We empirically investigate the effects of a borrower’s choice of auction-based pricing mechanisms and her social characteristics on listing outcomes and loan performance in online lending. Analyzing data from a leading online lending platform, we find that the borrower’s choice of borrower pricing mechanism and being affiliated with a group are both associated with higher funding probability; thus, the lenders may interpret them as positive signals of creditworthiness of the borrower. However, these signals are misleading to the lenders as they are actually both associated with higher default risk and greater credit loss (in case of default). In addition, we find that the positive effect of the borrower’s social characteristics on funding probability is smaller when she chooses the borrower pricing mechanism. Moreover, we find that although exerting a positive (negative) effect on loan performance, the number of friends (group affiliation) of the borrower aggravates (reduces) the effect of the group affiliation (number of friends) on loan default risk. Another interesting finding is that, despite having an adverse effect on loan performance, a borrower’s group affiliation, can mitigate the negative effects of the borrower’s requested amount on listing outcomes and loan performance. Our analysis also shows that, in the context of online microloan lending, a borrower’s choice of auction-based pricing mechanisms is a better predictor of loan performance than some other traditional credit-related information.
参考文献：Sirong Luo, Radha Mookerjee, Dengpan Liu. The Effects of Auction-based Pricing Mechanisms and Social Characteristics on Microloan Performance. Production and Operations Management 30(2), 311-329.
The gap between medical research on diagnostic testing and clinical workflow can lead to rejection of valuable medical research in a busy clinical environment due to increased workloads, or rejection of medical research in the laboratory that may be valuable in practice due to a misunderstanding of the system-level benefits of the new test. This has implications for research organizations, diagnostic test manufacturers, and hospital managers among others. To bridge this gap, we develop a Markov decision process (MDP) from which we create “adoption regions” that specify the combination of test characteristics medical research must achieve for the test to be feasible for adoption in practice. To address the curse of dimensionality from patient risk stratification, we develop a decomposition algorithm along with structural properties that shed light on which patients and when a new diagnostic test should be used. In a case study of a partner Emergency Department, we show that the conventional myopic medical criterion can lead to poor decision making in both research development and clinical practice. In particular, we find that specificity—long a secondary consideration and often overlooked in the research process—is, in fact, the key to effective implementation of new tests into clinical environments. This myopic approach can lead to overvaluing or undervaluing new medical research. This mismatch is accentuated when a simple (current) policy is used to integrate research into the clinical environment compared with our MDP’s policy—poor implementation of a new test can also lead to unnecessary rejection. Our framework provides easily interpretable guidelines for medical research development and clinical adoption decisions that can guide medical research as to which test characteristics to focus on to improve the chances of adoption.
参考文献：Pengyi Shi, Jonathan E. Helm, H. Sebastian Heese, Alice M. Mitchell. An Operational Framework for the Adoption and Integration of New Diagnostic Tests. Production and Operations Management 30(2), 330-354.
The operations-finance interface (OFI) jointly optimizes material, monetary, and information flows under intricate sources of uncertainty. To sketch the broad landscape in this emerging and interdisciplinary field, this study synthesizes literature across diverse themes and dispersed methodologies, screens systematically the research progression from original foundations to recent contributions in each major research stream, and thereby advocates future research innovations on prospective topics in light of the interconnections and potential reciprocity between operations and finance from risk management aspects.
参考文献：Jiao Wang, Lima Zhao, Arnd Huchzermeier. Operations-Finance Interface in Risk Management: Research Evolution and Opportunities. Production and Operations Management 30(2), 355-389.
A firm’s product-cost information is increasingly transparent to consumers as the firm itself or third parties publish such information, which reduces consumers’ uncertainty for the product’s cost. Using a dynamic model of firm pricing with forward-looking consumer choices, this study assesses how cost transparency affects the firm’s intertemporal price discrimination and profit, as well as the consumers’ strategic waiting decisions and surplus. Ceteris paribus, if consumers believe a durable product has a lower cost, they will expect a larger future price drop and tend to delay purchases, impeding the firm’s ability to engage in intertemporal price discrimination. Without cost transparency, consumers may infer products with higher prices to have higher costs, giving a low-cost firm incentives to mimic a high-cost firm’s high price to encourage consumers to buy early. In contrast, a high-cost firm may choose to distort its price to avoid a low-cost firm’s price mimicry. Cost transparency reveals the product’s true cost to consumers, limiting the low-cost firm’s ability to mimic prices. Thus, cost transparency will benefit (harm) a firm with a high (low) cost. In equilibrium, cost transparency will increase the firm’s sales volume and induce more consumers to buy the product earlier instead of later, attenuating strategic waiting by consumers. We also find that cost transparency can lead to higher prices and hurt consumers if the firm has a high cost. In expectation, cost transparency leads to higher firm profits and consumer surplus, facilitating a firm’s new product innovation.
参考文献：Baojun Jiang, K. Sudhir, Tianxin Zou. Effects of Cost‐Information Transparency on Intertemporal Price Discrimination. Production and Operations Management 30(2), 390-401.
This paper studies the effects of international taxation on multinational firms’ production outsourcing strategies, which has attracted recent attention from both practitioners and legislators. We formulate a stylized economic model with information asymmetry and find that under the territorial tax system, the presence of global tax disparity may result in subtle changes of a firm's production outsourcing strategy. In particular, the tax consideration can make a multinational firm more inclined to procure materials by its overseas subsidiary and then resell the materials to the contract manufacturer to retain profit in the low tax jurisdiction. Such an effect can not only cause the firm to choose a more expensive material supplier but also overproduce the products. Therefore, besides the general concern of income shifting, tax considerations can further lead to operational distortions. We show that to reduce tax disparity while preventing tax exemption for shifted foreign profit may lead to a win-win outcome for the firm and the home country stakeholders. The firm will make more efficient operational decisions to obtain a higher after-tax profit at a certain reduced tax rate, while the home country stakeholders can receive more tax income. Interestingly, the foreign contract manufacturer may also benefit from such a change.
参考文献：Guoming Lai, Yixuan Liu, Wenqiang Xiao. International Taxation and Production Outsourcing . Production and Operations Management 30(2), 401-418.
Cloud computing can be viewed as an e-business in which the cloud provider sells a range of information technology services and operations over the Internet to firms. Security is a major concern for firms that move to the cloud. The security of a cloud is the joint responsibility of the cloud provider and cloud users. However, the extent to which the provider and users can affect cloud security through their efforts depends on the cloud service model. In this study, we develop a game-theoretical model to study the impact of the cloud service model on provider and user incentives to exert security effort. Our results show that for a given service model, an increase in the user loss from a security breach induces users to exert more security effort. However, if the provider’s service cost is low, the provider profitably free rides on the enhanced user incentives to exert security effort by diminishing his effort. Analogously, the cloud provider is able to profitably free ride on users’ enhanced incentives to exert security effort when the user population is more homogeneous in terms of either cloud valuation or loss from a security breach, depending on the service cost. Our results also have implications for how a cloud provider could possibly target a particular cloud service model to specific user groups based on their characteristics and likelihood of security loss.
参考文献：Mingwen Yang, Varghese S. Jacob, Srinivasan Raghunathan. Cloud Service Model’s Role in Provider and User Security Investment Incentives. Production and Operations Management 30(2), 419-437.
This study investigates how value-added services (VAS) and customer care services (CCS) moderate the association between satisfaction with the core telephone service and overall customer satisfaction in base-of-the-pyramid (BOP) markets. We propose that customers respond to VAS and CCS differently due to variations in price evaluations of these services. We further examine how the interactions among the service dimensions may differ for local and global telephone providers. We used an archival dataset from a survey of more than 3200 cellphone customers across 34 providers in seven South Asian countries that include India, Pakistan, Bangladesh, Srilanka, Nepal, Bhutan, and Maldives to test our conjectures. We find that satisfaction with VAS negatively moderates the relationship between core connection satisfaction and overall satisfaction, and satisfaction with CCS positively moderates the relationship between core connection satisfaction and overall satisfaction. Furthermore, the positive and negative interaction effects are stronger for global vs. local providers. We discuss contributions and managerial implications of the findings.
参考文献：Jiban Khuntia, Raveesh Mayya, Sunil Mithas, Ritu Agarwal. Managing Cellphone Services for Customer Satisfaction: Evidence from the Base‐of‐the‐Pyramid Markets. Production and Operations Management 30(2), 438-450.
Initial deployment decisions are critical to humanitarian organizations as they pre-position resources and prepare for predictable disasters, such as hurricanes, floods, and wildfires. Deploying too few resources results in unmet demand, bad publicity, and unhappy donors. However, deploying a large number of resources can also result in bad publicity and unhappy donors due to high costs and wasted resources when disasters do not occur as expected and deployed items are not managed efficiently. We use a stochastic optimization model to investigate the initial deployment decision and resulting costs. The stochastic model forces the initial deployment decision to be made after the disaster warning, but before the disaster occurs and true demand is realized. We find that a full optimization model (incorporating returns and disposal into the model) will increase the initial deployment level from the level obtained without incorporating returns and disposal (referred to as a partial optimization model). This allows more beneficiaries to be served when using a full optimization model. We also find that fixed return costs do not have a large impact on initial deployment levels, but can result in a more consolidated pre‐positioning strategy. Using the results of our models, we present several other interesting managerial insights that may be useful for humanitarian organizations in pre‐positioning inventory for predictable disasters.
参考文献：Jon M. Stauffer, Subodha Kumar. Impact of Incorporating Returns into Pre-Disaster Deployments for Rapid-Onset Predictable Disasters. Production and Operations Management 30(2), 451-474.
Material Requirements Planning (MRP), a core component of enterprise resource planning (ERP) systems, is widely used by manufacturers to determine the production lot sizes of components. These lot sizes are typically computed based on deterministic and dynamic demand assumptions, while safety stocks, which hedge against demand uncertainty, are determined independently based on different assumptions. As the lot sizes and safety stocks are not determined simultaneously, sub-optimal decisions are often used in practice. The critical impact of inventories and service levels in manufacturing motivates the study of stochastic optimization methods for MRP. In this study, we investigate stochastic optimization methods for MRP systems under demand uncertainty. A two-stage and a multi-stage model are proposed to deal with the static‐static and static‐dynamic decision frameworks, respectively. We first derive structural properties of the two-stage and multi-stage models to provide insights on the differences between the plans created with these two models. As multi-stage stochastic programs are not convenient in real-world applications, several practical enhancements are proposed. First, to address scalability issues, we employ heuristics in combination with advanced sampling methods. Second, to allow real-time static-dynamic decisions, we derive a policy from the solution of the multi-stage model. Third, to deal with the dynamic-dynamic decision framework, we employ a rolling horizon implementation. The effectiveness and performance of stochastic optimization for MRP are validated by numerical experiments, which demonstrate that the stochastic optimization approaches have the potential to generate significant cost savings compared to traditional methods for production planning and safety stocks determination.
参考文献：Simon Thevenin, Yossiri Adulyasak, Jean-François Cordeau. Material Requirements Planning Under Demand Uncertainty Using Stochastic Optimization. Production and Operations Management 30(2), 475-493.
Dual channel distribution benefits upstream manufacturers but may irritate downstream retailers. The channel conflict only seems to aggravate when retailers are put at information disadvantage. We show this need not be the case. (i) We demonstrate upstream private information can improve channel efficiency and consumer surplus. The main mechanism is the offsetting interplay of signaling distortion and double marginalization: with private selling cost, the manufacturer may signal her cost by cutting the wholesale price; the price cut encourages the retailer to buy more, thereby reducing double marginalization and improving channel efficiency. (ii) We qualify the received wisdom. The general insight that cost information asymmetry reduces efficiency does not work in dual-channel settings. We show incorporating cost information asymmetry can change dual-channel equilibrium substantially—it can turn the retailer and channel from the victims of manufacturer encroachment to its beneficiaries. Also, we rationalize why the retailer can benefit from his information disadvantage, and when he can gain from the manufacturer’s selling cost improvement, despite retail competition. (iii) We demonstrate our results are robust for other prevailing arrangements, for example, two-part tariffs, price competition, imperfect substitution, and simultaneous moves. Our results suggest a more nuanced view of manufacturer encroachment: as private cost information can ease channel conflict and improve consumer surplus, previous studies may have overestimated the harm of encroachment. By highlighting the critical role of cost information asymmetry, this study sharpens our understanding of dual‐channel theory and practice.
参考文献：Long Gao, Liang Guo, Adem Orsdemir. Dual-Channel Distribution: The Case for Cost Information Asymmetry. Production and Operations Management 30(2), 494-521.
We study recycling technology choice, a critical factor that has received little attention in the context of extended producer responsibility, and its interaction with product design-for-recycling in driving the environmental benefits of recycling systems. Collective recycling systems have long been criticized for restricting the environmental benefits of extended producer responsibility because of free riding issues among producers, which can undermine incentives for product design-for-recycling. We revisit and refine this assertion by analyzing the interaction between recycling technology and product design-for-recycling choices. We develop game-theoretic models where producers and processors decide on product design-for-recycling and recycling technology choices, respectively. We then compare the equilibrium benefits of recycling in collective and individual systems. The key result in this study is that when recycling technology choice is taken into account, collective recycling systems can lead to higher environmental and economic benefits than individual recycling systems. This is because collective recycling systems provide stronger incentives for recycling technology improvements. In turn, these improvements can help overcome the drawbacks associated with inferior product design-for-recycling outcomes caused by free riding concerns among producers in collective recycling systems. In light of these results, we posit that an exclusive focus on product design-for-recycling to assess the environmental benefits of extended producer responsibility-based recycling systems may need scrutiny. Producers and policy makers may need to evaluate recycling systems with respect to the incentives they provide for both product design-for-recycling and recycling technology improvements.
参考文献：Morvarid Rahmani, Luyi Gui, Atalay Atasu. The Implications of Recycling Technology Choice on Extended Producer Responsibility. Production and Operations Management 30(2), 522-542.
