Decision Science Digest: June 18, 2024

BALTIMORE, MD, June 18, 2024 –

EDITOR’S NOTE: Decision Science Digest is a periodic communique highlighting recent peer-reviewed research published by INFORMS, the largest association for the decision and data sciences, across its 17 journals. This issue highlights four press releases based on the findings of new peer-reviewed articles.

• Tailoring Ads to Consumers: How Facial Expression Software is Streamlining the Process (INFORMS journal Management Science)
• Teaming Up to Reach a Goal: New Research Proves Social Ties Improve Long-Standing Success (INFORMS journal Management Science)
• Predicting Deliveries: Fostering Trust with Consumers So They Buy Again, A New Model to Nail Down Product Delivery Dates (INFORMS journal Manufacturing & Service Operations Management)
• The Tesla Effect! The Impact of EV Charging Locations on Local Businesses (INFORMS journal Manufacturing & Service Operations Management)

Advertisers are Watching You! New Research Leverages Facial Expression Software to Personalize Ads

New research in the INFORMS journal Management Science develops a personalized ad display system by tracking consumer’s facial expressions in real time in response to various visual objects when they watch ads. The paper, “A Smart Ad Display System,” explains how the proposed system can make reasonably accurate inferences about a consumer’s ad preferences and make personalized recommendations utilizing facial expression and eye gaze stream data sourced from webcam-based video recordings. The researchers say the model enables a video ad display system to select and recommend ads that are likely to elicit favorable responses after a consumer watches only a single ad or even part of it. The favorable consumer responses elicited by the proposed model will enable video ad display system vendors to charge much higher prices to advertisers. Link to full article.

Teaming Up Has its Advantages – New Research Proves a Social Tie Promotes Success 

When pursuing goals, people commonly choose between going it alone versus teaming up. New research in the INFORMS journal Management Science says teaming up may provide better long-term success. In the paper, “Friends with Health Benefits: A Field Experiment,” researchers tested the benefits of rewarding individual versus tandem goal pursuit. They experimentally offered gym members an individual cash reward each day they visited the gym for four weeks. Participants in a tandem-reward condition could earn the same reward but only if they visit the gym with a friend. Although this additional requirement made it more difficult for participants in the tandem-reward condition to earn equivalent incentives, participants with this extra hurdle visited the gym about 35% more frequently than those earning a standard reward. The researchers also found that teaming up with incentives change behavior, including increased accountability and enjoyment. These findings illustrate the advantages of making desired behaviors social to promote follow-through. Link to full article.

Carefully Predicting Delivery Times: Overpromising Can Lead to Dissatisfaction, More Returns

Online retailers provide customers with a delivery estimate before they decide to make a purchase. On one hand, a faster delivery estimate could ensure more customers meet their deadlines and may increase their purchases. On the other hand, an aggressive estimate tends to overpromise, potentially leading to a longer than expected wait time, which can lower customer satisfaction and increase product returns. New research in the INFORMS journal Manufacturing & Service Operations Management looks at the effect of retailers’ delivery speed promise on customer behaviors and business performance. In the paper, “Sooner or Later? Promising Delivery Speed in Online Retail,” researchers collaborate with Collage.com and vary the disclosed delivery speed estimates online while keeping the physical delivery speed unchanged. They found that a faster promise increases sales and profits, but it also increases product returns and reduces customer retention. The researchers propose a data-driven model that uses the estimated parameters to optimize delivery promises to maximize customer lifetime value. Link to full article.

Strategically Placing EV Charging Stations: The Impact to Local Retailers

Using mobile visitation data from more than 21 million devices, new research in the INFORMS journal Manufacturing & Service Operations Management examines the business impact of installation of nearly 1,600 Tesla Superchargers in the U.S.. The paper, “Recharging Retail: Estimating Consumer Demand Spillovers from Electric Vehicle Charging Stations,” finds that these chargers bring a wealthier clientele to certain businesses, with approximately a 4% increase in monthly traffic. The researchers show that the impact is felt the most when placement is on the city outskirts and the charging is rapid (less than 20 minutes). Researchers say that in the long-run, retailers would benefit from paying for the charger installation through the revenue they can make from the spillover business. Link to full article.

About INFORMS 

As the largest professional association for the data and decision sciences, INFORMS members leverage mathematics and scientific methodologies to help organizations and governments at all levels make better, data-driven decisions. With more than 12,000 professional and student members from around the world, INFORMS members work to transform data into information, and information into insights that save lives, save money and solve problems. 

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Ashley Smith

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