Three Essays on Modeling Consumer Behavior and Its Operations Management Implications.

Consumer Behavior;Business (General);Business and Economics;Business Administration

Chung, HakjinOstler, James Owen ;

University of Michigan

关键词: Consumer Behavior;    Business (General);    Business and Economics;    Business Administration;   

Others  :  https://deepblue.lib.umich.edu/bitstream/handle/2027.42/133387/hakjin_1.pdf?sequence=1&isAllowed=y

瑞士|英语

来源: The Illinois Digital Environment for Access to Learning and Scholarship

【 摘 要 】

Traditionally, models used in operations management have considered the firm side of the problem by making simplifying assumptions on demand or market. In practice, however, consumers or agents in the market actively make decisions or choices based on self interest. This dissertation aims to analyze how insights and results from traditional models are affected when we account for such active decision making by consumers or the market. In Chapter II, we study how the customers;; decision of joining the queue to receive a service varies by the individual incentive as well as the firm;;s capacity decision, which also depends on the firm’s selfishness. By considering three customer types: individual, collective, and social, and two firm types: profit maximizing and welfare maximizing, we are able to disentangle the effects of selfishness of the customers and the firm, and the interactions between these two in equilibrium. Among other results, we find that there can be a ``benefit of selfishness;;;; to consumers and the system, in contrast to the price of anarchy literature. In Chapter III, we discuss the customers;; redemption behavior of loyalty points and its impact on the seller;;s pricing and inventory rationing strategy. We model the customer choice between cash or loyalty points by characterizing consumers in three dimensions: the reservation price, the point balance, and their perceived valuation of points. Applying this choice model into the seller;;s dynamic pricing model, we characterize the seller;;s optimal strategy that specifies the optimal price, the control of reward sales (black-out), and the redemption points. In Chapter IV, we study the customers’ substitution behavior when their preferred product is not available, and the seller;;s assortment optimization problem. Motivated by the exogenous demand model and the recently developed Markov chain model, we propose a new approximation to the random utility customer choice model called rescaled multi-attempt model. The key feature of our proposed approach is that the resulting approximate choice probability can be explicitly written. From a practical perspective, this allows the decision maker to use an off-the-shelf solver to solve a general assortment optimization problem with a variety of real-world constraints.