Essays in operations, information and technology
- This dissertation is devoted to the field of Operations, Information and Technology and comprises three chapters. The first chapter (joint work with Professor Hau L. Lee) studies how to induce responsibility performance, i.e., compliance to environmental, social and ethical standards in modern supply chains. There is a natural tendency to utilize quality improvement solutions as a starting point in dealing with responsibility issues such as toxic emissions, air pollution and child labor. However, it is unclear whether responsibility and quality issues can be treated the same way. In fact, if it is not the case, then current corporate strategies may further undermine responsibility performance. In this chapter we delineate responsibility and quality, and show that some methods that work well for one may not necessarily work for the other. Namely, we look at how choice of sourcing relationship by a multinational buyer affects responsible investments by a small supplier. We demonstrate that the interaction of relationship commitment and pricing policy produces non-trivial effects. In particular, if the pricing policy is fixed, then relationships with higher commitment lead to higher investments by suppliers -- both on responsibility and quality dimensions. However, if there is a cost competition among suppliers, and pricing policy is set optimally, then, surprisingly, the relationship with the lowest commitment leads to the highest responsibility levels and highest profits, yet lowest quality levels. We show that responsibility and quality improvement processes are structurally different and one should utilize quality improvement tools for improving responsibility with caution. The results are derived in closed form and are linked to prevailing corporate strategies. The second chapter (joint work with Professor Haim Mendelson), is an inquiry into the internal structure of an online marketplace for offline professional services. We develop a structural model of the marketplace and estimate it using data from the 2006-2014 period. Rather than view the marketplace as a "black box" that matches demand and supply, in this paper we take a market microstructure approach and explicitly model the matching and operating rules of the marketplace to determine the laws of marketplace evolution and the effectiveness of the matching process. The marketplace has two types of customers: consumers and suppliers. We carefully separate the liquidity of the marketplace, which focuses on the probability of conversion for existing customers, from the adoption process, which focuses on the acquisition of new customers of each type. Adoption reflects both the dissemination of information and prospective customers' expectations of conversion or value creation. We find that geographic location plays an important role in both conversion and adoption. We also find a nonlinear critical mass effect that depends on the pricing policy of the marketplace. We illustrate how a short-term revenue-optimizing strategy for the marketplace may hurt its long-term sustainability. The third chapter (joint work with Professor Haim Mendelson) addresses the pricing problem of a matching intermediary. Motivated by the analysis of online marketplace pricing in Chapter 2, the problem applies to intermediaries such as peer-to-peer matching platforms, online and offline real estate agencies, job placement agencies and contractors who engage in sequential search on behalf of a client and use partially observable attributes to find a match. Under exponential distributional assumptions, we develop the optimal pricing policies in closed form. We compare the perfect and imperfect information cases and consider alternative models of demand elasticity. In general, the optimal pricing policy combines a minimum fee and a successful match fee that may depend on the observable attributes. We find that under certain conditions, charging the same fee per successful match for candidates with different observable attributes is optimal.
|Type of resource
|electronic; electronic resource; remote
|1 online resource.
|Stanford University, Graduate School of Business.
|Lee, Hau Leung
|Lee, Hau Leung
|Statement of responsibility
|Submitted to the Graduate School of Business.
|Thesis (Ph.D.)--Stanford University, 2016.
- © 2016 by Pavel Izhutov
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