Decision Science Digest: March 29, 2023

BALTIMORE, MD, March 29, 2023 –

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.

• Online Auction Sales Determined by Length of Time Item is Available, Length of Item Description (INFORMS journal Information Systems Research)
• Setting Healthy Consumption Goals Isn’t a Losing Scenario for Businesses: While it May Reduce Sales, Profits Increase (INFORMS journal Management Science)
• Saving Up or Cashing Out: The Impact Employer Decisions Have on Employee Retirement Decisions (INFORMS journal Marketing Science)
• New Research Looks at the Ripple Effects of Ads on Presidential Elections (INFORMS journal Management Science)

Auction Length and Item Description Determine Likelihood of Online Sales

Online auctions services such as eBay are popular with consumers. Auction time and item descriptions play a big role in responses and ultimately, sales. A new study in the INFORMS journal Information Systems Research finds that shorter auction durations and item descriptions help screen low-quality bidders and lead to higher contracting probabilities and buyer utility from the winning bid. Long auction durations and item descriptions have negative effects on project contracting and buyer utility. The study, “The Screening Role of Design Parameters for Service Procurement Auctions in Online Service Outsourcing Platforms,” finds that a 10% increase (1 day) in the auction duration reduces the average success rate by 0.36%. In addition, a 10% increase (10 words) in the item description length decreases the average success rate by 0.52%. Link to full article.

Setting Healthy Boundaries: Reduces Sales, Increases Profits

Helping consumers set boundaries might be better for a company’s bottom line. New research in the INFORMS journal Management Science finds that if consumers can exercise better self-control by setting consumption goals, then they would not totally avoid the product but consume it in small quantities. Take chocolate as an example, rather than avoid it altogether, if consumers can have healthy boundaries, they may still purchase it instead of not buying it at all. In this example, the firm no longer needs to rely on very low prices to lure in customers. The study, “Pricing of Vice Goods for Goal-Driven Consumers,” details digital technologies have made it easier to set goals and track performance. One might think that this trend is a threat for the manufacturers and sellers of vice goods. On the contrary, this research shows that both consumers and firms may benefit as consumers adopt consumption goals and reduce overconsumption. Doing so reduces the firm’s sales, but can increase profits. Link to full article.

The Role of Employer Retirement Decisions on Whether Employees Save Up or Cash Out

At job separation, many people take the cash at the expense of their future selves, causing a substantial proportion of accrued savings to leak out of the 401(k) system. New research in the INFORMS journal Marketing Science finds that retirement plans with a higher proportion of assets contributed by the employer due to a higher match rate are likely to trigger early leakage because they are more mentally represented as a liquid windfall fund legitimate to spend. Authors of the article, “Cashing Out Retirement Savings at Job Separation,” argue that financial education, auto-portability of terminated employees’ accounts and communication at job separation can help curb cashing out behaviors. Link to full article.

The Impact of Advertisements on Presidential Elections

New research in the INFORMS journal Management Science analyzes the effects of positive and negative advertising in presidential elections. The researchers developed a model to disentangle these effects on voter turnout and candidate choice. The paper, “Disentangling the Effects of Ad Tone on Voter Turnout and Candidate Choice in Presidential Elections,” uses data from the 2000 and 2004 U.S. presidential elections. Findings show that positive and negative ads play fundamentally different roles. Negative ads are more effective at driving relative candidate shares, whereas positive ads stimulate turnout. These results indicate that a candidate geographically targeting tone trades off local relative share gains and local increases in turnout for localities with a strong base. When candidates adjust the quantity of positive and negative advertising with a fixed budget, it indicates that ad tone alone can impact the outcome of close elections. Link to full article.

About INFORMS 

INFORMS advances and promotes the science and technology of decision-making to save lives, save money and solve problems. As the largest association for the decision and data sciences, INFORMS members support organizations and governments at all levels as they work to transform data into information, and information into insights that lead to more efficient, effective, equitable and impactful results. INFORMS’ 10,000+ members comprise a diverse and robust international community of practitioners, researchers, educators and students from a variety of fields. 

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Contact:

Ashley Smith

443-757-3578

[email protected]

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