Browsing by Subject "Sharing Economy"

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    Business Model Innovation, Social Interactions, and Behavioral Decision Making
    (2019-08) Pourghannad, Behrooz
    This thesis consists of three parts. All chapters are centered around the behavioral decision making and business model innovation. In the first essay, we study a supply chain with a supplier selling products to a retailer who is boundedly rational. Under this setting, we study the impacts of the retailer's bounded rationality on the supplier's choice of contract and the supply chain efficiency. We develop a behavioral model that incorporates the human retailers bounded rationality in a supply chain setting. We then conduct a series of laboratory experiments to test whether the model's predictions are still salient even when the supplier is not necessarily rational. In contrast to a supply chain with a fully rational retailer, where a wholesale price contract usually cannot perform better than more complicated nonlinear contracts, we find that when the retailer is boundedly rational a wholesale price contract can dominate commonly used nonlinear contracts such as buy-back and revenue sharing contracts. We characterize the conditions under which a wholesale price contract outperforms more sophisticated non-linear price contracts for the supplier. In both theoretical model and the experiments, we find that a wholesale price contract is more likely to be implemented by the supplier when the supply chain profit margin is low, the retailer is less rational, the demand variance is high, and the retailer's reservation value is high. The results can explain the prevalence of wholesale price contract in business practice when the rationality of retailers cannot always be guaranteed. We also find that the retailer's bounded rationality plays a more important role in determining supply profit than the supplier's bounded rationality. In the second essay, we consider a setting which involves a service provider who sells access to a service or a product to a unit mass of heterogenous consumers. Such s business model is gaining popularity in recent years. With this growth comes opportunities for peer-to-peer trading marketplaces to emerge. However, there is a debate on whether or not peer-to-peer trading of excess capacity is beneficial to service providers and consumers. The second essay in this thesis aims to shed light on this debate and identifies conditions under which the existence of such marketplaces can be a win-win situation for all parties. We develop a game-theoretic model in which consumers participate in a simultaneous coordination game. Consumers are strategic and take into account the opportunity of purchasing or selling extra capacity on the trading market. Our model captures the heterogeneity of consumers' demand and the service provider's ability to modify service plans in view of this trading among consumers. We compare equilibrium outcomes with and without trading and show that outcomes with regard to service provider profit, consumer surplus, and social welfare are crucially dependent on service cost and trading price. A service provider would benefit from trading as long as the trading price is not too low (a low trading price encourages more consumers to opt for the low plan) and the service cost is not too high (a high service cost makes increased consumption due to trading too costly). A trading price that is too low can decrease consumer surplus and social welfare. Hence, a social planner would be interested in inducing a moderate or high trading price. In settings where the service provider can modify prices, consumers are no longer guaranteed to benefit from trading. In this case, trading can hurt consumers if the trading price is either sufficiently high (resulting in consumers paying a higher price for the higher plan) or sufficiently low (resulting in less consumption because more consumers opt for the low plan). Our results provide guidance to service providers, consumers, and policy makers as to when peer-to-peer trading may or may not be beneficial. The results highlight the important interplay between trading price and cost of service in determining various outcomes. For policymakers, the results can be useful in pointing out when such trading improves outcomes for consumers or social welfare and to potential policy levers that could be deployed to affect outcomes. Finally, in the last essay, we study the interaction between information asymmetry and the reciprocity in a financial crowdfunding setting. Most of the crowdfunding platforms encourage entrepreneurs to tap into their social network and bring investors from their social networks to their crowdfunding campaigns. This is done with the intention of creating the early momentum which appears to be the key to running a crowdfunding campaign. However, the incentives and information of those investors who are attracted to crowdfunding campaign from the entrepreneur's social network could be different from other investors who do not have a social tie with the entrepreneur. On the other hand, the regular investors do not have a social tie with the entrepreneur and their sole investment motivation is financial. In the last essay of this thesis, we develop a signaling game to better understand the interaction between the reciprocity and the information flow in a financial crowdfunding setting. Our main result indicates that the reciprocity may create a situation in which the informed investor (those from the entrepreneur's social network) cannot signal their type via distorting her investment.
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    Essays on Online-Offline Interactions
    (2020-07) Babar, Yash
    As communication, consumption of goods and services, and other aspects of our lives become increasingly digitized, it is important to understand how we as individuals balance the virtual world with the physical. In this thesis, I examine how online and offline interactions complement or substitute each other in two different settings. In the first chapter(essay), I empirically evaluate the impact of the introduction of a new online service, app-enabled ride-hailing, on an offline transportation market incumbent, public transit. I focus on public transit in the United States and the impact of Uber and Lyft's entry on its monthly utilization. City and agency-level factors that moderate this impact are also explored to offer guidance for transit planners as well as ride-hailing agencies to optimize the interactions between the two forms of services. In the second chapter, I explore the influence of offline face-to-face interactions on online activities in a large scale hybrid community. Using a Facebook foodie group as the context of the study, I examine how the occurrence of meetups and their attendance influences subsequent activities of the group and its individual members. Effective meetup conductance and other community administrative implications for managers are provided to help improve online community health.
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    Essays on Sharing Economy
    (2017-06) Li, Xiang
    This thesis studies the product sharing manifestation of the sharing and on-demand economy. It consists of two essays, one on peer-to-peer (P2P) product sharing and the other on business-to-consumer (B2C) product sharing. The first essay describes an equilibrium model of P2P sharing or collaborative consumption, where individuals with varying usage levels make decisions about whether or not to own a product. Owners are able to generate income from renting their products to non-owners while non-owners are able to access these products through renting on as needed basis. We characterize equilibrium outcomes, including ownership and usage levels, consumer surplus, and social welfare. We compare each outcome in systems with and without collaborative consumption. Our findings indicate that collaborative consumption can result in either lower or higher ownership and usage levels, with higher ownership and usage levels more likely when the cost of ownership is high. Our findings also indicate that consumers always benefit from collaborative consumption, with individuals who, in the absence of collaborative consumption, are indifferent between owning and not owning benefitting the most. We study both profit maximizing and social welfare maximizing platforms and compare equilibrium outcomes under both in terms of ownership, usage, and social welfare. We find that a not-for-profit platform would always charge a lower price and, therefore, lead to lower ownership and usage than a for-profit platform. We also examine the robustness of our results by considering several extensions to our model. The second essay characterizes the optimal inventory repositioning policy for a class of B2C product sharing networks. We consider a B2C product sharing network with a fixed number of rental units distributed across multiple locations. The units are accessed by customers without prior reservation and on an on-demand basis. Customers are provided with the flexibility to decide on how long to keep a unit and where to return it. Because of the randomness in demand, rental periods and return locations, there is a need to periodically reposition inventory away from some locations and into others. In deciding on how much inventory to reposition and where, the system manager balances potential lost sales with repositioning costs. We formulate the problem into a Markov decision process and show that the problem in each period is one that involves solving a convex optimization problem. The optimal policy in each period can be described in terms of a well-specified region over the state space. Within this region, it is optimal not to reposition any inventory while, outside the region, it is optimal to reposition some inventory but only such that the system moves to a new state that is on the boundary of the no-repositioning region. We provide a simple check for when a state is in the no-repositioning region, which also allows us to compute the optimal policy more efficiently.