Markdown or Everyday Low Price? The Role of Behavioral Motives

We study a seller’s optimal pricing and inventory strategies when behavioral (nonpecuniary) motives affect consumers’ purchase decisions. In particular, the seller chooses between two pricing strategies, markdown or everyday low price, and determines the optimal prices and inventory level. Two salient behavioral motives that impact consumers’ purchase decisions and the seller’s optimal strategies are anticipated regret and misperception of product availability. Regret arises when a consumer initially chooses to wait but encounters stockout later, or when the consumer buys the product at the high price but realizes that the product is still available at the markdown price. In addition, consumers often perceive the product’s future availability to be different than its actual availability. We determine and quantify that both regret and availability misperception have significant operational and profit implications for the seller. For example, ignoring these behavioral factors can result in up to 10% profit losses. We contrast the roles of consumers’ strategic (pecuniary) motives with their behavioral (nonpecuniary) motives in affecting purchase, pricing, and inventory decisions. The presence of the behavioral motives reinstates the profitability of markdown over everyday low price, in sharp contrast to prior studies of only strategic motives that suggest the contrary. We characterize how and why strategic versus behavioral motives affect decisions in distinctive manners. In doing so, this paper also introduces and determines the behavioral benefits of pricing in leveraging consumers’ behavioral regularities. We advocate that tactics that may intensify consumers’ misperception of availability, such as disclosing low inventory levels, can have a far-reaching impact on improving the seller’s profit

Are we strategically naïve or guided by trust and trustworthiness in cheap-talk communication?

Cheap-talk communication between parties with conflicting interests is common in many business and economic settings. Two distinct behavioral economics theories, the trust-embedded model and the level-k model, have emerged to explain how cheap talk works between human decision makers. The trust-embedded model considers that decision makers are motivated by nonpecuniary motives to be trusting and trustworthy. In contrast, the level-k model considers that decision makers are purely self-interested but limited in their ability to think strategically. Although both theories have been successful in explaining cheap-talk behaviors in separate contexts, they point to contrasting drivers for human behaviors. In this paper, we provide the first direct comparison of both theories within the same context. We show that, in a cheap-talk setting that well represents many practical situations, the two models make characteristically distinct and empirically distinguishable predictions. We leverage past experiment data from this setting to determine what aspects of cheap-talk behavior each model captures well and which model (or combination of models) has better explanatory power and predictive performance. We find that the trust-embedded model emerges as the dominant explanation. Our results, thus, highlight the importance of investing in systems and processes to foster trusting and trustworthy relationships in order to facilitate more effective cheap-talk interactions

Mechanism design for capacity planning under dynamic evolution of asymmetric demand forecasts

T his paper investigates the role of time in forecast information sharing and decision making under uncertainty. To do so, we provide a general framework to model the evolutions of forecasts generated by multiple decision makers who forecast demand for the same product. We also model the evolutions of forecasts when decision makers have asymmetric demand information and refer to it as the Martingale Model of Asymmetric Forecast Evolutions. This model helps us study mechanism design problems in a dynamic environment. In particular, we consider a supplier's (principal's) problem of eliciting credible forecast information from a manufacturer (agent) when both firms obtain asymmetric demand information for the end product over multiple periods. The supplier uses demand information to better plan for a capacity investment decision. When the supplier postpones building capacity and screening the manufacturer's private information, the supplier and the manufacturer can obtain more information and update their forecasts. This delay, however, may increase (respectively, decrease) the degree of information asymmetry between the two firms, resulting in a higher (respectively, lower) cost of screening. The capacity building cost may also increase because of a tighter deadline for building capacity. Considering all such trade-offs, the supplier has to determine (i) when to stop obtaining new demand information and build capacity, (ii) whether to offer a screening contract to credibly elicit private forecast information or to determine the capacity level without information sharing, (iii) how much capacity to build, and (iv) how to design the overall mechanism so that both firms benefit from this mechanism. This paper provides an answer to these questions. In doing so, we develop a new solution approach for a class of dynamic mechanism design problems. In addition, this paper provides a framework to quantify the option value of time for a strategic investment decision under the dynamic evolutions of asymmetric forecasts

Peter Berger Örneğinde Sekülerleşme Tartışmaları: Etkiler ve Fikrî Değişim

Din, insan yaşamını derinden etkileyen kurumların başında gelmektedir. Uzun yıllar boyunca dinin toplum yaşamı üzerine etkileri çok sayıda bilim insanı tarafından tartışma konusu olmuştur. Bu açıdan dinin toplum üzerindeki etkisi bilim insanları tarafından değişen toplumsal ve dönemsel şartlar nedeniyle her zaman araştırılmaya değer bulunmuştur. Özellikle, son dönemlerde birey ya da toplumun dinin toplumsal etkilerinden uzaklaştığı ya da insan üzerindeki etkisinin farklı yollarla artması problemi çok sayıda sosyoloğu bu konu özelinde araştırmalara itmiştir. Bu konu özelinde Peter Berger de görüşleri ve fikirleri açısından din sosyolojisi alanındaki önemli isimlerden biridir. Berger, dinin zamanla değişen doğası hakkındaki düşüncelerini sistematik hâle getirirken Karl Marks, Emile Durkheim ve Max Weber’den büyük ölçüde etkilenmiştir. Bu çalışmada, öncelikle Berger’in yöntem olarak eserlerinde kullandığı fenomenolojik yaklaşım ve gerçekliğin sosyal inşasına yönelik görüşleri detaylı bir şekilde ele alınacaktır. Bununla beraber Weber, Durkheim ve Marks’ın Berger’in sekürlerleşme tezi üzerindeki etkileri tartışılacaktır. Son olarak da Berger’in sekülerleşme ve desekülerleşme konusundaki düşünceleri ayrıntılı olarak analiz edilecektir. Çalışmada literetatür tarama tekniği kullanılmıştır. Çalışmanın temel amacı, ülkemiz alan yazınına katkı sağlamakla birlikte, Berger’in sekülerleşme tezinde zaman içinde meydana gelen değişimleri anlamaktır. Çalışmayı biçimlendiren ana soru Berger’e göre toplumsal yaşamda dinin insan hayatı üzerindeki etkilerinin zamanla nasıl değişime uğradığıdır. Çalışma sonuçlarına göre Berger, kurucu sosyologların fikirlerinden sekülerleşme konusunda oldukça etkilenmiştir. Ancak, Berger’in moderniteye bir tepki olarak gelişen dünya genelindeki yeni dinî hareketlerin canlanmasını analiz edebilmek için desekülerleşme tezini ortaya attığı görülmektedir. Ek olarak, Berger'in çalışmalarında daha çok toplumsal inşacı ve yorumlamacı yaklaşımları kullandığı anlaşılmakla birlikte fenomenolojiden de yararlandığı düşünülmektedir. Berger’in sekülerleşme ve desekülerleşme konusundaki fikirleri bu konu özelinde araştırmalar yapan bilim insanlarına yol göstermesi de beklenmektedir

and Özer: Dual Sales Channel Management with Service Competition Manufacturing

W e study a manufacturer's problem of managing his direct online sales channel together with an independently owned bricks-and-mortar retail channel, when the channels compete in service. We incorporate a detailed consumer channel choice model in which the demand faced in each channel depends on the service levels of both channels as well as the consumers' valuation of the product and shopping experience. The direct channel's service is measured by the delivery lead time for the product; the retail channel's service is measured by product availability. We identify optimal dual channel strategies that depend on the channel environment described by factors such as the cost of managing a direct channel, retailer inconvenience, and some product characteristics. We also determine when the manufacturer should establish a direct channel or a retail channel if he is already selling through one of these channels. Finally, we conduct a sequence of controlled experiments with human subjects to investigate whether our model makes reasonable predictions of human behavior. We determine that the model accurately predicts the direction of changes in the subjects' decisions, as well as their channel strategies in response to the changes in the channel environment. These observations suggest that the model can be used in designing channel strategies for an actual dual channel environment

The Effects of Bagging Applications on Maturation, Yield and Quality in cv. Italia Grape

Araştırmada Italia çeşidinde 2012 ve 2013 yıllarında üç farklıtorbalama uygulamasının (Mogul 19 g m-2, Mogul 30 g m-2 ve Tyvek)olgunluk, verim ve kalite üzerine etkileri incelenmiştir. Torbalamauygulamaları tane tutumu döneminde gerçekleştirilmiştir.Çalışmanın yürütüldüğü her iki yılda da Mogul tip torbalarda torbaiçi sıcaklıklarının dış koşullara göre daha yüksek olduğu, Tyvek tiptorbalarda ise torba içi sıcaklıkların dış koşullara yakın seyrettiğibelirlenmiştir. Torba içi nem değerleri tüm torbalarda dış koşullaragöre düşük bulunmuş, Mogul tip torbalarda bu değer Tyvek tiptorbalara göre daha düşük ortaya çıkmıştır. Araştırma bulgularınagöre tane yarılma direnci ölçümlerinde açıkta geliştirilen tanelerintorbalama uygulanmış tanelere göre daha sağlam olduğubelirlenmiştir. Özellikle Mogul tip torbaların ise olgunlaşmayıhızlandırıcı etki gösterdiği belirlenmiştir.In the study, the effects of three different bagging applications (Mogul 19 g m-2, Mogul 30 g m-2 and Tyvek) on the maturity, yield and quality of Italia grape cultivar were investigated in 2012 and 2013. Bagging applications were carried out during the berry set period. In both years of the study, it was determined that the temperatures in Mogul type bags were higher than the external conditions, while the temperatures in Tyvek type bags were close to the external conditions. Moisture values were found to be lower in all bags compared to external conditions, this value was lower in Mogul type bags compared to Tyvek type bags. According to the research findings, the berries in the control application were found to be more robust than the bagged ones in terms of resistance to berry crushing. Especially, Mogul type bags were determined to have an accelerating effect on maturation

Stochastic Multi-Item Inventory Systems with Markov-Modulated Demands and Production Quantity Requirements

We study a multi-item two-stage production system subject to Markov-modulated demands and production quantity requirements. The demand distribution for each item in each period is governed by a discrete Markov chain. The products are manufactured in two stages. In the first stage, a common intermediate product is manufactured, followed by product differentiation in the second stage. Lower and upper production limits, also known as production smoothing constraints, are imposed on both stages for all items. We propose a close-to-optimal heuristic to manage this system. To do so, we develop a lower bound problem and show that a state-dependent, modified base-stock policy is optimal. We also show when and why the heuristic works well. In our numerical study, the average optimality gap was 4.34%. We also establish some monotonicity results for policy parameters with respect to the production environment. Using these results and our numerical observations, we investigate the joint effect of (i) the two-stage production process, (ii) the production flexibility, and (iii) the fluctuating demand environment on the system's performance. For example, we quantify the value of flexible production as well as the effect of smoothing constraints on the benefits of postponement. We show that a redesign of the production process to allow for delayed product differentiation is more effective and valuable when it is accompanied by an investment in production flexibility

Quality Risk in Outsourcing: Noncontractible Product Quality and Private Quality Cost Information

This paper addresses the concept of quality risk in outsourcing. Due to increasing contract manufacturer (CM) responsibilities, an original equipment manufacturer's (OEM) product quality is mainly determined by its CM. Two factors cause quality risk in this setting. First, the CM and the OEM may not be able to contract on quality; second, the OEM may not know the cost of quality to the CM. We are primarily interested in the effects of these two quality risk factors on the firms' profits and on the resulting product quality. By determining the OEM's optimal two-part contracts, we quantify the values of activities that the OEM may undertake to contract on quality, and to learn the CM's quality cost. In addition, we study how the OEM's pricing strategy affects quality risk factors. In particular, we show that the OEM can increase its pro¯t by committing to a sales price in the contract, even when the CM's cost of quality is private information. We also address the case of commodity products for which the OEM does not have pricing power. Based on the analysis, we provide a decision tree that an OEM can use in deciding whether to invest in an enterprise-wide quality management system, a recent information technology tool that enables accounting of quality related activities across the supply chain

Orak hücre anemili çocuk ve ergenlerde ebeveyn ve öğretmen bildirilerine dayalı psikiyatrik sorunlar

Amaç: Bu çalışma Orak Hücre Anemisi (OHA) tanılı çocuk ve ergenlerde psikiyatrik sorunların varlığını incelemeyi amaçlamıştır. Gereç ve Yöntemler: 4-18 yaş arası için Çocuk Davranış Kontrol Listesi (ÇDKL/4-18), Conners Ebeveyn Derecelendirme Ölçeği (CEDÖ), Conners Öğretmen Derecelendirme Ölçeği (CÖDÖ-R) ve Turgay DSM-IV’e dayalı Çocuk ve Ergen Davranış Bozuklukları Tarama ve Derecelendirme Ölçeği, klinisyen ve ebeveyn formları (T-DSM-IV-Ö) 7-18 yaş arası OHA tanılı 31 çocuğun ve 34 yaş olarak eşlenmiş demir eksikliği anemisi tanılı kontrol grubunun bakım vericileri ve öğretmenlerine verildi. Bulgular: OHA tanılı çocuk ve ergenler her 4 ölçekte de daha yüksek puanlar aldılar. Ölçek alt puanlarında içe atım sorunları ve dikkat sorunları öne çıkıyordu. Sonuç: OHA tanılı çocuk ve ergenlerin psikiyatrik sorunlar açısından yüksek riskte olduğu görünmektedir. Olgulara düzenli psikolojik değerlendirme yapılması ve çocuk ve ergen psikiyatri kliniklerine refere edilmesi risk altında olan olguların zamanında tanısı ve etkin tedavisine katkı sağlayabilir.Objective: This study aimed to investigate the occurrence of psychiatric problems in children and adolescents with sickle cell disease (SCD). Material and Methods: The Child Behavior Checklist for ages 4-18 years (CBCL/4-18), Conners’ Parent Rating Scale (CPRS), Conners’ Teacher Rating Scale (CTRS-R), and The Turgay DSM-IV Based Child and Adolescent Behavior Disorders Screening and Rating Scale, clinician and parent forms (T-DSM-IV-S) were given to the caregivers and teachers of 31 children with SCD aged between 7-18 years and the caregivers and teachers of 34 age matched controls with iron- deficiency anemia. Results: The SCD patients had higher scores on all 4 of scales. Among the subscales, internalizing problems, and attention problems were more prominent in the SCD patients. Conclusion: Children and adolescents with SCD appear to have an increased risk for psychiatric problems. Regular psychological evaluation and referral to child and adolescent psychiatry clinics may facilitate timely diagnosis and effective treatment of at-risk children and adolescents

Integrating Replenishment Decisions with Advance Demand Information

There is a growing consensus that a portfolio of customers with different demand lead times can lead to higher, more regular revenues and better capacity utilization. Customers with positive demand lead times place orders in advance of their needs, resulting in advance demand information. This gives rise to the problem of finding effective inventory control policies under advance demand information. We show that state-dependent (s, S) and base-stock policies are optimal for stochastic inventory systems with and without fixed costs. The state of the system reflects our knowledge of advance demand information. We also determine conditions under which advance demand information has no operational value. A numerical study allows us to obtain additional insights and to evaluate strategies to induce advance demand information.Stochastic Inventory Systems, Advance Demand Information, Demand Lead Times