Online Business-to-Business Markets for Industrial Product Reuse: Evidence from an Operational Policy Change

2020 ◽  
Author(s):  
Suvrat Dhanorkar ◽  
Karen Donohue ◽  
Kevin Linderman
Keyword(s):  
Policy Change ◽  
Detailed Examination ◽  
Problem Definition ◽  
Product Mix ◽  
Business Markets ◽  
Managerial Implications ◽  
Online Business ◽  
Technology Substitution ◽  
Product Reuse ◽  
Business To Business

Problem definition: We examine the importance of expert services in online materials and waste exchanges (OMWEs), which are online business-to-business markets for coordinating transactions of industrial surplus, by-products, and waste. Academic/practical relevance: OMWEs face unique challenges because of their product mix and market characteristics. Many OMWEs have traditionally relied on a combination of routine services (online aggregation, filtered search, etc.) and expert services (selective and spatial matching, contract facilitation, etc.). Although OMWEs employ varying levels of expert services, the ultimate value of expert services in promoting transactions is not fully understood. From a managerial perspective, our study provides insights into the importance of balancing routine and expert services, offering guidance on when expert services offer the most benefits. From an academic perspective, we expand on the type of product and market attributes that should be considered in tailoring OMWE designs. Methodology: We use transactional data from a unique OMWE setting (MNExchange.org), which consists of approximately 3,500 product listings from 700+ supplier firms, collected during 2001–2007. We use various econometric techniques (survival analysis, regression discontinuity, etc.) to examine the changes in performance, including transaction rates and time to market, attributable to an operational policy change that occurred in 2004. We further conduct a detailed examination of mechanisms, alternative explanations, and counterfactual analysis. Results: The results show that eliminating expert services in OMWEs can adversely affect transaction outcomes in OMWEs. In particular, the results show that OMWEs should consider their product mix and market characteristics when making decisions about the appropriate use of expert services. Managerial implications: The study provides insights for improving the potential of online reuse marketplaces in the circular economy. From a broader perspective, the paper contributes to the debate on the role of technology in sustainable development and technology substitution for human tasks.

scholarly journals Managing Market Thickness in Online Business-to-Business Markets

2020 ◽  
Vol 66 (12) ◽  
pp. 5783-5822 ◽  
Author(s):  
Kostas Bimpikis ◽  
Wedad J. Elmaghraby ◽  
Ken Moon ◽  
Wenchang Zhang
Keyword(s):  
Operations Management ◽  
Natural Experiment ◽  
Recommendation System ◽  
Structural Model ◽  
Supply And Demand ◽  
Supply Side ◽  
Design Decisions ◽  
Business Markets ◽  
Online Business ◽  
Business To Business

We explore marketplace design in the context of a business-to-business platform specializing in liquidation auctions. Even when the platform’s aggregate levels of supply and demand remain fixed, we establish that the platform’s ability to use its design levers to manage the availability of supply over time yields significant value. We study two such levers, each using the platform’s availability of supply as a means to incentivize participation from buyers who decide strategically when/how often to participate. First, the platform’s listing policy sets the ending times of incoming auctions (hence, the frequency of market clearing). Exploiting a natural experiment, we illustrate that consolidating auctions’ ending times to certain weekdays increases the platform’s revenues by 7.3% mainly by inducing a higher level of bidder participation. The second lever is a recommendation system that can be used to reveal information about real-time market thickness to potential bidders. The optimization of these levers highlights a novel trade-off. Namely, when the platform consolidates auctions’ ending times, more bidders may participate in the marketplace (demand-side competition); but ultimately auctions for substitutable goods cannibalize one another (supply-side competition). To optimize these design decisions, we estimate a structural model that endogenizes bidders’ dynamic behavior, that is, their decisions on whether/how often to participate in the marketplace and how much to bid. We find that appropriately designing a recommendation system yields an additional revenue increase (on top of the benefits obtained by optimizing the platform’s listing policy) by reducing supply-side cannibalization and altering the composition of participating bidders. This paper was accepted by Vishal Gaur, operations management.

Managerial implications of research on inter-organizational interfaces

IMP Journal ◽  
2016 ◽  
Vol 10 (1) ◽  
pp. 25-49 ◽  
Author(s):  
Björn S. Ivens ◽  
Catherine PARDO
Keyword(s):  
Academic Research ◽  
Business Markets ◽  
Content Type ◽  
Account Management ◽  
Key Account ◽  
Key Word ◽  
Managerial Implications ◽  
Specific Concept ◽  
Business To Business ◽  
Practical Implications

Purpose – The purpose of this paper is to identify what managerial implications research related to inter-organizational interfaces has been produced in marketing. For this aim, the authors focus on a specific concept implemented in many firms that operate on business-to-business markets, which is key account management (KAM). Design/methodology/approach – The authors used the Ebsco Database entering “account management” as a key word in the title row. The search provided 51 papers to which the authors added four MSI reports written by Moriarty and Shapiro between 1980 and 1984. The authors then identified such keywords as “managers”, “practitioners”, “marketers”, “managerial”, “business”, and their variations as well as normative words such as “should”, “must”, etc. in order to identify managerial implications. Findings – Four main findings are provided: a clear managerial purpose is affirmed by KAM academic works whether as a central “purpose” of the works or as “implications”; these managerial implications may display different forms (dimensions to be considered, consequences to anticipate, advices); though the managerial scope of KAM works is clearly visible, the sophistication of managerial recommendations remains … limited; the identification of who is exactly “the manager” targeted by the implications remains vague. Research limitations/implications – The authors discuss the notion of managerial relevance of academic research. Practical/implications – The authors explore sources for practices (whether they are the ones of scholars or managers) that could help “spelling out more effectively the managerial implications. Originality/value – To the knowledge this is the first work that reviews so precisely how academic articles address to the managerial audience on a precise issue. Furthermore, the authors believe that KAM is an interesting and appropriate field for such a review because it is widely implemented on business markets.

scholarly journals Determinants of Customer Benefits in Business-to-Business Markets: A Cross-Cultural Comparison

2005 ◽  
Vol 13 (3) ◽  
pp. 1-31 ◽  
Author(s):  
Christian Homburg ◽  
Sabine Kuester ◽  
Nikolas Beutin ◽  
Ajay Menon
Keyword(s):  
Cultural Differences ◽  
Cross Cultural ◽  
Cultural Comparison ◽  
Quality Service ◽  
Business Markets ◽  
International Context ◽  
Cross Cultural Comparison ◽  
Managerial Implications ◽  
The Impact ◽  
Business To Business

The authors examine the concept of customer benefits in business-to-business markets in an international context. They distinguish between core and add-on benefits, and they discuss product quality, service quality, flexibility, trust, joint action, and commitment of the supplier as determinants of these customer benefits. They base their analysis on 981 respondents in two countries. The results suggest the importance of understanding the determinants in providing customer benefits. Furthermore, the authors observe significant cultural differences with respect to the impact of different determinants on perceived customer benefits. Following a discussion of the results, the authors present managerial implications, research limitations, and directions for further research.

Partial Completion as a Nonprofit Strategy

2021 ◽  
Author(s):  
Can Zhang ◽  
Atalay Atasu ◽  
Karthik Ramachandran
Keyword(s):  
Nonprofit Organizations ◽  
Service Provision ◽  
Problem Definition ◽  
Product Service ◽  
Service Portfolio ◽  
Wide Range ◽  
Partial Completion ◽  
Innovative Solution ◽  
Managerial Implications ◽  
Level 3

Problem definition: Faced with the challenge of serving beneficiaries with heterogeneous needs and under budget constraints, some nonprofit organizations (NPOs) have adopted an innovative solution: providing partially complete products or services to beneficiaries. We seek to understand what drives an NPO’s choice of partial completion as a design strategy and how it interacts with the level of variety offered in the NPO’s product or service portfolio. Academic/practical relevance: Although partial product or service provision has been observed in the nonprofit operations, there is limited understanding of when it is an appropriate strategy—a void that we seek to fill in this paper. Methodology: We synthesize the practices of two NPOs operating in different contexts to develop a stylized analytical model to study an NPO’s product/service completion and variety choices. Results: We identify when and to what extent partial completion is optimal for an NPO. We also characterize a budget allocation structure for an NPO between product/service variety and completion. Our analysis sheds light on how beneficiary characteristics (e.g., heterogeneity of their needs, capability to self-complete) and NPO objectives (e.g., total-benefit maximization versus fairness) affect the optimal levels of variety and completion. Managerial implications: We provide three key observations. (1) Partial completion is not a compromise solution to budget limitations but can be an optimal strategy for NPOs under a wide range of circumstances, even in the presence of ample resources. (2) Partial provision is particularly valuable when beneficiary needs are highly heterogeneous, or beneficiaries have high self-completion capabilities. A higher self-completion capability generally implies a lower optimal completion level; however, it may lead to either a higher or a lower optimal variety level. (3) Although providing incomplete products may appear to burden beneficiaries, a lower completion level can be optimal when fairness is factored into an NPO’s objective or when beneficiary capabilities are more heterogeneous.

The Effects of Patent Extension and Take-Back Regulation on Green Pharmacy

2021 ◽  
Author(s):  
Tianqin Shi ◽  
Nicholas C. Petruzzi ◽  
Dilip Chhajed
Keyword(s):  
Pharmaceutical Industry ◽  
Social Welfare ◽  
Technical Information ◽  
Problem Definition ◽  
Theoretic Model ◽  
Innovative Company ◽  
Take Back ◽  
Starting Point ◽  
European Environmental Agency ◽  
Managerial Implications

Problem definition: The eco-toxicity arising from unused pharmaceuticals has regulators advocating the benign design concept of “green pharmacy,” but high research and development expenses can be prohibitive. We therefore examine the impacts of two regulatory mechanisms, patent extension and take-back regulation, on inducing drug manufacturers to go green. Academic/practical relevance: One incentive suggested by the European Environmental Agency is a patent extension for a company that redesigns its already patented pharmaceutical to be more environmentally friendly. This incentive can encourage both the development of degradable drugs and the disclosure of technical information. Yet, it is unclear how effective the extension would be in inducing green pharmacy and in maximizing social welfare. Methodology: We develop a game-theoretic model in which an innovative company collects monopoly profits for a patented pharmaceutical but faces competition from a generic rival after the patent expires. A social-welfare-maximizing regulator is the Stackelberg leader. The regulator leads by offering a patent extension to the innovative company while also imposing take-back regulation on the pharmaceutical industry. Then the two-profit maximizing companies respond by setting drug prices and choosing whether to invest in green pharmacy. Results: The regulator’s optimal patent extension offer can induce green pharmacy but only if the offer exceeds a threshold length that depends on the degree of product differentiation present in the pharmaceutical industry. The regulator’s correspondingly optimal take-back regulation generally prescribes a required collection rate that decreases as its optimal patent extension offer increases, and vice versa. Managerial implications: By isolating green pharmacy as a potential target to address pharmaceutical eco-toxicity at its source, the regulatory policy that we consider, which combines the incentive inherent in earning a patent extension on the one hand with the penalty inherent in complying with take-back regulation on the other hand, serves as a useful starting point for policymakers to optimally balance economic welfare considerations with environmental stewardship considerations.

Truthful Mechanisms for Medical Surplus Product Allocation

2020 ◽  
Vol 22 (4) ◽  
pp. 735-753 ◽  
Author(s):  
Can Zhang ◽  
Atalay Atasu ◽  
Turgay Ayer ◽  
L. Beril Toktay
Keyword(s):  
Private Information ◽  
Value Added ◽  
Information Provision ◽  
Problem Definition ◽  
Preference Ranking ◽  
Additional Increase ◽  
Healthcare Facilities ◽  
Selection Decisions ◽  
Managerial Implications ◽  
Recipient Selection

Problem definition: We analyze a resource allocation problem faced by medical surplus recovery organizations (MSROs) that recover medical surplus products to fulfill the needs of underserved healthcare facilities in developing countries. The objective of this study is to identify implementable strategies to support recipient selection decisions to improve MSROs’ value provision capability. Academic/practical relevance: MSRO supply chains face several challenges that differ from those in traditional for-profit settings, and there is a lack of both academic and practical understanding of how to better match supply with demand in this setting where recipient needs are typically private information. Methodology: We propose a mechanism design approach to determine which recipient to serve at each shipping opportunity based on recipients’ reported preference rankings of different products. Results: We find that when MSRO inventory information is shared with recipients, the only truthful mechanism is random selection among recipients, which defeats the purpose of eliciting information. Subsequently, we show that (1) eliminating inventory information provision enlarges the set of truthful mechanisms, thereby increasing the total value provision; and (2) further withholding information regarding other recipients leads to an additional increase in total value provision. Finally, we show that under a class of implementable mechanisms, eliciting recipient valuations has no value added beyond eliciting preference rankings. Managerial implications: (1) MSROs with large recipient bases and low inventory levels can significantly improve their value provision by appropriately determining the recipients to serve through a simple scoring mechanism; (2) to truthfully elicit recipient needs information to support the recipient selection decisions, MSROs should withhold inventory and recipient-base information; and (3) under a set of easy-to-implement scoring mechanisms, it is sufficient for MSROs to elicit recipients’ preference ranking information. Our findings have already led to a change in the practice of an award-winning MSRO.

Managing Congestion in Matching Markets

2021 ◽  
Author(s):  
Nick Arnosti ◽  
Ramesh Johari ◽  
Yash Kanoria
Keyword(s):  
Problem Definition ◽  
Theoretic Model ◽  
Matching Markets ◽  
Contact Potential ◽  
Managerial Implications ◽  
The Commons ◽  
Game Theoretic ◽  
Face Search ◽  
Uniqueness Of Equilibrium ◽  
Never Screened

Problem definition: Participants in matching markets face search and screening costs when seeking a match. We study how platform design can reduce the effort required to find a suitable partner. Practical/academic relevance: The success of matching platforms requires designs that minimize search effort and facilitate efficient market clearing. Methodology: We study a game-theoretic model in which “applicants” and “employers” pay costs to search and screen. An important feature of our model is that both sides may waste effort: Some applications are never screened, and employers screen applicants who may have already matched. We prove existence and uniqueness of equilibrium and characterize welfare for participants on both sides of the market. Results: We identify that the market operates in one of two regimes: It is either screening-limited or application-limited. In screening-limited markets, employer welfare is low, and some employers choose not to participate. This occurs when application costs are low and there are enough employers that most applicants match, implying that many screened applicants are unavailable. In application-limited markets, applicants face a “tragedy of the commons” and send many applications that are never read. The resulting inefficiency is worst when there is a shortage of employers. We show that simple interventions—such as limiting the number of applications that an individual can send, making it more costly to apply, or setting an appropriate market-wide wage—can significantly improve the welfare of agents on one or both sides of the market. Managerial implications: Our results suggest that platforms cannot focus exclusively on attracting participants and making it easy to contact potential match partners. A good user experience requires that participants not waste effort considering possibilities that are unlikely to be available. The operational interventions we study alleviate congestion by ensuring that potential match partners are likely to be available.

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