asen@mays.tamu.edu} B ased on our interactions with the key personnel of three different healthcare information exchange (HIE) providers in Texas, we develop models to study the sustainability of HIEs and participation levels in these networks. We first examine how heterogeneity among healthcare practitioners (HPs) (in terms of their expected benefit from the HIE membership) affects participation of HPs in HIEs. We find that, under certain conditions, low-gain HPs choose not to join HIEs. Hence, we explore several measures that can encourage more participation in these networks and find that it might be beneficial to (i) establish a second HIE in the region, (ii) propose more value to the low-gain HPs, or (iii) offer or incentivize value-added services. We present several other interesting and useful results that are somewhat counterintuitive. For example, increasing the highest benefit the HPs can get from the HIE might decrease the number of HPs that want to join the HIE. Furthermore, since the amount of funds from the government and the other agencies often changes (and will eventually cease), we analyze how the changes in the benefit HPs obtain from the HIE affect (i) participation in the network, (ii) the HIE subscription fee and the fee for value-added service, (iii) the number of HPs that request value-added service, and (iv) the net values of the HIE provider and HPs. We also provide guidelines for policy makers and HIE providers that may help them improve the sustainability of HIEs and increase the participation levels in these networks.
We study the relationship between a client and a vendor in value co-creation environments such as information technology projects. We consider that the client gets utility from the project throughout the development period and that the effort levels are not verifiable if not monitored. The output is contingent on the effort levels of each party, and we allow these effort levels to be dynamic. Hence, the client needs to optimally decide the terms of payment structures so as to maximize her net value. We analyze the performance of different payment structures and find the best one for the client in diverse settings. We show that the remaining time of the project and the client’s valuation of the project regulate the behavior of the effort levels and some other characteristics in the collaboration. We derive the conditions under which the client chooses not to monitor the vendor’s effort and operates in a double moral hazard environment. In addition, we find that the equilibrium effort levels or the values the parties gain from the collaboration do not necessarily increase when the output becomes more sensitive to either party’s effort. Based on the results of our model, we present several other managerial insights.
We consider subscription‐based rental organizations, such as Netflix, where the satisfaction of customers depends on the availability of requested products. Recommender systems, in a DVD‐rental context, are typically used to help customers in finding the right movies for them. Accordingly, the focus in recommender system research is generally on making better predictions of users' ratings. In contrast, we focus on better utilizing these rating estimates in the operations of DVD‐rental firms. We show that a more explicit consideration of inventory level and future demand can help the firms better manage demand, and can increase the number of satisfied customers substantially. However, if the uncertainty regarding inventory levels is high, the performance of one of our proposed approaches may be worse than the prevalent industry practice under certain conditions. We discuss these conditions and propose a quick recipe for dealing with high levels of variation in inventory estimation. We show that when it is not possible to estimate inventory levels reliably, it is better to underestimate rather than overestimate. Other findings include the trade‐off between the short‐term profitability of the firms and long‐term customer trust; and the effect of variation in rating estimates on the quality of our solution approaches.
We study a setting where the nature of the collaboration necessitates two partner firms working together, which is often the case in supply chain and information technology (IT) environments. We consider that both firms get ongoing value from the project and the effort levels of both parties are dynamic. In this setting, one of the partners (say, the first partner) decides the terms of the payment it extends to the second partner in order to maximize the value it gets from the collaboration. We analyze the performance of output dependent, effort dependent, and hybrid (both effort and output dependent) payment structures, and find the best one under various scenarios. In particular, we find that if the output is relatively more sensitive to second party's effort, the hybrid payment structure should be preferred by the first partner. Furthermore, if the output is highly sensitive to second party's effort, the output‐dependent payment structure yields more value to the first partner (compared to the effort dependent structure). We further find that the time that has passed in the collaboration and the length of the planning horizon affect the behavior of the effort levels and some other characteristics in the collaboration. We also study and derive interesting results in the following additional settings: the first partner or the second partner gets utility from the output even after the project finishes.
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