Many studies in operations management started to explicitly model customer behavior. However, it is typically assumed that customers are fully rational decision-makers and maximize their utility perfectly. Recently, modeling customer bounded rationality has been gaining increasing attention and interest. This paper summarizes various approaches of modeling customer bounded rationality, surveys how they are applied to relevant operations management settings, and presents the new insights obtained. We also suggest future research opportunities in this important area.
W e consider service systems where customers do not know the distribution of uncertain service quality and cannot estimate it fully rationally. Instead, they form their beliefs by taking the average of several anecdotes, the size of which measures their level of bounded rationality. We characterize the customers' joining behavior and the service provider's pricing, quality control, and information disclosure decisions. Bounded rationality induces customers to form different estimates of the service quality and leads the service provider to use pricing as a market segmentation tool, which is radically different from the full rationality setting. As customers gather more anecdotes, the service provider may first decrease and then increase price, and the revenue is U-shaped. Interestingly, a larger sample size may harm consumer surplus, although it always benefits social welfare. When the service provider also has control over quality, we find that it may reduce both quality and price as customers gather more anecdotes. In addition, a high-quality service provider may not disclose quality information if the sample size is small, while a low-quality service provider may disclose if the sample size is large. Furthermore, as the expected waiting cost increases, information non-disclosure is more attractive, thereby highlighting the importance of incorporating customer-bounded rationality in congested settings.
We consider service systems where customers do not know the distribution of uncertain service quality and cannot estimate it fully rationally. Instead, they form their beliefs by taking the average of several anecdotes, the size of which measures their level of bounded rationality. We characterize the customers' joining behavior and the service provider's pricing, quality control, and information disclosure decisions. Bounded rationality induces customers to form different estimates of the service quality and leads the service provider to use pricing as a market segmentation tool, which is radically different from the full rationality setting. As customers gather more anecdotes, the service provider may first decrease and then increase price, and the revenue is U-shaped. Interestingly, a larger sample size may harm consumer surplus, although it always benefits social welfare. When the service provider also has control over quality, we find that it may reduce both quality and price as customers gather more anecdotes. In addition, a high-quality service provider may not disclose quality information if the sample size is small, while a low-quality service provider may disclose if the sample size is large. Furthermore, as the expected waiting cost increases, information non-disclosure is more attractive, thereby highlighting the importance of incorporating customer bounded rationality in congested settings.
This paper presents the characteristics of underwater electrical wire explosion (UEWE) with three discharge types, namely, Type-A, Type-B, and Type-C. Experiments were carried out with copper and tungsten wires (4 cm long and 50–300 μm in diameter) driven by a microsecond time-scale pulsed current source with 500 J stored energy. A time-integrated spectrometer and a photodiode were used to measure the optical emission of UEWE. A Polyvinylidene Fluoride probe was adopted to record the pressure waveforms. Experimental results indicate that from Type-A to Type-C, more energy deposits prior to the voltage peak and the first peak power increases drastically. This variation of energy deposition influences the optical emission and shock wave generation process. Specifically, the light intensity decreases by more than 90% and the peak of continuous spectra moves from ∼400 nm to ∼700 nm. In addition, the peak pressure of the first shock wave increases from ∼2 MPa to more than 7.5 MPa.
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