Hitting the Information Sweet Spot
In the fast-growing field of information design, ISyE Associate Professor Krishnamurthy Iyer examines how revealing the right information at the right time yields better outcomes.
The rapid growth of big data, e-commerce, and computing power has led to questions of what, when, and how much data companies and organizations should share with users. The inelegant solution is often an “all or nothing” approach in which information is either fully disclosed or kept hidden.
However, ISyE Associate Professor Krishnamurthy Iyer envisions a more strategic approach. One where well-crafted information design reveals the correct amount of data to benefit everyone. Iyer’s recent work examining information design in spatial resource competition examines this problem head-on.
“Sharing information may not always bring higher welfare if the information is not released in a careful way,” says Iyer. “If a football game is about to finish and Uber informs every available driver, too many drivers may flood the area and many of them will fail to find a customer due to oversupply. It might be wiser for the platform to only inform a particular group of drivers to better match supply and demand.”
While understanding the need to selectively release information may be simple, the nuances of deciding which information to share can be extremely complex. In the scenario where Uber notifies drivers about a football game ending, drivers may rush to the stadium and affect the entire network. Each driver’s decision about what action to take could be influenced by many factors, including the dynamics at each pick-up location, the driver’s beliefs about the state of the system, and more.
Much of Iyer’s work in information design aims to provide a framework for mathematical models. These models are what platforms and services can use to discover what the correct balance between too much and too little information looks like.
“There is a great deal of work to be done in this area,” says Iyer. “Many models have a lot of assumptions, and a lot of potential applications for information design have yet to be investigated. Our task is figuring out how to share information when you don’t know exactly how the user will respond.”
Online sharing platforms such as Etsy and YouTube also struggle with incomplete information. When new content is added to these platforms, they don’t initially know the quality or relevance of the content. This issue became the focus of Iyer’s research with ISyE doctoral student You Zu.
“Instead of knowing the quality and relevance of new content, YouTube has to learn the quality over time and decide whether or not to recommend it,” says Zu. “We proposed an efficient algorithm for this type of incomplete information that can provide benefits including increased sales, fewer returns, and improved user satisfaction.”
Better Business with Information Design
Retail businesses are particularly interested in information design as a way to maximize their profits. Providing online shoppers access to more data can oftentimes inform their purchasing decisions. However, the amount of information retailers provide varies widely.
Retailers such as Amazon tell customers an exact number of items remaining when inventory is low, while others only indicate “low stock” to encourage customers to buy sooner.
Recently, Iyer worked on a project to determine how retailers can credibly communicate inventory and demand information to customers in a way that maximizes their revenue. He considered questions such as: How are sales affected by all information shared versus no information? Are retailers better off sharing information privately with specific users or publicly? Analyzing questions like these led Iyer to develop a model that could benefit all types of online retailers.
“Often, retailers want to sell their inventory before the price of an item drops,” says Iyer. “A common example of this is fashion, where summer items are sold on clearance after fall arrives. The model we constructed shows that sending a publicly visible signal such as a low inventory indicator results in a substantial increase in revenue compared to the full-information or no-information scenarios.”
"With information design, we’re able to go beyond the individual user and shape a positive effect for the network as a whole."
—ISyE Associate Professor Krishnamurthy Iyer
Serving the Greater Good
Social services such as public housing, freeways, and emergency rooms can also benefit immensely from well-designed information systems.
Consider this example: It’s a busy Saturday at the local urgent care when two potential patients walk through the door; the first is a young girl and her mother—the girl has a deep cut on her forehead that will likely need stitches—and the second is a man with an itchy rash on his arm. In the lobby, they see a digital screen displaying a wait of 30 to 45 minutes to see a doctor. The mother knows her daughter’s cut is urgent and opts to wait, while the man decides he has better things to do and will call his family doctor on Monday.
“When done strategically, displaying wait times in an emergency clinic is a great example of effective information design,” says Iyer. “Upon arriving, users are deciding whether to wait for a service or leave and seek an outside option. By displaying wait times, the clinic can reduce congestion and improve outcomes by persuading more low-need users to seek outside options and therefore better serve high-need users.”
Based on their findings, Iyer and his research partner Vahideh Manshadi, a professor at Yale School of Management, believe information can play a promising role in improving congested social services.
“We found that sharing coarsened information about the congestion level not only improves the welfare of high-need users, but also that of low-need ones by inducing a belief that the congestion level might be high in times of moderate congestion and thereby persuading away users with less severe needs,” says Manshadi. “This work is the first of its kind and will provide important managerial insights into designing more effective information-sharing platforms, such as dashboard programs.”
Iyer believes information design has the potential to shape a better future: one with less waiting in line, less traffic congestion, greater profits for businesses, better matching of service providers to service users, and greater access to services for those with the greatest need.
“With good information design we’re able to go beyond the individual user and shape a positive effect for the network as a whole,” says Iyer. “The result is that in the end, everyone is better off.”
Story by: Megan Tsai