The Interplay between Offer Size and Offer Deadline
Title：The Interplay between Offer Size and Offer Deadline
Speaker：Zhenyu Hu (National University of Singapore, Assistant Professor)
Host：WANG Shan (Lingnan College, Sun Yat-sen University, Assistant Professor)
Date and Time：December 27th , 2020 (15:00-16:00)
Location：Wang Daohan Conference Room, Lingnan Hall
Language：English+Chinese
Abstract:
We study a Stackelberg game involving a proposer (e.g., a retailer) and responder (e.g., a consumer). The proposer acts first by making an offer to the responder with a deadline, and the responder, following a continuous time finite-horizon search for alternative offers, has to respond to the offer by the deadline. We find that the proposer should offer a non-exploding offer when the alternative offer market is favorable to the responder. When the alternative offer market is unfavorable to the responder, the proposer can profit from making an exploding offer with a smaller size in a harsher market. We further study the case where the responder has private knowledge of the alternative offers' arrival rate. A sign up bonus type of contract can serve as a self-selection mechanism and we characterize the optimal contract.
Bio:
Zhenyu Hu is an assistant professor at the Department of Analytics & Operations of the NUS Business School, National University of Singapore. Prior to that, he received his Ph.D. in Industrial Engineering from the University of Illinois at Urbana-Champaign (UIUC), and he obtained his B.Sc. in Applied Mathematics from Sun Yat-sen University. He worked as a Research Summer Intern at IBM T.J. Watson Research Center in 2014. His research focuses on dynamic pricing, revenue management, inventory and supply chain management.
