Latest Seminars

Food Delivery Service and Restaurant: Friend or Foe?
Dr Jianfu Wang, Jeff, The City University of Hong Kong

With food delivery services, customers can hire delivery workers to pick up food on their behalf. To investigate the long-term impact of food delivery services on the restaurant industry, we model a restaurant serving food to customers as a stylized single-server queue with two streams of customers. One stream consists of tech-savvy customers who have access to a food delivery service platform. The other stream consists of traditional customers who are not able to use a food delivery service and only walk in by themselves. We study a Stackelberg game, in which the restaurant first sets the food price; the food delivery platform then sets the delivery fee; and, last, rational customers decide whether to walk in, balk, or use a food delivery service if they have access to one. We show that the food delivery platform does not necessarily increase demand for the restaurant but may just change the composition of customers, as the segment of tech-savvy customers grows. Hence, paying the platform for bringing in customers may hurt the restaurant's profitability. We demonstrate that a one-way revenue-sharing contract with a price ceiling or a two-way revenue-sharing contract can coordinate the system and create a win-win. Furthermore, under conditions of no coordination between the restaurant and the platform, we show, somewhat surprisingly, that more customers having access to a food delivery service may hurt the platform itself and the society, when the food delivery service is sufficiently convenient and the pool of delivery workers is large enough. This is because the restaurant can become a delivery-only kitchen and raise its food price by focusing on food-delivery customers only, leaving little surplus to the platform. This implies that limiting the number of delivery workers can provide a simple yet effective means for the platform to improve its own profit while benefiting the social welfare.

Date 19.03.2021
Time 10:30 - 11:45 am
Venue Zoom ID: 936 7156 0391 (password 696939)

Healthcare across Boundaries: Urban-Rural Differences in the Financial and Healthcare Consequences of Telehealth Adoption
Prof. Gordon BURTCH, The University of Minnesota

Date 17.03.2021
Time 9:00 am - 10:30 am (Hong Kong Time)
Venue Zoom

Targeting Pre-Roll Ads using Video Analytics
Prof. Gene Moo LEE, UBC Sauder School of Business, University of British Columbia

Date 17.02.2021
Time 10:00 am - 11:30 am (Hong Kong Time)
Venue Zoom

Learning from Crowdsourced Multi-Labeling – A Variational Bayesian Approach
Prof. Junming YIN, University of Arizona

Date 02.02.2021
Time 11:00 am - 12:15 pm (Hong Kong Time)
Venue Zoom

Longitudinal Google Trends: Data Creation and Applications
Dr Taeyong Park

Google search indices can be useful for measuring time-varying cross-regional public interests for which survey data are extremely rare. However, there is a practical difficulty with generating longitudinal Google Trends. Google Trends provides normalized counts from zero to 100 instead of absolute counts, thereby placing its cross-sectional indices across different times on different scales. Thus, merely pooling cross- sectional data fails to create desirable longitudinal data. To resolve this problem, we develop a method for rescaling Google Trends indices to build longitudinal data. We illustrate this method with applications to the issues of employment and the coronavirus. This new tool opens the door to using Google searches merged with various kinds of time-series cross-sectional data, which has not been possible.

Date 28.01.2021
Time 2:00 - 3:00 pm
Venue Online via Zoom

Fool Me Twice, Shame on Me: Structural Balance Theory Based Deep Learning Model for Identifying False Information
Mr. Kyuhan LEE, University of Arizona

Date 28.12.2020
Time 9:00 am - 10:30 am (Hong Kong Time)
Venue Zoom

Gift Contagion in Online Groups: Evidence from WeChat Red Packets
Mr. Yuan YUAN, Massachusetts Institute of Technology

Date 09.12.2020
Time 9:00 am - 10:30 am (Hong Kong Time)
Venue Zoom

Supply Diversification under Random Yield: The Impact of Price Postponement
Dr Guang Xiao, The Hong Kong Polytechnic University

Supply diversification and price postponement are two common mechanisms for dealing with supply yield uncertainty. In this talk, we investigate the interaction between the two aforementioned strategies and provide insights on how to effectively integrate them in combating supply yield risk. Specifically, we study a firm's pricing and sourcing decisions under supply yield uncertainty, and compare them under two distinct pricing schemes to investigate the impact of price postponement: (1) ex ante pricing - the firm simultaneously makes the sales price and sourcing decisions before production takes place; (2) responsive pricing - the pricing decision is postponed until after the yield realization. We find that the effect of price postponement on the optimal sourcing decision varies. With one unreliable supplier, responsive pricing mitigates the overage and the underage risks imposed by yield uncertainty, and results in a lower [higher] optimal order quantity than that under ex ante pricing when the procurement cost is low [high]. With two unreliable suppliers, when the sole- sourced supplier's reliability is low [high], responsive pricing promotes [discourages] supply diversification; when the sole-sourced supplier's reliability is moderate, responsive pricing promotes [discourages] supply diversification when its unit procurement cost is low [high]. The composition of supply portfolio also has a fundamental impact on such strategic interaction: When the supply portfolio consists of one unreliable and one reliable supplier, diversified sourcing is never optimal under ex ante pricing, but may be optimal under responsive pricing. Finally, we conclude by comparing our results with those obtained under random capacity model and discussing several related extensions to provide additional insights in mitigating supply yield risk.

Date 04.12.2020
Time 10:30 am - 11:45 am
Venue Online via Zoom

Managing Gig Economy via Behavioral and Operational Lenses
Mr Park Sinchaisri, University of Pennsylvania

Gig economy firms benefit from labor flexibility by hiring independent workers in response to real-time demand. However, workers' flexibility in their work schedule poses a great challenge in terms of planning and committing to a service capacity. Understanding what motivates gig economy workers is thus of great importance. In collaboration with a ride-hailing platform, we study how on-demand workers make labor decisions. We are interested in both improving how to predict the behavior of gig workers and understanding how to design better incentives and policies. Using a large comprehensive dataset, we first develop an econometric model to analyze workers' labor decisions in response to incentives while accounting for their personal goals, sample selection, and endogeneity. Our careful analysis has revealed behavioral insights that can inform better incentive and regulatory design. To further capture platform competition, we leverage our proprietary spatial data and the publicly available trip records to develop and estimate a structural model of gig workers' sequential dynamic decisions in the presence of alternative work opportunities. Our simulation-assisted estimation provides insights into workers' switching behavior and potential policies to better manage the flexible workforce.

Date 25.11.2020
Time 9:00 - 10:30 pm
Venue Online via Zoom

Continuous-time Optimal Dynamic Contracts
Mr Feng Tian, University of Michigan

The talk draws from two papers in dynamic contract design. The first paper considers a basic model, in which a principal incentivizes an agent to exert effort to increase the instantaneous arrival rate of a Poisson process. The effort is costly to the agent and unobservable to the principal. Each arrival yields a constant revenue to the principal. The principal, therefore, devises a mechanism involving payments and a potential stopping time to maximize her profits.

The second paper builds on the first paper's framework and considers a more complex setting where a principal hires an agent to run a local service store. Customers request service in one of two ways: either via an online or a traditional walk-in channel. The principal does not observe the walk-ins, nor does she observe whether the agent exerts (costly) effort to increase customers' arrival rate. This creates an opportunity for the agent (i) to divert cash (that is, to underreport the number of walk-in customers and pocket respective revenues) and also (ii) to shirk (that is, not to exert effort). This leads to a novel so far unexplored double moral hazard problem. We also present dynamic contracts that maximize the principal’s profit.

In both papers, we derive the optimal contracts which have simple and intuitive structures. Further, in the second paper, we extend the model to allow the principal to either (i) monitor the agent or (ii) manipulate the relative attractiveness of the online- against the walk-in- channel (by allowing the use of dynamic price discounting). Both tools help the principal alleviate the double moral hazard problem: we derive optimal strategies for using those tools to guarantee the highest profits.

Date 24.11.2020
Time 9:00 - 10:30 pm
Venue Online via Zoom

Traceability Technology Adoption in Supply Chain Networks
Mr Philippe Blaettchen, INSEAD, Singapore

Modern traceability technologies promise to improve supply chain management by simplifying recall procedures, increasing demand visibility, or ascertaining sustainable supplier practices. Managers in the dozens of traceability initiatives developing such technologies face a difficult question: which companies should they target as early adopters to ensure that their technology is broadly employed? To answer this question, managers must consider an extended supply chain effect that is inherent to traceability technologies. Namely, the benefits obtained from traceability are conditional on technology adoption throughout a product's supply chain. This effect, together with the fact that supply chains are interlinked in complex networks, makes the problem of choosing early adopters complex and difficult to solve.  Our first step in tackling the question of selecting the smallest set of early adopters is to introduce a new model of the dynamics of traceability technology adoption in supply chain networks. Similar to extant diffusion models, our model specifies new adopters based on past adopters. Unlike other models, however, it incorporates extended supply chain effects. We show that the problem of selecting the smallest seed set is NP-hard and that no approximation to within a polylogarithmic factor can be obtained for any polynomial-time algorithm. Nevertheless, we introduce a procedure that identifies an exact solution in polynomial time under certain assumptions about the network structure. We provide evidence that our procedure is tractable for real-world supply chain networks. Our results further provide insights into the relationship between network structures and the optimal set of firms to target. In particular, they suggest that small, isolated firms may be favored over large, highly connected ones.

Date 23.11.2020
Time 9:00 - 10:30 pm
Venue Online via Zoom

Impact of Animated Banner Ads on Online Consumers: A Feature Level Analysis Using Eye Tracking
Dr. Weiyin HONG, Adjunct Associate Professor, ISOM

Date 20.11.2020
Time 3:30 pm - 5:00 pm
Venue LSK 3003 / Zoom (mixed-mode)

A New Framework for New Venture Creation
Mr Zhengli Wang, Stanford Graduate School of Business

We model the creation of a new venture with a novel drift-variance diffusion control framework in which the state of the venture is captured by a diffusion process.  The entrepreneur creating the venture chooses costly controls, which determine both the drift and the variance of the process.  When the process reaches an upper boundary, the venture succeeds and the entrepreneur receives a reward. When the process reaches a lower boundary, the venture fails.  The entrepreneur can choose between two different controls and wishes to determine the policy that maximizes the expected total reward minus total cost.  We derive closed-form expressions under which the optimal policy will be dynamic versus static.  The results reveal a subtle trade-off between the cost of the two controls, their drift and their variances.

Date 20.11.2020
Time 2:00 - 3:30 pm
Venue Online via Zoom

Structural Estimation of Intertemporal Externalities on ICU Admission Decisions
Mr Yiwen Shen, Columbia Business School

Service systems’ behavior can be affected by multiple factors. In the case of intensive care units (ICUs), which admit patients from four primary loci (the emergency department (ED), scheduled patients, planned transfers from other ICUs, and unplanned transfers), it is known that admission rates of some patients decrease as occupancy increases. It is also known that, for at least some conditions, ICU admission is not just a function of patients’ illness. Instead, a significant proportion of the variation in ICU admission rates is due to hospital, not patient, factors. In this paper, we employ two years of data from patients admitted to 21 Kaiser Permanente Northern California ICUs from the ED. We quantify the variation in ICU admission from the ED under varying degrees of ICU and ED occupancy.  We find that substantial heterogeneity in admission rates is present, and that it cannot be explained either by patient factors or occupancy levels alone. We use a structural model to understand the extent that intertemporal externalities could account for some of this variation. Specifically, we identify the discount factor in the structural model from observed data using a novel econometric approach. We find there is large heterogeneity in the discount factors across hospitals, suggesting they behave very differently when balancing the short and long-term considerations. Using counterfactual simulations, we show that, if hospitals had more information regarding their behaviors, and if it were possible to alter hospital admission processes to incorporate such information, hospitals could reduce ICU congestion safely. This type of intervention can be implemented via a simple heuristic policy that achieves most of the benefit.

Date 19.11.2020
Time 9:00 - 10:30 pm
Venue Online via Zoom

Using Domain Adaptation Transfer Learning to Resolve Label-Lacking Problem: An Application to Deception Prediction
Mr. Ka Chung NG Boris, Ph.D. student, ISOM

Date 18.11.2020
Time 10:00 am - 11:30 am
Venue LSK 3003 / Zoom (mixed-mode)