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Introduction

Alex Gershkov

in Dynamic Allocation and Pricing: A Mechanism Design Approach

This chapter presents the main approach to dynamic allocation and pricing problems adopted in this book, and outlines the structure of the following, main chapters.

The Wait or Buy Game: How to Game the System That’s Designed to Game You Back

Anton Ovchinnikov

in The Handbook of Behavioral Operations Management: Social and Psychological Dynamics in Production and Service Settings

This chapter considers the tendencies for individual decision makers to perform nonoptimally when faced with a choice between purchasing a good/service immediately, versus waiting to purchase at a ... More

This chapter considers the tendencies for individual decision makers to perform nonoptimally when faced with a choice between purchasing a good/service immediately, versus waiting to purchase at a lower cost but potentially higher risk. The challenge of effective dynamic pricing by sellers is also addressed. The Wait or Buy game introduces strategic consumer behavior in the dynamic pricing and revenue management context. In the three versions of the game students act either as buyers who decide to buy now or wait for a lower price, or as sellers who decide on how much inventory to allocate to discounted price sales. They compete against computerized sellers or buyers, respectively, or against each other. The game has been taught many times in a business school classroom as an effective tool to study behavioral issues in dynamic pricing and revenue management.Less

Weather: Creating the Perfect Storm

Anindya Ghose

in Tap: Unlocking the Mobile Economy

This chapter examines one of nine critical forces behind purchase decisions that make mobile advertising so powerful: weather. Weather is ubiquitous and omnipresent. Scientific literature tells us ... More

This chapter examines one of nine critical forces behind purchase decisions that make mobile advertising so powerful: weather. Weather is ubiquitous and omnipresent. Scientific literature tells us just how strongly weather can influence our behavior, our moods, and our short-term, medium-term, and long-term decision making. One study showed that when our moods change, weather can account for as much as 40 percent of that change. Weather also offers that special ingredient that helps improve our understanding and find ways to make advertising a lucrative win-win for businesses and customers: lots and lots of data. The chapter introduces a mix of academic studies and business success stories, which show that the value of weather as a very influential driver of behavior. It discusses how weather affects mobile purchases and drives sales of big-ticket items.Less