New: The Use and Value of Social Network Information in Selective Selling
We consider the use and value of social network information in selectively selling goods and services whose value derives from exclusive ownership among network connections or friends. Our stylized model accommodates customers who are heterogeneous in their number of friends (degree) and their proclivity for social comparisons (conspicuity). Firms with information on either (or both) of these characteristics can use it to make a product selectively available and increase their profits by better managing the exclusivity-sales trade-off. We find that the firm’s best targets are high-conspicuity customers within intermediate-degree segments – in contrast with the practice of targeting high degree customers. We also find that information about degree is more valuable than information about conspicuity. Surprisingly, strategies informed only by degree perform no worse than those informed by degree and conspicuity both, yet the opposite is not true. Customer self-selection is a perfect ...
REVISION: Supply Networks for Relational Sourcing
Making long-term commitments to exclusive suppliers, or relational sourcing, is critical in industries where quality includes social, ethical, and technical elements concerning which contractual terms would be costly to verify or enforce. This study identifies supplier network topologies that best facilitate such relational sourcing. We consider a brand-owning firm that sources in an ongoing fashion from a general multi-tier network of idiosyncratic suppliers. Alternate network designs are compared in terms of three defining structural properties: network scope, the number of suppliers at each tier in the network; degree of control/delegation, the number of tiers in the network; and network connectivity, the connections between firms located at different tiers. Our analysis reveals that neither network connectivity nor the distribution of costs among suppliers affects the ability to sustain relational sourcing. Networks characterized by more delegation or less scope have the most to ...
REVISION: Online Grocery Retail: Revenue Models and Environmental Impact
This paper compares the financial and environmental performance of two revenue models for the online retailing of groceries: the per-order model, where customers pay for each delivery; and the subscription model, where customers pay a set fee and receive free deliveries. We build a stylized model that incorporates (i) customers with ongoing uncertain grocery needs and who choose between shopping offline or online and (ii) an online retailer that makes deliveries through a proprietary distribution network. We find that subscription incentivizes smaller and more frequent grocery orders, which reduces food waste and creates more value for the customer; the result is higher retailer revenues, lower grocery costs, and potentially higher adoption rates. These advantages are countered by greater delivery-related travel and expenses, which are moderated by area geography and routing-related scale economies. Subscription also leads to lower food waste-related emissions but to higher ...
REVISION: Bike-Share Systems: Accessibility and Availability
The cities of Paris, London, Chicago, and New York (among others) have recently launched large-scale bike-share systems to facilitate the use of bicycles for urban commuting. This paper estimates the relationship between aspects of bike-share system design and ridership. Specifically, we estimate the effects on ridership of station accessibility (how far the commuter must walk to reach a station) and of bike-availability (the likelihood of finding a bike at the station). Our analysis is based on a structural demand model that considers the random-utility maximizing choices of spatially distributed commuters, and it is estimated using high-frequency system-use data from the bike-share system in Paris. The role of station accessibility is identified using cross-sectional variation in station location and high -frequency changes in commuter choice sets; bike-availability effects are identified using longitudinal variation. Because the scale of our data, (in particular the high-frequency ...
New: The Benefits of Decentralized Decision-Making in Supply Chains
The inefficiency of decentralized decision-making is one of the most influential findings of the supply chain coordination literature. This paper shows that with the possibility of continuing trade, decentralization can be beneficial in improving supply chain performance. In a supply chain with decentralized decision-making and continuing trade, it is easier to incentivize players to coordinate on efficient actions. There are more gains to be shared from coordination, and by virtue of each playe
REVISION: The Relational Advantages of Intermediation
This paper provides a novel explanation for the use of supply chain intermediaries such as Li & Fung Ltd.. We find that even in the absence of the well-known transactional and informational advantages of mediation, intermediaries improve supply chain performance. In particular, intermediaries facilitate responsive adaptation of the buyers’ supplier base to their changing needs while simultaneously ensuring that suppliers behave as if they had long-term sourcing commitments from buying firms. In