W. Elmaghraby

• Doctor of Philosophy in Industrial Engineering and Operations Research, UC Berkeley
• Dean's Chair in Operations Management at University of Maryland, College Park

Online business-to-business auctions for used IT products have emerged as a viable market for finding a second life for these products, rather than having them end up in landfills as e-waste. As part of the growing “secondary market” landscape, these online B2B auctions are significantly affected by adverse selection since uncertainty about product...

Consumers around the world have moved dramatically toward online platforms. Purchasing goods and services from independent suppliers through digital platforms has become a routine part of daily life. Recently, the COVID-19 pandemic has accelerated the paradigm shift toward digital economy and servitization. Data show that ecommerce sales have grown...

In the race to establish themselves, many early-stage marketplaces choose to accelerate their growth by adding marquee (established brand name) sellers. We study the implications of marquee seller adoption on smaller, lesser-known unbranded sellers in the marketplace. While recent literature has shown that higher-quality unbranded sellers fare bett...

Retailers often offer free shipping contingent on an order satisfying a pre-specified threshold amount(Contingent Free Shipping, CFS). As a response, customers may pad up below-threshold orders to avoid paying shipping charges. From a retailer’s standpoint, such order-padding behavior can economize logistics costs provided that customers do not eng...

Because decision makers tend to dislike ambiguity, the uncertainty surrounding new products can act as a barrier to retailer acceptance. We propose that by changing the structure of cash flows in the contract offered to a retailer (keeping net payments constant), a manufacturer can shift a retailer from making ambiguity‐averse to ambiguity‐neutral...

We explore marketplace design in the context of a business-to-business platform specializing in liquidation auctions. Even when the platform’s aggregate levels of supply and demand remain fixed, we establish that the platform’s ability to use its design levers to manage the availability of supply over time yields significant value. We study two suc...

We aim to quantify the benefits of cooperation between humanitarian relief agencies in terms of stocking decisions. We consider two agencies that stock the same type of relief item at different locations prone to individual disaster risks and agree to transship the shortage amount from available stocks in case of a disaster. We incorporate the disa...

This chapter reports on issues related to procurement and competitive bidding, with the emphasis on designing procurement auctions and understanding how human behavior affects their performance. Starting from the basics of auctions and the insights learned from auction research in behavioral economics, we build toward a better understanding of issu...

Platforms can obtain sizable returns by operationally managing their market thickness, i.e., the availability of supply-side inventory. Using data from a natural experiment on a major B2B auction platform specializing in the $424 billion secondary market for liquidating retail merchandise, we find that thickening the platform's market by consolidat...

Although theoretical work has shown that end-of-season payment contracts, which allow suppliers and retailers to share the cost of unsold inventory, increase total profit, most suppliers and retailers today still use simple wholesale price contracts. In a series of experimental studies, we show that supplier preferences for wholesale price contract...

It is widely accepted that the information technology (IT) industry has high clockspeed. This very phenomenon has led to IT OEMs finding themselves selling new generation models only to be left holding returned merchandise from older generations. Similarly, customers who migrate to newer generations of products experience uncertainty about how to d...

Online auction environments provide several sources of information that can be used by bidders to form their bids. The impact of this information on bidding is likely to be higher when ambiguously specified products are auctioned. The secondary market represents one such environment, where used and returned items from big-box retailers are auctione...

This paper focuses on salespeople behavior in business-to-business transactions. The paper investigates how salespeople use the information provided to them to set prices; of particular interest is how salespeople use price recommendations from a decision support tool. The investigation builds reduced-form models and tests them on a data set obtain...

It is hard to write a brief introduction for a man whom you have viewed most of your life as “part-God”. It is a bit awkward to step back and try to describe him to others. This is our attempt to do so—to express our love and respect for, quite simply, the most beautiful man we know, and one we were so fortunate enough to have as our father.

A popular procurement auction format is one in which bidders compete during a live auction event but observe only the rank of their own bid and not the price bids of their competitors. We investigate the performance of auctions with rank feedback in a simple setting for which analytical benchmarks are readily available. We test these benchmarks in...

This study is a step toward understanding price changes and the outcome of pricing processes in an environment where sales people have pricing authority. We explore the effect of observable and quantifiable factors on business-to-business price changes using a large data set from a grocery products distributor. We study the relationship between pri...

Online auction environments provide several sources of information that can be used by bidders to form their bids. One such information set that has been relatively understudied in the literature pertains to reference prices available to the bidder from other concurrent and comparable auctions. In this paper, we study how reference prices from such...

Bidders often face avoidable fixed costs or other synergies that can make bidding decisions complex and risky, and market outcomes volatile. If bidders deviate from risk neutral best responses, either due to faulty optimization or a preference to avoid volatility, then equilibrium predictions can perform poorly. In this paper, we confront laborator...

Bidders in procurement auctions often face avoidable fixed costs. This can make bidding decisions complex and risky, and market outcomes volatile. If bidders deviate from risk neutral best responses, either due to faulty optimization or risk attitudes, then equilibrium predictions can perform poorly. In this paper, we confront laboratory bidders wi...

We analyze the optimal design of a markdown pricing mechanism with preannounced prices. In the presence of limited supply, buyers who choose to purchase at a lower price may face a scarcity in supply. Our focus is on the structure of the optimal markdown mechanisms in the presence of rational or strategic buyers who demand multiple units. We first...

Bidders in procurement auctions often face avoidable fixed costs that give rise to complex preferences over both price and quantity supplied. We use experiments to study how enrich-ing the bidding language (multi-part bids) and enriching market feedback (quantity-dependent prices) affect auction performance, relative to a uniform price benchmark. I...

The paper presents a survey of current industry practices in designing and running auctions as part of e-sourcing events. We report our findings from numerous interviews with auction makers in leading e-sourcing application vendors. The differences between auction theory and auction practice pose a number of interesting and important research quest...

At the beginning of the selling season, the retailer announces both the price p h at which the product will be sold during the selling season and the post-season clearance price p < p h for unsold items. We analyze two operating regimes. The 'no reservation regime' allows a buyer either to purchase the product at price p h when he arrives or to ent...

At the beginning of the selling season, the retailer announces both the price ph at which the product will be sold during the selling season and the post-season clearance price p'

One commonly held belief in designing auctions is that increasing the number of bidders makes an auction more competitive. Therefore, a buyer who wishes to minimize her procurement costs is better off inviting more suppliers to participate in her auction. In this paper, we question the validity of this belief by shedding light on bidders' behavior...

In this paper, we study the performance of a sourcing mechanism gaining popularity in industrial procurement environments; a tournament. Under a tournament, a buyer initially procures her parts from two suppliers with possibly different quality levels, for T time periods, i.e., she parallel sources. During this time, the buyer is able to observe no...

In this paper, we analyze the ability of different auction structures to induce the efficient dispatch in a one-shot framework where generators know their own and competitors' costs with certainty. In particular, we are interested in identifying which, if any, rules in an auction structure yield only the efficient dispatch in equilibrium. We find t...

Combinatorial auctions are commonly used for the allocation of discrete, complementary resources. The goal of this research is to shed light onto the critical question of how bidders should bid in combinatorial auctions given that evaluating and submitting all possible bundles is not practical for the bidders and the auctioneer. Within this setting...

An unavoidable characteristic of electricity markets is their lumpiness; generation and transmission capacity additions often come in inconvenient discrete sizes. Electricity markets need to be designed to accommodate their lumpy nature.

By offering high-speed communication and tight connectivity, advances in information technology have opened new venues for companies to create flexible supply chains. Today, many companies, from the electronics, pharmaceutical, to the automotive industry, are focusing on their core competencies and outsourcing significant portions of their business...

In markets where suppliers experience learning by doing over time or, more generally, economies of scale in production, buyers are auctioning ofi longer-term contracts with an eroding price policy. Under an eroding price contract, the buyer initially competitively awards produc- tion to the lowest-bid supplier via an auction. Before the auction tak...

We study how to coordinate a team of mobile robots to visit a number of given targets in a partially unknown terrain. Robotics researchers have studied single-item auctions to perform this exploration task but these do not make synergies between the targets into account. We therefore design combinatorial auctions, propose different combinatorial bi...

The benefits of dynamic pricing methods have long been known in industries, such as airlines, hotels, and electric utilities, where the capacity is fixed in the short-term and perishable. In recent years, there has been an increasing adoption of dynamic pricing policies in retail and other industries, where the sellers have the ability to store inv...

To date, the largest part of literature on multi-unit auctions has assumed that there are k homogeneous objects being auctioned, where each bidder wishes to win exactly one or all of k units. These modeling assumptions have made the examination of ordering in sequential auctions inconsequential. The aim of this paper is to introduce and highlight t...

The benefits of dynamic pricing methods have long been known in industries, such as airlines, hotels, and electric utilities, where the capacity is fixed in the short-term and perishable. In recent years, there has been an increasing adoption of dynamic pricing policies in retail and other industries, where the sellers have the ability to store inv...

The Internet provides tremendous opportunities for implementing dynamic pricing mechanisms, since it is easier to collect information about markets and customers, and to change prices electronically rather than physically. We analyze a markdown pricing mechanism, which is a form of dynamic pricing, under complete information. Our focus is on mechan...

Advances in information technology have opened new venues for companies to create flexible supply chains by offering high-speed communication and tight connectivity. A growing number of companies are taking advantage of new opportunities to outsource portions of their production and other operations. Given the importance of the supplier selection p...

Using a complete information game-theoretic model, we analyze the performance of different electricity auction structures in attaining efficiency (i. e., least-cost dispatch). We find that an auction structure where generators are allowed to bid for load "slices" outperforms an auction structure where generators submit bids for different hours in t...

Many governments are beginning to believe that it is in their and their constituents' best interest to deregulate their electricity supply industries (ESI). Electricity supply industries in the United Kingdom, Australia, Chile, Norway and the United States have been, or are currently being, restructured. Amongst the many challenges facing the dereg...

We analyze the optimal design of a markdown pricing mechanism, a form of dynamic pricing, in which the price decreases over time according to a pre-announced schedule. In the presence of limited supply, buyers who choose to purchase at a lower price may face a scarcity in supply. Our focus is on the structure of the optimal markdown mechanisms in t...

We optimize stocking decisions for humanitarian relief agencies that provide emergency relief items to people affected by natural disasters and analyze how cooperation between agencies change the stocking decisions. We first extend the newsvendor model to incorporate disaster risk by conditioning the decisions on the event that a major disaster occ...

Advances in information technology and computational power have opened the doors for auctioneers to explore a range of auction formats by considering varying degrees of bid expressivity and different payment rule, e.g., single price vs. discriminatory prices. While it is clear that one can design more complicated auctions, it is still not clear if...