Research
Research Interests
Applications: online marketplaces, platform operations, competition, sourcing innovation, diversity & inclusion (DEI), socially responsible operations, supply chain management
Methodologies: analytical modelling, game theory, probability theory, controlled laboratory experiments, analysis of secondary data
Publications
[1] Korpeoglu G., E. Korpeoglu, C. S. Tang, J. Yu. 2024. Should an Incumbent Store Deter Entry of a Socially Responsible Retailer? Production and Operations Management 33(1): 282-302. This paper appeared in the SSRN top ten download list five times. This paper was covered by UCLA Anderson Review.
[2] Korpeoglu E., G. Korpeoglu, I. E. Hafalir. 2022. Parallel Innovation Contests. Operations Research 70(3): 1506-1530. This paper received the runner-up award in the INFORMS Technology, Innovation Management, and Entrepreneurship Section (TIMES) Best Working Paper Competition in 2018. This paper was selected as the paper of the month by INFORMS TIMES in March 2023.
[3] Korpeoglu G., E. Korpeoglu, S. Tunc. 2021. Optimal Duration of Innovation Contests. Manufacturing and Service Operations Management 23(3), 657-675. This paper was selected as the paper of the month by INFORMS TIMES in June 2021.
[4] Korpeoglu G., E. Korpeoglu, S.-H. Cho. 2020. Supply Chain Competition: A Market Game Approach. Management Science 66(12), 5648-5664. This paper was adopted as course content at INSEAD. This paper was covered by CMU Tepper School of Business newspaper.
[5] Chen Y.-J., T. Dai, G. Korpeoglu, E. Korpeoglu, O. Sahin, C. S. Tang, S. Xiao.*[ 2020.1]Innovative Online Platforms: Research Opportunities. Manufacturing and Service Operations Management 22(3), 430-445. This paper was adopted as course content at London Business School, Johns Hopkins University, University of California at Los Angeles, University College London and Eindhoven University of Technology.
[6] Korpeoglu, G. 2018. Allocation of an Indivisible Object on the Full Preference Domain: Axiomatic Characterizations. Economic Theory 6(1), 41-53 (Bulletin).
[7] Korpeoglu, G., S. E. Spear. 2018. A Theory of Managerial Compensation and Taxation with Endogenous Risk. Economic Theory 6(1), 81-100 (Bulletin).
[8] Chen G., G. Korpeoglu, S. E. Spear. 2017.* Price Stickiness and Markup Variations in Market Games. Journal of Mathematical Economics 72, 95-103.
Working Papers
[9] Kizilyildirim R., G. Korpeoglu, E. Korpeoglu, M. Kremer.* Exclusive or Not? An Experimental Analysis of Parallel Innovation Contests. Under 2nd round revision at Manufacturing and Service Operations Management. This paper received the third-place award at POM College of Behavioral OM Junior Scholar Paper Competition in 2024. Available at https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4256134
[10] Candogan S., G. Korpeoglu, C. S. Tang.* Team Collaboration in Innovation Contests. Under 2nd round revision (after a major revision) at Manufacturing and Service Operations Management. This paper received the winner award in the INFORMS TIMES Best Working Paper Competition in 2020. This paper appeared in the SSRN top ten download list. Available at https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3607769
[11] Khorasani, S., G. Korpeoglu.* Mergers of Consumer Cooperatives. Soon to be submitted to Manufacturing and Service Operations Management.
Work in Progress
[12] Kizilyildirim, R., G. Korpeoglu, L. Song, S. Yang.* Empirical Analysis of Inclusion in Healthcare for Patients with Mental Illnesses in Turkey. Target journal: Management Science.
[13] Kizilyildirim, R., G. Korpeoglu.* Fuzzy Awards: A Bridge Between Two Worlds. Target journal: Manufacturing and Service Operations Management.
* Authors are listed in alphabetical order.
Abstracts of Publications and Working Papers
Should an Incumbent Store Deter Entry of a Socially Responsible Retailer?
Abstract: As consumers become more conscious about social issues, they gain an additional "social benefit" when purchasing from a socially responsible retailer (or brand). This trend has motivated more socially responsible retailers (or brands) to enter the market with a "pre-commitment" to donate a certain proportion of their (A) profits or (B) revenues for social causes. In this paper, we present a game-theoretic model where a socially responsible retailer enters the market with an incumbent for-profit retailer and heterogeneous consumers. We examine the socially responsible retailer's pricing strategy and entry conditions, the impact of the socially responsible retailer's entry on the incumbent retailer's profit, and the conditions under which the incumbent retailer should deter (or tolerate) the socially responsible retailer's entry. Our equilibrium analysis generates the following insights. First, even if the incumbent retailer can profitably deter the socially responsible retailer's entry, the incumbent retailer can be better off tolerating it under certain conditions. Second, somewhat interestingly, the incumbent retailer is more likely to deter the type (B) retailer's entry even though such entry is less detrimental to the incumbent retailer.
Abstract: We study multiple parallel contests where contest organizers elicit solutions to innovation-related problems from a set of solvers. Each solver may participate in multiple contests and exert effort to improve her solution for each contest she enters, but the quality of her solution in each contest also depends on an output uncertainty. We first analyze whether an organizer's profit can be improved by discouraging solvers from participating in multiple contests. We show, interestingly, that organizers benefit from solvers participating in multiple contests when the solver's output uncertainty in these contests is sufficiently large. A managerial insight from this result is that when all organizers are eliciting innovative solutions rather than low-novelty solutions, they may benefit from solvers participating in multiple contests. We also show that organizers' average profit increases when solvers participate in multiple contests even when some contests seek low-novelty solutions, as long as other contests seek cutting-edge innovation. We further show that an organizer's profit is unimodal in the number of contests, and the optimal number of contests increases with the solver's output uncertainty. This finding may explain why many organizations run multiple contests in practice, and it suggests running a larger number of contests when the majority of these organizations are seeking innovative solutions rather than low-novelty solutions.
Abstract: We study the duration and the award scheme of an innovation contest where an organizer elicits solutions to an innovation-related problem from a group of agents. We use a game-theoretic model where the organizer decides on the contest duration and the award scheme while each agent decides on her participation, and determines her effort over the contest duration by considering potential changes in her productivity over time. The quality of an agent’s solution improves with her effort, but it is also subject to an output uncertainty. We show that the optimal contest duration increases as the relative impact of the agent uncertainty on her output increases, and it decreases if the agent productivity increases over time. These results suggest that the optimal contest duration increases with the novelty or sophistication of solutions that the organizer seeks, and it decreases when the organizer can offer support tools that can increase the agent productivity over time. More interestingly, we characterize an optimal award scheme, and show that giving multiple (almost always) unequal awards is optimal when the organizer’s urgency in obtaining solutions is below a certain threshold. We also show that this threshold is larger when the agent productivity increases over time. These results help explain why many contests on crowdsourcing platforms give multiple unequal awards. Finally, consistent with empirical findings, we show that there is a positive correlation between the optimal contest duration and the optimal total award.
Abstract: We study supply chains where multiple suppliers sell to multiple retailers through a wholesale market. In practice, we often observe that both suppliers and retailers tend to influence the wholesale market price retailers pay to suppliers. However, existing models of supply chain competition do not capture retailers' influence on the wholesale price (i.e., buyer power), and show that the wholesale price and the order quantity per retailer do not change with the number of retailers. To overcome this limitation, we develop a competition model based on the market-game mechanism in which the wholesale price is determined based on both suppliers' and retailers' decisions. When taking into account retailers' buyer power, we obtain the result that is consistent with the observed practice: as the number of retailers increases, each retailer's buyer power decreases, and each retailer is willing to pay more for her order, so the wholesale price increases. In this case, supply chain expansion to include more retailers (or suppliers) turns out to be more beneficial in terms of supply chain efficiency than what the prior literature shows without considering buyer power. Finally, we analyze the integration of two local supply chains, and show that, although the profit of the integrated supply chain is greater than the sum of total profits of local supply chains, integration may reduce the total profit of firms in a retailer-oriented supply chain that has more retailers than suppliers.
Abstract: Economic growth in many countries is increasingly driven by successful startups that operate as online platforms. These success stories have motivated us to define and classify various online platforms according to their business models. This study discusses strategic and operational issues arising from five types of online platforms (resource sharing, matching, crowdsourcing, review, and crowdfunding) and presents some research opportunities for operations management scholars to explore.
Abstract: I study the problem of allocating an indivisible object to one of several agents on the full preference domain when monetary transfers are not allowed. My main requirement is strategy-proofness. The other properties we seek are Pareto optimality, non-dictatorship, and non-bossiness. We provide characterizations of strategy-proof rules that satisfy Pareto optimality and non-bossiness, non-dictatorship and non-bossiness, and Pareto optimality and non-dictatorship. As a consequence of these characterizations, I show that a strategy-proof rule cannot satisfy Pareto optimality, non-dictatorship, and non-bossiness simultaneously.
Abstract: We study the impact of endogenous shocks driven by collective actions of managers. We analyze how such endogenous shocks impact social welfare by employing an overlapping-generations model. We first prove that the competitive equilibrium allocation is suboptimal because of the externalities in managers' wages and in equity market. We establish that a socially optimal allocation can be achieved if the planner imposes wage taxes (or subsidies) on managers and equity taxes. Our results help provide an alternative explanation as to why managers are compensated and taxed differently than other workers. We then extend the model by incorporating unobservable actions for managers and show that a second-best allocation can be implemented if the planner imposes equity taxes.
Abstract: In this paper, we show that the Shapley-Shubik market game model with production naturally generates an equilibration mechanism that can accommodate price stickiness arising from strategic interactions of firms. Unlike New Keynesian models that show similar price stickiness results, the market game model does not require enforcing menu costs or other additional restraints on price adjustment mechanisms in order to generate price stickiness. As such, we suggest that the market game model can provide a good micro-foundation for macroeconomic analysis. We then explicitly show the relationship between a typical firm's markup of price over marginal cost and its market share.
Abstract: We study parallel innovation contests where organizers seek innovative solutions to a set of problems from independent solvers with limited (financial, time, cognitive) resources. We analyze whether and when organizers should discourage solvers from participating in more than one contest. We test contest theory based on a game-theoretic model using controlled laboratory experiments. In the model, a solver’s likelihood of winning a contest is determined by the quality of her solution, which improves with her effort and is also influenced by some output uncertainty. Prior theoretical work suggests that organizers should discourage solvers from participating in parallel contests in environments with low output uncertainty, where contest outcomes are primarily driven by solver efforts. In this case, organizers benefit from solvers focusing all of their efforts on a single “exclusive” contest rather than splitting their efforts across multiple “non-exclusive” contests. Our experimental findings depart from theoretical predictions in terms of both solvers’ effort choices and the relative profitability of different contest formats. Our main result (and key managerial insight) is that non-exclusive contests are attractive to organizers even in environments with low output uncertainty where theory advocates exclusive contests. We link this result to behavioral tendencies that affect both the average and variability of solvers’ efforts in ways that favor non-exclusive contests over exclusive ones.
Abstract: In an innovation contest, an organizer elicits solutions to an innovation-related problem from a group of solvers. Although solvers are capable of developing solutions individually and making individual submissions, if the organizer encourages collaboration, solvers may collaborate as teams and make team submissions. Motivated from different policies adopted by crowdsourcing platforms (e.g., Wazoku, Topcoder, and 99designs), we identify conditions under which the organizer can benefit from team submissions. By examining equilibrium outcomes of game-theoretic models, we show, interestingly, that when the organizer seeks high-novelty solutions to a nondecomposable problem (e.g., design challenges at Wazoku), the organizer can benefit from team submissions despite the decrease in solvers’ efforts. Yet, when the organizer seeks low-novelty solutions to a nondecomposable problem (e.g., logo design challenges at 99designs), the organizer may not benefit from team submissions unless teams are highly diverse. We further show that when the organizer seeks low-novelty or high-novelty solutions to a decomposable problem (e.g., software challenges at Topcoder), the organizer can benefit from team submissions, but interestingly, only under certain conditions. Finally, we identify conditions under which solvers can benefit from collaborating as teams because the organizer’s benefit from team submissions hinges upon solvers’ decisions. We show that solvers can benefit from team collaboration in the absence of substantial synergistic gains, because without such gains, team collaboration decreases each solver’s effort and hence cost in equilibrium.
Abstract: Consumer cooperatives differ from profit-maximizing firms on two fronts. First, they are owned and managed by their member consumers. Second, they maximize utilities of their member consumers, so they are non-profit enterprises. We consider supply chains where consumer cooperatives procure a product from suppliers on behalf of their member consumers, and study mergers of consumer cooperatives. To capture cooperatives’ buyer power before and after mergers, we employ the market-game model, where cooperatives determine their procurement budgets, and suppliers determine their production quantities. We show, as expected, that mergers of cooperatives reduce the market price cooperatives procure from suppliers. However, the lower price does not guarantee an increase in consumer utility because we identify a second force, reduction in production quantity, which reduces consumer utility. We show that when the number of cooperatives is below a certain threshold, the negative effect of the reduction in production quantity outweighs the positive effect of the lower price, so consumer utility decreases with mergers. When the number of cooperatives is above a certain threshold, we see the opposite result, consumer utility increases with mergers. Hence, consumer utility is unimodal in the number of cooperatives. Moreover, we show that the utility of a consumer in the merged cooperative is smaller than the utility of a consumer in an individual cooperative. After a merger, strategic consumers leave the merged cooperative to join an individual cooperative. We use this result to show that under zero transportation cost, all cooperatives are of the same size in equilibrium, regardless of how they merge. Under positive transportation cost, however, different-sized cooperatives emerge in equilibrium, as is consistent with practice. Our results are robust under general utility and cost functions and capacity constraints.