Eyran J Gisches

Interests

Research

Operations Management, Project Management

Teaching

Behavioral Operations Management, Interactive Decisions in Networks, Revenue Management

Courses

Scholarly Contributions

Books

• Gisches, E. J. (2021). Strategic Decisions in Directed Networks: Experiments on Queueing, Route Choice, and Departure Time. Cambridge Scholars.

Chapters

• Rapoport, A., Kugler, T., Dugar, S., & Gisches, E. J. (2008). Braess paradox in the laboratory: An experimental study of route choice in traffic networks with asymmetric costs. In Decision modeling and behavior in uncertain and complex environments.

Journals/Publications

• Gisches, E. J. (2021). Strategic Retailers and Myopic Consumers: Competitive Pricing of Perishable Goods under Duopoly. Journal of Behavioral and Experimental Economics.
• Rapoport, A., Seale, D., Kugler, T., Gisches, E. J., & Yun, J. (2022). Package Deals in Multi-issue Bilateral Bargaining . Journal of Behavioral Decision Making.
• Yun, J., Gisches, E. J., Kugler, T., Seale, D., & Rapoport, A. (2021). Bilateral Bargaining with Incomplete Information: Trading Single vs. Multiple Objects in the Laboratory. Journal of Behavioral Decision Making.
• Gisches, E. J. (2017). The Braess Paradox and Coordination Failure in Directed Networks with Mixed Externalities. Production and Operations Management.
• Gisches, E. J. (2019). Voting Rules in Sequential Search by Committees: Theory and Experiments. Management Science.
• Gisches, E. J. (2019). When a few undermine the whole: A class of social dilemmas in ridesharing. Journal of Economic Behavior and Organization.
• Gisches, E. J. (2017). A Network Ridesharing Experiment with Sequential Choice of Transportation Mode. Theory and Decision.
• Gisches, E. J. (2018). Dynamic Pricing Decisions and Seller Buyer Interactions under Capacity Constraints. Games.
• Mak, V., Gisches, E. J., & Rapoport, A. (2015). Route vs. Segment: An Experiment on Real-Time Travel Information in Congestible Networks. Production and Operations Management Society.
• Lindsey, R., Daniel, T., Gisches, E., & Rapoport, A. (2014). Pre-trip information and route-choice decisions with stochastic travel conditions: Theory. TRANSPORTATION RESEARCH PART B-METHODOLOGICAL, 67, 187-207.
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  This paper studies the effects of pre-trip information on route-choice decisions when travel conditions are congested and stochastic. We adopt a model based on the classical two-route network in which free-flow travel times and/or capacities on each route vary unpredictably due to such shocks as bad weather, accidents, and special events. We show that the benefits of information depend on differences between routes in free-flow costs, the shape of the travel cost functions, the severity of congestion and capacity shocks, and the degree of correlation between routes in travel conditions. Information is more likely to be welfare-reducing when free-flow travel costs differ appreciably, travel cost functions are convex, shocks are similar in size on the routes, and route conditions are strongly and positively correlated. (C) 2014 Elsevier Ltd. All rights reserved.
• Mak, V., Rapoport, A., Gisches, E. J., & Han, J. (2014). Purchasing Scarce Products Under Dynamic Pricing: An Experimental Investigation. M&SOM-MANUFACTURING & SERVICE OPERATIONS MANAGEMENT, 16(3), 425-438.
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  Whereas theoretical studies on dynamic pricing typically assume that consumers are either fully strategic or fully myopic, systematic empirical investigations into how consumers behave under dynamic pricing contexts are relatively rare. Focusing on scarce products, we constructed and experimentally tested a two-stage model in which a firm sells a seasonal good under exogenous inventory constraints to a market of strategic buyers. In our experiment, subjects assigned the role of buyers made purchase decisions in response to prices set by an automated seller. We find that equilibrium predictions assuming fully strategic buyers largely accounted for aggregate behavior in the experiment, and the ex post optimal decisions for subjects were overwhelmingly consistent with equilibrium prescriptions. Moreover, subjects tended to become individually more strategic as the session progressed. However, there were also nuanced systematic patterns of deviations from equilibrium that had profit and pricing implications for the seller. First, a nonnegligible minority of subjects exhibited completely myopic buying behavior even with practice. Second, when the product was relatively more scarce, myopic buying had a stronger impact on demand at higher prices; the upshot is that the seller's season-profit-maximizing price could be considerably higher than what would be optimal with fully strategic buyers.
• Rapoport, A., Gisches, E. J., & Mak, V. (2014). Distributed Decisions in Networks: Laboratory Study of Routing Splittable Flow. PRODUCTION AND OPERATIONS MANAGEMENT, 23(2), 314-331.
• Rapoport, A., Gisches, E. J., Daniel, T., & Lindsey, R. (2014). Pre-trip information and route-choice decisions with stochastic travel conditions: Experiment. TRANSPORTATION RESEARCH PART B-METHODOLOGICAL, 68, 154-172.
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  This paper studies the effects of pre-trip information on route-choice decisions when travel conditions on two alternative congestible routes vary unpredictably. It presents and discusses an experiment designed to test a model recently proposed in a companion paper by Lindsey et al. (2013). That model predicts that if free-flow costs on the two routes are unequal, travel cost functions are convex, and capacities are positively and perfectly correlated, then in equilibrium, paradoxically, total expected travel costs increase with the provision of pre-trip information about travel conditions on each route. By contrast, when capacities vary independently, total expected travel costs are predicted to decrease with pre-trip information. We reformulate the model for finite populations, and then test and find support for its predictions in an experiment where under different capacity scenarios, and with and without pre-trip information, subjects are asked to choose routes with payoff contingent on their performance. (C) 2014 Elsevier Ltd. All rights reserved.
• Gisches, E. J., & Rapoport, A. (2012). Degrading network capacity may improve performance: Private versus public monitoring in the Braess Paradox. Theory and Decision, 73(2), 267-293.
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  Abstract: The Braess Paradox (BP) is a counterintuitive finding that degrading a network that is susceptible to congestion may decrease the equilibrium travel cost for each of its users. We illustrate this paradox with two networks: a basic network with four alternative routes from a single origin to a single destination, and an augmented network with six alternative routes. We construct the equilibrium solutions to these two networks, which jointly give rise to the paradox, and subject them to experimental testing. Our purpose is to test the generality of the BP when the network is enriched as well as the effects of the information provided to the network users when they conclude their travel. To this end, we compare experimentally two information conditions when each of the two networks is iterated in time. Under public monitoring each user is accurately informed of the route choices and payoffs of all the users, whereas under private monitoring she is only informed of her own payoff. Under both information conditions, over iterations of the basic and augmented games, aggregate route choices converge to equilibrium. © 2012 Springer Science+Business Media New York.
• Mak, V., Rapoport, A., & Gisches, E. J. (2012). Competitive dynamic pricing with alternating offers: Theory and experiment. Games and Economic Behavior, 75(1), 250-264.
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  Abstract: We propose an equilibrium model of duopolistic dynamic pricing in which a buyer alternates between two sellers for price offers over a finite time horizon. The game ends when the buyer accepts a price offer or the selling season is over, whichever comes first. Previous research (Granot et al., 2007) shows that there are successive markdowns in equilibrium when the buyer is commonly known to be myopic; our analysis suggests that when she is known to be strategic price offers over the entire selling season are constant. Moreover, lengthening the season increases (generally decreases) both sellers' profits when the buyer is myopic (strategic). An experimental study largely supports the equilibrium predictions when the buyer is myopic but not when she is strategic. In the latter case, early in the season sellers overprice the good arguably in an attempt to effectively shorten the season and thereby increase their profits. © 2011 Elsevier Inc.
• Daniel, T. E., Gisches, E. J., & Rapoport, A. (2009). Departure times in Y-shaped traffic networks with multiple bottlenecks. American Economic Review, 99(5), 2149-2176.
• Rapoport, A., Kugler, T., Dugar, S., & Gisches, E. J. (2009). Choice of routes in congested traffic networks: Experimental tests of the Braess Paradox. Games and Economic Behavior, 65(2), 538-571.
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  Abstract: The Braess Paradox consists of showing that, in equilibrium, adding a new link that connects two routes running between a common origin and common destination may raise the travel cost for each network user. We report the results of two experiments designed to study whether the paradox is behaviorally realized in two simulated traffic networks that differ from each other in their topology. Both experiments include relatively large groups of participants who independently and repeatedly choose travel routes in one of two types of traffic networks, one with the added links and the other without them. Our results reject the hypothesis that the paradox is of marginal value and its force diminishes with experience. Rather, they strongly support the alternative hypothesis that with experience in traversing the networks financially motivated players converge to choosing the equilibrium routes in the network with added capacity despite sustaining a sharp decline in earnings. © 2009 Elsevier Inc. All rights reserved.