second, we study the joint assortment and pricing problem, where the goal is to
simultaneously select the set of products to offer as well as their prices.
2 - Revenue Management By Strategic Customer Selection
Roger D Lederman, IBM, , Vineet Goyal,
Adam Elmachtoub
We describe a framework for managing product transitions, including the role
that sales targeting can have in shaping customer decisions, managing inventory,
and increasing revenue. We provide algorithms that select customers dynamically,
each with their own choice model, in order to maximize revenue from a limited
supply of inventory. We propose constant factor approximations when
assortments may be chosen dynamically, and for a constrained setting where the
set of offered products can only decrease over time.
3 - The Price Of Opacity
Michael Hamilton, Columbia,
In this work, we study the value of selling opaque products, i.e., products where
some features are hidden from the customer until after purchase. Opaque selling
has seen use in airline and hotel contexts as well as by online retailing companies
such as on Amazon and Threadless. Opaque selling allows for price discrimination
between customers with strong or weak preferences among products. We study
the impact of this discrimination and compare the revenue garnered against
traditional selling strategies. We theoretically show that the revenue increase
from opaque selling, which we call “The price of opacity”, can be considerable in
a number of contexts that we explore.
WA48
210-MCC
Interdisciplinary Business Analytics
Invited: Social Media Analytics
Invited Session
Chair: Mingfei Li, Bentley University, Waltham, MA, 02452,
United States,
Co-Chair: David Oury, Bentley University, 175 Forest Street, Waltham,
MA, 02451, United States,
1 - Role Of Collaborative Consumption Factors: A Cross-national
Case Of Airbnb
Funda Sarican, Bentley University,
With the rise of social platforms consumers recreated value by sharing resources.
As a result, there has been an increase in collaborative consumption. To
contribute to a better understanding of this phenomenon I focused on the peer-
to-peer travel accommodation service Airbnb. The value of my research lies in
identifying meaningful factors; product, social, cultural, and economic that have
been studied in relation to the price or economy in previous literature.
2 - Health Analytics On The Quality And Efficiency Of Clinical
Practice On Several Major Cancers
Chao Wang, Bentley University,
Cancer treatment has been a hot topic for healthcare domain for quite a long
time. Efficiency and quality of the cancer treatment has been accessed from the
medical point of view for past decades. However, for this study, HCUP state level
inpatient data would be used to evaluate the changes of the quality and efficiency
of major cancers’ treatment in hospital care.
3 - Socio-economic Perceptions In Emerging Markets
Fernanda Maciel, Bentley University, Waltham, MA, United States,
In recent years, citizens in emerging economies are reporting higher levels of
satisfaction with their living conditions and demonstrating high optimism about
future perspectives compared to people in advanced economies in self-reported
well-being surveys. This paper investigates the convergence of the socio-economic
perceptions in emerging markets over time, tracking statistical clustering and
movement of these countries using self-organizing maps (SOMs).
4 - Diversification Of Risk Management Strategies
Olga Biedova, Bentley University,
Diversification of risk management strategies allows to achieve a well-balanced
risk-return profile, which surpasses the profile of an approach of simple asset
diversification. We present the results of numerical simulations of two
conceptually different risk management techniques: a dynamically risk-managed
fund and a guarantee structure linked to capital markets, which can be often seen
in indexed Variable Annuity or Fixed Indexed Annuity. We show how these
techniques would have worked in the past and compare their performance to a
more traditional balanced portfolio with 60% equity and 40% bond without risk
management.
WA49
211-MCC
Strategic Behavior, Competition, and Coordination
under Uncertainty
Sponsored: Revenue Management & Pricing
Sponsored Session
Chair: Sila Cetinkaya, Southern Methodist University,
3145 Dyer street, Dallas, TX, 75205, United States,
Co-Chair: Olga Bountali, Southern Methodist University,
3145 Dyer street, Dallas, TX, 75205, United States,
1 - The Impact Of Batch Services On Customers’ Equilibrium Actions
And On Social Welfare
Olga Bountali, Southern Methodist University,
, Antonis Economou
We consider a single-server batch service queue and investigate the equilibrium
behavior of customers when they strategically decide whether to join the system
or not, driven by maximizing their own revenue. Usually congestion forms a
discouraging factor for joining, as it is associated with long waiting. In batch-
service systems, however, it induces both positive and negative externalities to
customers’ decisions. This leads to an intricate mixture of Avoid The Crowd and
Follow The Crowd behavior. Consequently, it is not clear whether it becomes
socially beneficial to incite customers to join or not. We shed light on these topics
and investigate ways to regulate the queue.
2 - Price And Lead-time Competition With Customer Choice
Philipp Afèche, Rotman School of Management, University of
Toronto, Toronto, ON, Canada,
We consider the price/lead-time design problem of capacity-constrained providers
that compete for heterogeneous price- and time-sensitive customers with private
information on their preferences. We model the problem as a queueing game and
discuss how the equilibrium properties depend on the capacity and the demand
characteristics.
3 - The Impact Of Inspection Cost On Equilibrium, Revenue And
Social Welfare In A Single Server Queue
Ricky Roet-Green, Simon Business School, University of
Rochester, CS 3-345, Rochester, NY, 14627, United States,
, Refael Hassin
Classical models of customer decision making in unobservable queues assume it is
too costly to acquire queue length information. However, various services now
make this kind of information accessible to customers at a reasonable cost. In our
model customers choose among three options: join the queue, balk, or inspect the
queue length at a cost before deciding whether or not to join. We map all possible
input parameter sets into three scenarios. Each scenario is characterized by a
different impact of inspection cost on both equilibrium and revenue maximization
queue disclosure policy: fully observable, fully unobservable, or observable by
demand (when inspection cost is at an intermediate level).
WA49