1. Linking Delay Announcements, Abandonment, and Staffing: A Behavioral Perspective
Status: Working Paper Available
Collaborators: Qiuping Yu, Kurt Bretthauer
Abstract: Using field data from a bank’s call center, we study the behavioral determinants of customers’ queue abandonment decisions in the presence of delay announcements. We relax traditional behavioral assumptions on how customers should make abandonment decisions and empirically explore how customers actually behave. Our flexible model can account for multiple delay announcements, reference-dependent behavior, sunk costs in time, and heterogeneity in customer patience. We show that customers exhibit loss aversion with respect to time losses in queue, becoming much more likely to abandon if forced to wait longer than the announced waiting time. We also find that customers may fall for the sunk cost effect, becoming less likely to abandon with more time sunk waiting in queue. Additionally, we find that longer announced wait times increase customer abandonment behavior and that customers are often strategic in their arrival decisions, with impatient customers avoiding the busy time of day. In a counterfactual study, we show that, by accounting for our behavioral insights, firms may significantly reduce their staffing levels without increasing customers’ overall waiting time.
o Finalist, Best Student Paper, Service Science Section of INFORMS, 2017
o INFORMS Annual Meeting, Houston, TX, 2017 (Service Science Student Paper Finalist Section)
o INFORMS Annual Meeting, Nashville, TN, 2016
o Behavioral Operations Conference, Madison, WI, 2016
o POMS Annual Meeting, Orlando, FL, 2016
o INFORMS Annual Meeting, Philadelphia, PA, 2015
o Seminar at the Kelley School of Business, Indiana University, Bloomington, IN, 2015
2. The Priming Effects of Relevant and Irrelevant Advertising in Online Auctions
Status: Working Paper
Collaborators: Alan Dennis, Christine Hsieh, Xuan Feng, and Ivy Yuan
Abstract: Most research on online auctions has focused on deliberate rational cognition, yet recent research in psychology suggests that much of human behavior is influenced by nonconscious automatic cognition. Priming is the presentation of stimuli intended to influence nonconscious cognition, leading to changes in behavior. We conducted two experiments to investigate the impact of priming delivered through what appeared to be advertisements on individuals’ willingness to pay in online auctions. We found that the price of the product in the priming advertisement influenced the amount bid, whether the advertised product was relevant to the product bid upon on not. The effect was large for relevant products, thus showing the impact of deliberate rational cognition. The effect was small but significant for irrelevant products, thus showing the impact of nonconscious cognition.
Work in Progress