2016 INFORMS Annual Meeting Program

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INFORMS Nashville – 2016
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5 - Are All Data Thieves Created Equal? An Empirical Analysis Of
Customer Response To Identity Theft
John N Angelis, Elizabethtown College, 100 Farmhouse Lane,
Mountville, PA, 17554, United States, ,
Joseph C Miller
The popular press tends to report on data hacking and identity theft instances as if
all such crimes are relatively equal in business impact and public perception. To
challenge this assertion, we exposed independent study panels to four unique
recent real-world instances of identity theft. Analysis reveals that the extent to
which thieves, the business, and customers are blamed for their role in the crime
is highly dependent on both parameters of the localization of the breached firm
and the uniqueness of the identity of the customers affected, as well as perceived
cleverness of said thieves. In certain cases, the public will assign equivalent blame
to both affected customers and the hacked business.
WB27
201A-MCC
Information and Consumer Behavior in Supply
Chain Management
Sponsored: Manufacturing & Service Oper Mgmt
Sponsored Session
Chair: Hyoduk Shin, UC-San Diego, La Jolla, CA, United States,
1 - Loss Aversion And The Uniform Pricing Puzzle For Media And
Entertainment Products
Javad Nasiry, Hong Kong University of Science and Technology-
HKUST,
The uniform pricing puzzle for vertically differentiated media and entertainment
products (movies, books, music, mobile apps, etc.) is that a firm with market
power sells high- and low-quality products at the same price even though quality
is perfectly observable and price adjustments are not costly. We resolve this puzzle
by assuming that consumers have an uncertain taste for quality and accounting
for consumer loss aversion in monetary and consumption utilities. The novelty of
our approach is that the so-called reference transactionis endogenously set as part
of a “personal equilibrium” and is based only on past purchases of same-quality
products.
2 - Generalized Reverse Auctions: Efficiency And Credibility Under
Information Asymmetry
Hedayat Alibeiki, McGill University, 1001 Sherbrooke Street West,
Desautels Faculty of Management, Montreal, QC, H3A 1G5,
Canada, Mehmet Gumus
Non-price factors such as product quality and reliability can be even more
important than bidding prices for the buyers when selecting the winner of an e-
Auction. In practice, buyers usually evaluate and assign an originally-private
“quality score” to each supplier that determines the relative position of the
supplier toward its competitors. In this paper, we study whether or not and in
what fashion the buyer can credibly share suppliers’ quality scores with them.
3 - Incentives For Sharing Cyber-security Breaches Among
Competing Firms
Noam Shamir, Tel Aviv University,
Presidential Executive Order 13691, which was issued by President Obama,
characterizes cyber threats as a “national emergency”. This executive order calls
for increased cooperation and information sharing on such threats. A main
concern regarding this initiative is related to the companies’ incentives to pool
cyber threat information. Although policy makers claim that the companies will
benefit from a shared database of threat assessment information, each company
must find it beneficial to share its cyber-threat information. In this work we
evaluate the incentives of companies that operate in a competitive environment
to share such information.
WB28
201B-MCC
Product Recalls
Sponsored: Manufacturing & Service Oper Mgmt
Sponsored Session
Chair: Harish Krishnan, University of British Columbia, Vancouver, BC,
Canada,
Co-Chair: Juan Camilo Serpa, Assistant Professor, McGill University,
1001 Rue Sherbrooke O, Montreal, QC, H3A 1G5, Canada,
1 - Cover-up Of Safety Hazards: Delays In Voluntary Product Recalls
Woonam Hwang, Assistant Professor, HEC Paris, Paris, France,
, Soo-Haeng Cho, Victor DeMiguel
Product safety regulators often have to rely on manufacturers’ voluntary
disclosure of information when investigating product defects, because
manufacturers have better information about safety hazards through internal
testing and warranty claims. However, manufacturers may not always truthfully
report all safety hazard information. For instance, several automakers including
GM and Toyota have been recently accused of deliberately hiding safety hazards
from regulators and delaying product recalls, putting the public in danger. In this
paper, we investigate how regulators can induce manufacturers to truthfully
report any safety issues in a timely manner.
2 - Board Composition And Firm Responsiveness To
Product-harm Crises
George Ball, Indiana University, Kelley School of Business,
Kaitlin Wowak, Corinne Post
Even though firms are subjected to the same regulatory, consumer protection,
and market pressures, they vary considerably in how swiftly they issue recalls in
product-harm situations. In this study, we explore how firm responsiveness to
product recalls is impacted by several Board of Director characteristics, including
female board representation and board independence. We study these questions
using over 5,000 recalls from a 12-year panel covering all recalls in industries
regulated by the U.S. Food and Drug Administration (e.g., Food, Medical Devices,
and Pharmaceuticals).
3 - Why Do Automakers Initiate Recalls? A Structural
Econometric Study
Ahmet Colak, Northwestern University, Evanston, IL, United
States, , Robert Louis Bray
We model a manufacturer’s and regulator’s joint recall decisions as a dynamic
discrete choice game. We estimate our model with 14,124 U.S. auto recalls and
976,062 defect reports over the period 1994—2015. We find that (i) automakers
initiate recalls mainly to avoid field failure costs, and (ii) automakers don’t
preempt the regulator’s interventions in 86% of our sample.
WB29
202A-MCC
Managing Responsibility in Supply Chains
Sponsored: Manufacturing & Service Oper Mgmt,
Sustainable Operations
Sponsored Session
Chair: Jing-Sheng Jeannette Song, Duke University, Durham, NC,
United States,
1 - Cooperative Approaches To Managing Social Responsibility In
Supply Chains: Joint Auditing And Information Sharing
Soo-Haeng Cho, Carnegie Mellon University,
Xin Fang
This paper investigates two cooperative approaches of firms’ managing social
responsibility violations of suppliers: auditing a common supplier jointly or
sharing independent audit results with other firms. We develop a model based on
a cooperative game in partition function form, and show that: (1) competing
firms have incentives to cooperate when the negative externality of one firm’s
social responsibility violation on other firms is high; and (2) neither cooperative
approach necessarily improves social responsibility, especially when one firm can
benefit from others’ social responsibility violations (i.e., the positive externality is
high).
WB27