Structural Estimation of Callers' Delay Sensitivity in Call Centers

• Published in: Management science Vol. 59; no. 12; pp. 2727 - 2746
• Main Authors: Akşin, Zeynep, Ata, Bariş, Emadi, Seyed Morteza, Su, Che-Lin
• Format: Journal Article
• Language: English
• Published: Linthicum INFORMS 01.12.2013; Institute for Operations Research and the Management Sciences
• Subjects: abandonment; Analysis; Behavior; Call centers; Coefficients; Cost estimates; Cost estimation models; Cost functions; Costs; Customer services; Customers; Datasets; Decision making; Dynamic programming; Functional analysis; Israel; Kaplan meiers estimate; Management science; Middle East; Modeling; Modelling; Perceptions; queues; Queuing; Queuing theory; Service industry; Simulations; Statistical estimation; Studies; Utility theory; United States; Israel
• ISSN: 0025-1909; 1526-5501
• DOI: 10.1287/mnsc.2013.1730

We model the decision-making process of callers in call centers as an optimal stopping problem. After each waiting period, a caller decides whether to abandon a call or continue to wait. The utility of a caller is modeled as a function of her waiting cost and reward for service. We use a random-coefficients model to capture the heterogeneity of the callers and estimate the cost and reward parameters of the callers using the data from individual calls made to an Israeli call center. We also conduct a series of counterfactual analyses that explore the effects of changes in service discipline on resulting waiting times and abandonment rates. Our analysis reveals that modeling endogenous caller behavior can be important when major changes (such as a change in service discipline) are implemented and that using a model with an exogenously specified abandonment distribution may be misleading. This paper was accepted by Assaf Zeevi, stochastic models and simulation.