The Reference Effect of Delay Announcements: A Field Experiment

We explore whether customers are loss averse in time and how delay information may impact such reference-dependent behavior using observational and field experiment data from two call centers of an Israeli bank. We consider settings with no announcements and announcements of different accuracy levels. We face two key challenges: (1) we do not observe the reference points customers use in our data, as any other field studies, and (2) it is difficult to separate the reference-dependent behavior from the potential nonlinear waiting cost of customers. To address these challenges, we develop a dynamic decision model with consumer learning, through which we infer the reference point each customer used during any given call. The reference points may be different across different customers and evolve across different calls of the same customers. We also exclude the alternative explanation by showing that our main reference-dependent models better explain the observed customer abandonment than models where customers have nonlinear waiting cost. Our results indicate that customers are loss averse regardless of the availability or accuracy of the announcements when their waiting time is relatively long (≥ 90s). Although delay announcements do not alter the nature that customers are loss averse, accurate announcements may affect customers’ belief about the offered waiting time and thus, impact the reference points. Through counterfactual studies, we demonstrate that providing delay announcements improves the call center performance given the loss aversion behavior observed in our data. Interestingly, as customers become more loss averse, the value of providing delay announcements decreases. This paper was accepted by Terry Taylor, operations management.

Comparing the CO2 emission by kilogram transported in normal flight and in a clear air turbulence area

Air transport contributes with 2% of global emission to greenhouse effect. This situation aggravates the occurrence of meteorological phenomenon of Clear Air Turbulence (CAT). When an aircraft flies over a CAT area they increase the fuel consumption to adequate the speed and lift. Consuming more fuel aggravates the greenhouse effect. The objective of this paper is to quantify the emission of pollutants in the atmosphere, through the application of a conceptual and dynamic decision model for microscopic analysis of air traffic flow. The method consists of delimiting the CAT area, staggering flight parameters, and calculating CO2 emissions in normal conditions and with CAT. When there is CAT, there are two options: proceed in the same flight plan or make a route deviation to a lower altitude. The comparison between the conditions of flights with the presence of CAT, infers that changes to a lower altitude during the flights is viable, because there is a reduction in fuel consumption and hence in CO2 emissions.

Dynamic Strategies on Firm Production and Platform Advertisement in Crowdfunding considering Investor’s Perception

Taking investor’s perception into account, the optimal decisions about the product quality and platform advertisement are investigated in a dynamic model in the context of crowdfunding. Researches in the literature, however, usually set investor’s perception as a fixed value and rarely consider the important phenomenon that the online information has some influences on investor’s perception. Considering the effects of information about product quality and platform advertisement on the investor’s perception, a dynamic decision model is proposed. Firstly, investment desire and reference price of the investor are introduced in two dynamic settings to describe investor’s perception. Then, the optimal decisions about the product quality and platform advertisement are formulated under two circumstances: the sponsor and the platform make decisions independently and they cooperate as a system. Finally, the influences of reference price and cost-sharing ratio on the optimal results are compared and the data simulation experiment verifies the necessity of the study. Some new insights can be drawn for the operations management of the firm in crowdfunding as follows: (i) it is more profitable for the firm to cooperate with the platform when investors pay more attention to their reference price; (ii) it is optimal for the firm to share a larger proportion of platform cost when the profit-sharing ratio is low.