ISyE Seminar Series: Florin Ciocan

Florin Ciocan

"Price Delegation with Learning Agents"

Presentation by Professor Florin Ciocan
Assistant Professor of Technology and Operations Management
INSEAD

Wednesday, September 15
3:30-5:00 PM CST — Graduate Seminar and Reception (Zoom)
 

About the seminar:

Many firms delegate pricing decisions to sales agents that directly interact with customers. The premise behind this practice is that sales agents can gather informative signals about the customer's valuation for the product of interest. This information acquired through the interaction with the customer can then be used to make better pricing decisions. We study the underlying principal agent problem that arises in such situations, which we believe fills a void in the revenue management literature. In this setting, the agent can exert costly effort to learn a customer's valuation and decide on the price to quote to the customer, while the firm needs to offer a contract to the agent to induce the desired joint learning and pricing behavior. We analyze two versions of this problem: a baseline model where there is a single customer and a single good, and a generalization where there are multiple customers and goods with possible inventory/capacity limitations. For both problems, we find sequences of contracts that asymptotically achieve first best revenues even with limited liability, and shed light on the structure and implementation of such contracts. Under reasonable assumptions, these contracts can be implemented with commissions convex-increasing in revenues, and perform well under practical adjustments such as revenue share bounds on commissions.
 

Bio:

Florin Ciocan is an Assistant Professor of Technology and Operations Management at INSEAD. His research interests are in applications of revenue management to non-traditional domains such as online advertising and other Internet facilitated marketplaces. He is also interested in cloud-based optimization methods for massively sized datasets. Florin holds a BA degree in Applied Mathematics from Harvard College and a PhD in Operations Management from MIT.

 

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Start date
Wednesday, Sept. 15, 2021, 3:30 p.m.
End date
Wednesday, Sept. 15, 2021, 5 p.m.
Location

Zoom