Showing papers in "ERIM report series research in management Erasmus Research Institute of Management in 2010"

The Value of Optimization in Dynamic Ride-Sharing: a Simulation Study in Metro Atlanta

Abstract: Smartphone technology enables dynamic ride-sharing systems that bring together people with similar itineraries and time schedules to share rides on short-notice. This paper considers the problem of matching drivers and riders in this dynamic setting. We develop optimizationbased approaches that aim at minimizing the total system-wide vehicle miles and individual travel costs. To assess the merits of our methods we present a simulation study based on 2008 travel demand data from metropolitan Atlanta. The simulation results indicate that the use of sophisticated optimization methods instead of simple greedy matching rules may substantially improve the performance of ride-sharing systems. Furthermore, even with relatively low participation rates, it appears that sustainable populations of dynamic ride-sharing participants may be possible even in relatively sprawling urban areas with many employment centers.

What Do We Know about Social Entrepreneurship? An Analysis of Empirical Research

Abstract: Despite the growing attention to social entrepreneurship as a scholarly field of research, it is still in a stage of infancy. Research in the past two decades has been primarily dedicated to establishing a conceptual foundation, which has resulted in a considerable stream of conceptual papers. Empirical articles have gradually appeared since the turn of the century. Although they are still outnumbered by conceptual articles, empirical articles are of considerable significance for the evolution of social entrepreneurship as a field of scientific inquiry. The purpose of this paper is to gauge the current state of empirical research by reviewing 31 empirical research studies on social entrepreneurship, classifying them along four dimensions and summarising research findings for each of these dimensions. To serve this purpose in a meaningful fashion requires discriminating between different perspectives on social entrepreneurship. Hence, a conceptual overview with four different schools of thought is presented, and the articles in our sample are analysed accordingly.

Rescheduling of Railway Rolling Stock with Dynamic Passenger Flows

Abstract: textTraditional rolling stock rescheduling applications either treat passengers as static objects whose influence on the system is unchanged in a disrupted situation, or they treat passenger behavior as a given input. In case of disruptions however, we may expect the flow of passengers to change significantly. In this paper we present a model for passenger flows during disruptions and we describe an iterative heuristic for optimizing the rolling stock to the disrupted passenger flows. The model is tested on realistic problem instances of NS, the major operator of passenger trains in the Netherlands.

Sustainable Passenger Transportation: Dynamic Ride-Sharing

Abstract: textRide-share systems, which aim to bring together travelers with similar itineraries and time schedules, may provide significant societal and environmental benefits by reducing the number of cars used for personal travel and improving the utilization of available seat capacity. Effective and efficient optimization technology that matches drivers and riders in real-time is one of the necessary components for a successful ride-share system. We formally define dynamic ride-sharing and outline the optimization challenges that arise when developing technology to support ride-sharing. We hope that this paper will encourage more research by the transportation science and logistics community in this exciting, emerging area of public transportation.

Drivers of Sales Performance: A Contemporary Meta-Analysis

Abstract: textIt has been twenty-five years since the publication of a comprehensive review of the full spectrum of sales-performance drivers. This study takes stock of the contemporary field and synthesizes empirical evidence from the period 1982–2008. The authors revise the classification scheme for sales performance determinants devised by Walker, Churchill, and Ford (1977) and estimate both the predictive validity of its sub-categories and the impact of a range of moderators on determinant-sales performance relationships. Based on multivariate causal model analysis, the results make two major observations: (1) Five sub-categories demonstrate significant relationships with sales performance: selling-related knowledge (β=.28), degree of adaptiveness (β=.27), role ambiguity (β=-.25), cognitive aptitude (β=.23) and work engagement (β=.23). (2) These sub-categories are moderated by measurement method, research context, and sales-type variables. The authors identify managerial implications of the results and offer suggestions for further research, including the conjecture that as the world is moving toward a knowledge-intensive economy, salespeople could be functioning as knowledge-brokers. The results seem to back this supposition and indicate how it might inspire future research in the field of personal selling.

Consumer Acceptance of Recommendations by Interactive Decision Aids: The Joint Role of Temporal Distance and Concrete vs. Abstract Communications

Abstract: textInteractive decision aids (IDAs) typically use concrete product feature-based approaches to interact with consumers. Recently however, interaction designs that focus on communicating abstract consumer needs have been suggested as a promising alternative. This article investigates how temporal distance moderates the effectiveness of these two competing IDA communication designs by its effect on consumers’ mental representation of the product decision problem. Temporal distance is inherently connected to IDAs in two ways. Congruency between consumption timing (immediate vs. distant) and IDA communication design (concrete vs. abstract, respectively) increases the likelihood to accept the IDA’s advice. This effect is also achieved by congruency between IDA process timing (immediate vs. delayed delivery of recommendations) and IDA communication design (concrete vs. abstract, respectively). We further show that this process is mediated by the perceived transparency of the IDA process. Managers and researchers need to take into account the importance of congruency between the user and the interface through which companies interact with their users and can further optimize IDAs so that they better match consumers’ mental representations.

Reinventing Strategic Philanthropy: the sustainable organization of voluntary action for impact

Abstract: textPhilanthropic organizations have recently started to focus on how to invest their resources in a way that will really make a difference to society. Strategic philanthropy is the new concept for voluntary action for the public good to create a valuable sustainable impact! This inaugural address presents the future research agenda of the Erasmus Centre for Strategic Philanthropy and focuses on three (strategic) challenges faced by philanthropic organizations: 1) sustaining philanthropic commitment, 2) selecting and executing programmes, and 3) examining the role of management and boards. These are the linking pin between the first two challenges. Governance, accountability and organizational effectiveness are essential for management and boards of individual organizations and for the philanthropic sector as a whole. In the first strategic challenge, philanthropic commitment is seen as a natural resource and Ostrom’s (1990) eight design principles for managing ‘common pool resources’ are applied to philanthropic commitment. The second strategic challenge focuses on the results chain for programme management while the role of management and boards is analyzed from the perspective of ‘resource exchange partnerships’ in the third challenge. Cooperation, especially with the business world, is presented as essential for creating sustainable impact in society.

Smart Grid Economics: Policy Guidance through Competitive Simulation

Abstract: Sustainable energy systems of the future will need more than efficient, clean, low-cost, renewable energy sources; they will also need efficient price signals that motivate sustainable energy consumption as well as a better real-time alignment of energy demand and supply.

Does Contract Complexity Limit Opportunities? Vertical Organization and Flexibility

Abstract: textThe vertical organization of production entails a range of make-or-buy decisions of intermediate goods that are influenced by the difficulty of writing contracts with a potential supplier. When contracting causes high transaction costs, a firm can decide to vertically integrate the production of the intermediate product. Contract complexity can be measured by decomposing the range of inputs into inputs that are traded on an exchange (low contract complexity), inputs for which reference prices exist (low to medium contract complexity) and other, often relationship-specific inputs (medium to high contract complexity). This inaugural lecture addresses the impact of contract complexity on the growth opportunities of a firm. The present value of growth opportunities are embedded in the market value of a firm, which is a multiple of the firm’ stock price. Examining the relation between the growth opportunities as part of the market value and contract complexity, we find that contract complexity has a negative impact on the growth opportunities of a firm if vertical integration is difficult. Whereas, on average, growth opportunities account for 56% of the market value of a firm, this percentage ranges between 50% and 53% for firms in sectors where contracts are complex and vertical integration is difficult. The difference represents a current market value between € 12 bn. and € 24 bn. only taking into account Dutch listed firms.

A Conceptual Model of Investor Behavior

Abstract: Behavioral finance is a subdiscipline of finance that uses insights from cognitive and social psychology to enrich our knowledge of how investors make their financial decisions. Agent-based artificial financial markets are bottom-up models of financial markets that start from the micro level of individual investor behavior and map it into the macro level of aggregate market phenomena. It has been recognized in the literature, yet not fully explored, that such agent-based models are very suitable tool to generate or test various behavioral hypotheses. To pursue this research idea, first we develop a conceptual model of individual investor that consists of a cognitive model of the investor and a description of the investment environment. In the modeling tradition of cognitive science and intelligent systems, the investor is seen as learning, adapting, and evolving entity that perceives the environment, processes information, acts upon it, and updates its internal states. This conceptual model can be used to build stylized representations of (classes of) individual investors, and further studied within the paradigm of agent-based artificial financial markets.

An Admiralty for Asia: Isaac le Maire and conflicting conceptions about the corporate governance of the VOC

Abstract: The Dutch East India Company or VOC in 1602 showed many characteristics of modern corporations, including limited liability, freely transferable shares, and well-defined managerial functions. However, we challenge the notion of the VOC as the precursor of modern corporations to argue that the company was a hybrid, combining elements from traditional partnerships with a governance structure modeled on existing public-private partnerships. The company’s charter reflected this hybrid structure in the preeminent position given to the Estates General as the VOC’s main principal, to the detriment of shareholders’ interests. Protests by Isaac le Maire and Willem Usselinx about the board’s disregard for shareholders rooted in a conviction that it ought to conform to traditional partnerships with their judicious balance between stakeholders’ interests. However, the perceived public interest of a strong military presence in Asia prevented shareholders’ protests from changing the corporate governance.

Human Factors: Spanning the Gap between OM & HRM

Abstract: textPurpose: This paper examines the claim that the application of human factors (HF) knowledge can improve both human well-being and operations system performance. Methodology: A systematic review was conducted using a general and two specialist databases to identify empirical studies addressing both human effects and operations system effects in examining manufacturing operations system design aspects. Findings: We found 45 empirical studies addressing both the human effects and system effects of operations system (re)design. Of those studies providing clear directional effects, 95% showed a convergence between human effects and system effects (+,+ or -,-), 5% showed a divergence of human and system effects (+,- or -,+). System effects included quality, productivity, implementation performance of new technologies, and also more ‘intangible’ effects in terms of improved communication and co-operation. Human effects included employee health, attitudes, physical workload, and ‘quality of working life’. Research limitations/implications: Future research should attend to both human and system outcomes in trying to determine optimal configurations for operations systems as this appears to be a complex relationship with potential long-term impact on operational performance. Practical implications: The application of HF in operations system design can support improvement in both employee well-being and system performance in a number of manufacturing domains. Originality/value: This paper outlines and documents a research and practice gap between the fields of HF and OM research that has not been previously discussed in the management literature. This gap may be inhibiting the design of operations systems with superior long term performance.

Perceptual maps: the good, the bad and the ugly

Abstract: textPerceptual maps are often used in marketing to visually study relations between two or more attributes. However, in many perceptual maps published in the recent literature it remains unclear what is being shown and how the relations between the points in the map can be interpreted or even what a point represents. The term perceptual map refers to plots obtained by a series of different techniques, such as principal component analysis, (multiple) correspondence analysis, and multidimensional scaling, each needing specific requirements for producing the map and interpreting it. Some of the major flaws of published perceptual maps are omission of reference to the techniques that produced the map, non-unit shape parameters for the map, and unclear labelling of the points. The aim of this paper is to provide clear guidelines for producing these maps so that they are indeed useful and simple aids for the reader. To facilitate this, we suggest a small set of simple icons that indicate the rules for correctly interpreting the map. We present several examples, point out flaws and show how to produce better maps.

AUK: a simple alternative to the AUC

Abstract: The area under Receiver Operating Characteristic (ROC) curve, also known as the AUC-index, is commonly used for ranking the performance of data mining models. The AUC has many merits, such as objectivity and ease of interpretation. However, since it is class indifferent, its usefulness while dealing with highly skewed data sets is questionable, to say the least. In this paper, we propose a simple alternative scalar measure to the AUCindex, the Area Under an Kappa curve (AUK). The proposed AUK-index compensates for the above basic flaw of the AUC by being sensitive to the class distribution. Therefore it is particularly suitable for measuring classifiers’ performance on skewed data sets. After introducing the AUK we explore its mathematical relationship with the AUC and show that there is a nonlinear relation between them.

Intelligent Personalized Trading Agents that facilitate Real-time Decisionmaking for Auctioneers and Buyers in the Dutch Flower Auctions

Abstract: In this case the Dutch Flower Auctions (DFA) are discussed. The DFA are part of the supply network in which flowers are produced, stocked, and then sold through either mediation or auctioning. This case focuses on the buyers’ and auctioneers’ positions when flowers are traded through auctions. This case deals with the application of personalized agents as part of a Decision Support System which empowers the decision maker. The decision makers discussed in this case are the auctioneers who control the auction process, and the buyers who bid at the clock auction. Agents are defined as software programs that sense their environment and react autonomously on their environment in order to maximize a certain outcome. The agents, as envisioned in this case, are able to determine users’ preferences and based on these preferences agents can proactively make recommendations. Agents as applied to the auction process could empower the auctioneers in their decisions. Another type of agent could empower the buyer, since buyers have the high-pressure task of buying at the clock auction.

The Value of Information in Container Transport: Leveraging the Triple Bottom Line

Abstract: Planning the transport of maritime containers from the sea port to final destinations while using multiple transport modes is challenged by uncertainties regarding the time the container is released for further transport or the transit time from the port to its final destination. This paper assesses the value of information in container transport in terms of multiple performance dimensions, i.e. logistics costs, reliability, security, and emissions. The analysis is done using a single period model where a decision maker allocates arriving containers to two transport modes (slow, low price, no flexible departure times, versus fast, high price, flexible departure times). We construct a frontier of Pareto optimal decisions under each of the information scenarios and show that these frontiers move in a favorable direction when the level of information progresses. Each of the Pareto frontiers help strike the balance between the aforementioned performance dimensions. The mathematical results are illustrated using two numerical examples involving barge transport and train transport.

How Embodied Cognitions Affect Judgments: Height-Related Attribution Bias in Football Foul Calls

Abstract: textMany fouls committed in football (called soccer in some countries) are ambiguous, and there is no objective way of determining who is the “true” perpetrator or the “true” victim. Consequently, fans as well as referees often rely on a variety of decision cues when judging such foul situations. Based on embodiment research, which links perceptions of height to concepts of strength, power, and aggression, we argue that height is going to be one of the decision cues used. As a result, people are more likely to attribute a foul in an ambiguous tackle situation to the taller of two players. We find consistent support for our hypothesis, not only in field data spanning the last seven UEFA Champions League and German Bundesliga seasons, as well as the last three FIFA World Cups, but also in two experimental studies. The resulting dilemma for refereeing in practice is discussed.

Entrepreneurial Finance in France: The Persistent Role of Banks

Abstract: textWe study financial constraints new firms suffer from in France during the mid-nineties. Three types of constraints are distinguished: the classic and well-known weak and strong credit rationing and the new concept of self-rationing bound to the theory of discouraged borrowers. We look for these constraints on a sample of new firms which survived at least 3 years during the mid-nineties. Empirical findings show credit constraints as a whole concern 41.96% of the sample and a very low proportion of new firms suffer from credit rationing “a la Stiglitz-Weiss”. Weak credit rationing and self-rationing, caused by discouragement, are more widespread among French new firms. We highlight moreover the role of banks during the post-start up stage even if firms have suffered from credit rationing at the beginning of their life. Results not only suggest the absence of firms’ path of exclusion on the credit market but the rent expropriation by banks.

MIPLIB Truckload PDPTW Instances Derived from a Real-World Drayage Case

Abstract: This paper describes five sets of 33 Mixed Integer Problem instances each, for a total of 165 instances, derived from a real-world full-truckload pick-up and delivery problem with time windows at the Port of Rotterdam. These instances represent 33 individual days of data encompassing 65 jobs and 40 trucks. We report, in this paper, on the structure of the real-world problem, the mechanism by which the real data was transformed into the test instances, the Mixed Integer Programming formulation used to solve these instances, the results obtained, and sources in the literature describing alternative uses for these instances.

Finding the Influentials that Drive the Diffusion of New Technologies

Abstract: textIn this article we put forward a model where aggregate sales are a function of the online search of potential consumers at many locations. We argue that a location may be influential because of its power to drive aggregate sales and this power may be dynamic and evolving in time. Second, the influential locations may produce spillover effects over their neighbors and hence we may observe clusters of influence. We apply Bayesian Variable Selection (BVS) techniques and we use Multivariate Conditional Autoregressive Models (MCAR) to identify influentials locations and their clustering. Our results indicate that the influential locations and their economic value (measured by search elasticities) vary over time. Moreover, we find significant geographical clusters of influential locations and the clusters composition varies during the life-cycle of the consoles. Finally, we find weak evidence that demographics explain the probability of a location to be influential.

Deviation Among Technology Reviews: An Informative Enrichment of Technology Evolution Theory for Marketing

Abstract: textUnderstanding technological change is of critical importance to marketers, as it bears new markets, new brands, new customers, and new market leaders. This paper examines the deviation among reviews of a technology’s performance and its consequences for inferences on technology evolution patterns. The basic premise of the current paper is that technology evolution literature, while highly relevant, is misguided in that it ignores potential deviation among technology reviews. Using a comprehensive dataset of all published reviews, both before and after FDA approval, of 7 statins for cholesterol reduction (LDL) from 1982 to 2007, the authors find that: (1) there exists vast deviation among reviews of technology performance leading to systematic bias in the portrayal of the path of technology evolution, especially if one relies only on manufacturer’s claims, (2) such deviation does not fade over time, (3) technology review (study design) characteristics affect the stated performance and, (4) both higher technology performance and a higher deviation affect sales positively, also when one controls for a firm’s marketing expenditures. We discuss the implications of these findings for technology evolution theory, managerial practice and public policy.

Global Diffusion of the Non-Traditional Banking Model and Alliance Networks: Social Exposure, Learning and Moderating Regulatory Effort

Abstract: textWe analyze the impact of (alliance) network exposure on the speed and extent of adoption of the business model as being one explanatory factor for diffusion controlling for actor specific characteristics and embeddedness in the network. In order to explain how existing national regulation moderated this relationship and whether it succeeded in its risk-limiting mission by moderating global adoption patterns and risk-bearing behavior among financial institutions we estimate various history event analysis model i.e. standard Cox and extended frailty models. We find strong support for the role of network exposure rather than social learning, the impact of regulatory effort on patterns of adoption and the role of country clusters for diffusion in the financial sector.

House Prices, Bubbles and City Size

Abstract: We build a theoretical model that relates house price, city size and the expected future growth of demand for housing. Our model combines the Alonso-Mills model on urban economics with insights from financial economics on house prices. Estimating the model for cities in the US, we empirically validate the positive effect of city size on urban house prices. Moreover, our estimations confirm that an (unrealistic) increase in the expected growth of demand fuelled by the widespread availability of credit provides a better explanation for the recent bubble than inelastic housing supply that explained earlier bubbles.

Do Charities Get More when They Ask More Often? Evidence from a Unique Field Experiment

Abstract: textCharitable organizations send out large volumes of direct mailings, soliciting for money in support of many good causes Without any request, donations are rarely made, and it is well known that each request for money by a charity likely generates at least some revenues Whether a single request from a charity increases the total amount donated by an individual is however unknown Indeed, a response to one request can hurt responses to others The net effect is therefore not easily observable, certainly not when multiple charities address the same individuals In this paper we alleviate these observational difficulties by carrying out a field experiment in which five large charities cooperate With the unique data that we collect, we study the impact of sending more requests on total donations The results indicate that there is a negative competitive effect on requests from other charities, but this effect dies out rapidly Soon after the mailing has been sent, it is only a strong cannibalization of the charity’s own revenues that prevails This empirical finding suggests the important conclusion that not much coordination across charities is needed to increase revenues We also demonstrate that charities need sophisticated evaluation tools that do not ignore the effects of cannibalization

Within- and Between-group Agreement in Supervisor's Evaluative Behaviours: Do evaluative 'styles' exist?

Abstract: textSeveral management accounting studies have investigated the behavioural impact of evaluative style, a concept that generally refers to the manner in which supervisors use accounting information to evaluate the performance of subordinates. Although most studies study this behavioural impact at the individual level of the subordinate, the term “evaluative style” suggests that evaluative behaviours and attitudes of single supervisors will show (some) consistency across subordinates. This paper investigates whether “evaluative styles” exist by examining within-group and between-group agreement in evaluative behaviours by subordinates reporting to the same supervisor. The findings from two empirical studies indicate that evaluative behaviours in both organisations show both within-group and between-group variability. These findings suggest that evaluative behaviours of supervisors are more appropriately analysed at the level of individual subordinates than at the level of groups, although a dyadic level of analysis should be considered as well. An implication of these findings is that the concept of “evaluative style” is misleading. A suggestion is made to use the term “evaluatorship” instead as an umbrella concept to refer to evaluative behaviours and attitudes of supervisors at different levels of analysis in future research.

Modeling Seasonality in New Product Diffusion

Abstract: textAlthough high frequency diffusion data is nowadays available, common practice is still to only use yearly figures in order to get rid of seasonality. This paper proposes a diffusion model that captures seasonality in a way that naturally matches the overall S-shaped pattern. The model is based on the assumption that additional sales at seasonal peaks are drawn from previous or future periods. This implies that the seasonal pattern does not influence the underlying diffusion pattern. The model is compared with alternative approaches through simulations and empirical examples. As alternatives we consider the standard Generalized Bass Model and ignoring seasonality by using the basic Bass model. One of our main findings is that modeling seasonality in a Generalized Bass Model does generate good predictions, but gives biased estimates. In particular, the market potential parameter will be underestimated. Ignoring seasonality gives the true parameter estimates if the data is available of the entire diffusion period. However, when only part of the diffusion period is available estimates and predictions become biased. Our model gives correct estimates and predictions even if the full diffusion process is not yet available.

The Launch Timing of New and Dominant Multigeneration Technologies

Abstract: textIn this paper we introduce a model that is suitable to study the diffusion of new and dominant multi-generation technologies. Examples are computer operat- ing systems, mobile phone standards, video game consoles. Our model incorporates three new features that are not included in related models. First, we add the ability of a firm to transfer users of its old technologies to the new generations, what we call firms’ alpha. Second, we add competitive relations between market technolo- gies. Third, the launch strategies diagnosed by our model cover, as special cases, the now or never strategies and hence it is suitable to study intermediate launch strategies. We find that the appropriate timing of a new technology depends heavily on both the firms’ alphas and on the competitive positioning of their products. In addition, we argue that the strategic interaction of firms may lead to very different sales outcomes depending on the competitive positioning of their products. In the VGC case we find that the Nintendo Wii was launched at an appropriate moment while the Sony PS3 perhaps should have never been launched.

The Influence of Installed Technologies on Future Adoption Decisions: Empirical Evidence from E-Business

Abstract: textThis paper studies the adoption times of various e-business technologies in a large sample of firms from 10 different industry sectors and 25 European countries between 1994 and 2002. The results show that the probability of adoption increases with the number of previously adopted e-business technologies. Hence, the more advanced a firm is in using e-business technologies, the more likely it is to adopt additional e-business technologies, provided technologies do not substitute each other in their functionalities. This result is relevant for the marketing of new technologies, strategic planning and, from an economic perspective, for the convergence of growth across regions.

Visualization of Ship Risk Profiles for the Shipping Industry

Abstract: textThis article uses correspondence analysis to visualize risk profiles and their changes over the time period 1977 to 2008. It is based on a unique dataset which combines incident data and ship particular data. The risk profiles can help stakeholders better understand the relationship of ship particulars, casualty types, incident locations, loss of life and pollution and link the results to developments of the legislative framework. The results demonstrate that the fleet improved their risk profiles over time reflecting legislative measures, port state control and vetting inspections. Older, general cargo ships flagged by black listed flags are most likely to be wrecked, stranded or grounded and remain risk prone towards flooding, foundering and capsizing. Some trading areas characterized by inter-regional trade operating outside the legislative framework remain risk prone. Most incidents do not involve loss of life or pollution. In terms of absolute figures, high risk prone areas for loss of life are the North and South China Sea, Japan and South Korea, the Mediterranean, Red and Black Sea and the Arabian Gulf. Casualty types which are more likely to lead to higher loss of life are flooding, foundering and capsizing on vessels which are flagged with black listed flags. For pollution, most oil pollution occurred in the area of the British Isles, the North Sea, the English Channel and the Bay of Biscay. High pollution quantities are more likely to be found due to collision and the vessel being wrecked, stranded and grounded than with other casualty types.

A Model for Evaluating Pharmaceutical R&D Investment Projects under Technical and Economic Uncertainties

Abstract: This study sets up a compound option approach for evaluating pharmaceutical R&D investment projects in the presence of technical and economic uncertainties. Technical uncertainty is modeled as a Poisson jump that allows for failure and thus abandonment of the drug development. Economic uncertainty is modeled as a standard di¤usion process which incorporates both up-and downward shocks. Practical application of this method is emphasized through a case analysis. We show that both uncertainties have a positive impact on the R&D option value. Moreover, from the sensitivity analysis, we …nd that the sensitivity of the option with respect to economic uncertainty and market introduction cost decreases when technical uncertainty increases.