2016 INFORMS Annual Meeting Program

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INFORMS Nashville – 2016
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3 - Robust Transmission Planning Under Uncertain Generation
Investment And Retirement
Lizhi Wang, Iowa State University,
Bokan Chen
We present a new robust optimization model for transmission planning. This
model considers the addition of new renewable generation and the retirement of
existing generation capacity as sources of uncertainty, anticipates for each
transmission plan the worst scenario that would result in the highest investment
and operational cost, and identifies the most robust transmission plan with the
least costly worst case scenario. We demonstrate this approach with a case study
on the WECC 240-bus test system. Results will be illustrated with novel
quantification and visualization techniques.
4 - Data-driven Stochastic Unit Commitment For Integrating
Wind Generation
Chaoyue Zhao, Oklahoma State University,
In this talk, we propose a data-driven risk-averse stochastic unit commitment
model, where risk aversion stems from the worst-case probability distribution of
the renewable energy generation amount, and develop the corresponding
solution methods to solve the problem. Given a set of historical data, our
proposed approach constructs a confidence set for the distributions of the
uncertain parameters using statistical inference and solves the corresponding risk-
averse stochastic unit commitment problem. The computational results
numerically show how the risk-averse stochastic unit commitment problem
converges to the risk-neutral one, which indicates the value of data.
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Music Row 4- Omni
Analytical Models in E-business
Sponsored: E-Business
Sponsored Session
Chair: Yonghua Ji, University of Alberta, School of Business,
Edmonton, AB, T6G2R6, Canada,
1 - Announcing Privacy Threshold In Mobile Platform Competition
Zixuan Meng, University of Washington,
Smartphones are increasingly necessary for everyday life and consumers find it
important to prevent from privacy violations through Apps on mobiles. Android
and iOS, two of the most popular App platforms, are different in App privacy
levels. IOS, known to have a higher privacy level, chooses to make privacy
requirement public. Using vertical differentiation model, we find that when
market is fully covered, publicizing privacy threshold motivates both firms
lowering privacy level. This helps both firms generate more profit by hurting
consumers. This finding contradicts with common belief and calls for awareness
of potential harm from a policy that seems protective to consumers.
2 - How Much To Open, How Fast To Fix And Develop? Impacts Of
Openness On Software Development And Maintenance
Rakesh R Mallipeddi, Texas A&M University, College Station, TX,
77840, United States,
Emre Muzaffer Demirezen, Ram Gopal, Subodha Kumar
Proprietary software vendors have recently begun to emulate the open source
software community in opening up part of their software. We analyze the impact
of software openness in the context of resource allocation between bug fixing and
new version development, an important operations issue that many software
vendors face in light of prevalence of software defects. We formulate optimal
control models to examine the effects of making the software code open (fully or
partially) on the overall quality of the software and the development efforts of its
next version.
3 - Crowdfunding Mechanism Design And Its Effect On Fundraising
Aravinda Garimella, University of Washington,
Our study examines how entrepreneurs’ choices of Funding Type and Rewards
Types jointly impact the outcome of crowdfunding campaigns. We begin by
providing a conceptual framework that distinguishes between Mechanism and
Non-Mechanism aspects of campaign design. We then focus on two mechanisms
at play in Reward-Based Crowdfunding platforms. First, entrepreneurs may opt
for one of two Funding Types, Fixed Funding or Flexible Funding. Second,
entrepreneurs are also heterogeneous in the mix of Reward Types they choose to
offer to their backers. Using a rich data set of daily funding information on
Indiegogo, we study how these two mechanisms influence funding outcomes and
trajectories.
4 - Dynamics And Efficiency Of a Mobile Platform
Ruibing Wang, University of Science and Technology of China,
Hefei, China, Qinglong Gou, Yonghua Ji
A mobile platform serves as a multi-sided market which connects users, app
developers and advertisers. Different from the traditional multi-sided market, the
cross-side network effects between different groups are different. It makes the
decision process on advertising investments of platform owners and app
developers more challenging. We develop a dynamic model, capturing these
impacts, to offer suggestions on their advertisement strategy. We found that
platform owners should offer app developers incentives according to the size of
their user base or their advertising expenditure. We also Investigate the impact of
different kinds of incentive on the system efficiency.
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Music Row 5- Omni
Behavioral Research on Inventory and Pricing
Sponsored: Behavioral Operations Management
Sponsored Session
Chair: Elena Katok, University of Texas at Dallas, Richardson, TX,
United States,
1 - Negotiating Transshipments Prices For Improving Supply
Chain Coordination
Sebastian Villa, University of Los Andes, Bogotá, Colombia,
, Elena Katok
When retailers face stochastic demand, it is often beneficial for retailers in the
same industry to buy or sell product from one another in order to better match
supply and demand. This exchange of product at the retailer level is called
transshipment. Appropriate ordering decisions and transshipment prices can
improve supply chain coordination. We create some experiments to evaluate how
subjects decisions deviate (or not) from the theoretical channel-coordinating
benchmarks. Initially, we automate the ordering decision, to evaluate how the
transshipment prices are negotiated, and then we evaluate retailers’ decisions
when they do both, negotiate transshipment prices and place orders.
2 - Newsvendors’ Decisions Revisited
Tobias Stangl, University of Cologne,
Elena Katok, Ulrich Thonemann
In our study we revisit most of the proposed explanations for the pull-to-center
effect in newsvendor experiments. We conducted an experimental study with 620
students from a core course in operations management. Our newsvendor study
comprises two frames and seven critical ratios. In addition we collected data on
anchoring, cognitive reflection, overconfidence, and risk aversion. In our data we
find no support for assuming that context matters nor for assuming (different)
psychological costs of leftovers and stock-outs. We find a risk and gender effect
and additional evidence that low cognitive reflection and over-precision increases
the pull-to-center effect.
3 - Procurement In The Presence Of Supply Disruptions
Elena Katok, University of Texas at Dallas,
We consider a setting with a supply disruption that may occur after a contract is
negotiated. If the disruption can be corrected at a cost, and it is more efficient for
the supplier, rather than for the buyer, to correct the disruption, a contract that
does not include the disruption contingency leads to inefficient outcome. We
examine the effect of communication and the ability to renegotiate in the
laboratory. The main finding is that informal commitments improve efficiency a
great deal.
4 - Profit-sharing Or Target-with-bonus? A Behavioral Investigation
Kay-Yut Chen, University of Texas at Arlington, UTA,
Arlington, TX, 1, United States,
Shan Li, Ying Rong
We experimentally study the profit sharing and the target-with-bonus mechanism
in a setting with a principal setting the parameters of the mechanism, and an
agent choosing his effort level (moral hazard) and managing a newsvendor store.
We find the presence of fairness concerns under both mechanism, and the
principal yields higher profit under target-with-bonus mechanism. A behavioral
model is constructed to explain the findings.
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