Empirical Studies on Service Operations in New Technologies

KARACAOGLU Garro Beraza, Nil

doi:https://doi.org/10.21985/n2-rtxr-p966

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Empirical Studies on Service Operations in New Technologies

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This dissertation contains four essays. The first essay, Strategically Giving Service: The Effect of Real-Time Information on Service Efficiency, analyzes the impact of the increased availability of real-time information on the behavior of strategic agents and the implications of this phenomenon for service efficiency using data from one of the leading e-hailing taxi platforms in South America. It empirically studies the real-time reactions of agents to the dynamic entry of new competitors into their service zones in e-hailing platforms. We find that the net response to real-time information indicating the entry of new competitors in a service zone is an increase in the scattering of agents previously in that service zone. The response is not homogeneous, as some agents are more likely than others to respond to entry. We find that those agents who are more likely to scatter in reaction to the real-time entry of competitors achieve higher utilization. We investigate the consequences of this behavior for the efficiency of service systems. In the second essay, Need for Speed: Impact of Website Performance on Online Retailers, we leverage novel retail and website performance data to investigate the impact of website performance on online sales using two different research designs---panel data with fixed effects and generalized synthetic control with elastic net. Our results show that a 1 percent slowdown in website speed decreases the sales of the retailer by 0.26 percent. Slowdowns undermine retailers' quest to turn website traffic into sales as well. Moreover, our results show that customers are more sensitive to website slowdowns in mobile channel compared to the desktop channel. In the third essay, Whether Weather Matters, we shed light on the impact of an exogenous factor---weather conditions---on retailers' B&M store and online sales as well as on customers' channel choice. Using online and B&M store data from a worldwide winter apparel retailer and daily weather and climate normals data at the zip code level, we find the following: (1) Negative (positive) temperature deviations, i.e., cold (hot) days, lead to a significant increase (decrease) in sales both for online and offline channels. The effects are stronger for the offline channel. (2) Cold days induce customers to migrate to the offline channel, whereas hot days and snowy days lead them to purchase through the online channel. Moreover, our findings indicate that although weather significantly affects retailers’ store traffic and sales, retailers' staffing practices are suboptimal; they understaff on cold days and overstaff on hot days. Finally, the fourth essay, Dynamic Pricing and Transparency in On-Demand Services, looks into how operational transparency can influence customers' fairness perception and satisfaction in the context of dynamic pricing. We adapt theories on fairness perceptions, satisfaction, and pricing from the psychology, marketing, and economics literature to on-demand services and test them in an operational context with a series of experiments that simulate the experience of requesting a ride through a ride-sharing application. We find that customers willingly trade-off price and service quality, as measured by time. Moreover, our findings indicate that the effects of operational transparency on customers' perceptions are nuanced. Supply transparency might have a detrimental impact on customers' perceptions: we find that customers' fairness perceptions are adversely affected when they observe a low supply level. By contrast, surcharge transparency enhances customers' experiences under dynamic pricing: rather than hiding the surcharges and displaying just the total fare of a trip, being transparent about the surcharges, enhances customers' perceptions especially the price increases are low. We further find that surcharge transparency improves purchase intentions.

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