Prof. Adam Elmachtoub
Assistant Professor, Columbia University
Talk:
The value of opaque products
Abstract:
A product is said to be opaque if one or more of its attributes are not revealed until after the product has been sold. Opaque products have historically been used in the travel industry where airline and hotel brands might be hidden to the customer, in exchange for a discount. More recently, online retailers have also used opaque products, where customers can sacrifice their color choice for a better price. The value of opaque products stems from their ability to i) price discriminate and ii) balance inventory. In this talk, we provide a set of tools for pricing and managing inventory with opaque products. We also explicitly characterize and quantify the price discrimination and inventory balancing effects. Finally, we describe how opaque products can be used as an alternative for dynamic pricing.
Biography:
Adam Elmachtoub is an Assistant Professor of Industrial Engineering and Operations Research at Columbia University, where he is also a member of the Data Science Institute. In 2014-2015, he spent one year at the IBM T.J. Watson Research Center working in the area of Smarter Commerce. His research currently focuses on designing new approaches for supply chain and revenue management, especially where the two areas collide. More broadly, he is interested in leveraging data to make informed decisions in industries such as retail, logistics, and travel. He previously received his B.S. degree from Cornell in 2009, and his Ph.D. from MIT in 2014. In 2016, he received an IBM Faculty Award and was named Forbes 30 under 30 in science.
