IE-OPIM Joint Graduate Seminar
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IE-OPIM Joint Graduate Seminar: Nesim Erkip (Bilkent University)

  “Designing an intervention strategy for public-interest goods: The Californian electric vehicle market case

Date: Wednesday, April 12, 2017
Time: 13:40 – 14:30
Location: FENS G035

We study the intervention problem for public-interest goods. Public-interest goods are known as goods with positive externalities, allowing the consumer as well as others who do not pay for them benefit from the consumption. Health related goods, such as vaccines, or products with less carbon emissions are well known examples. We consider a supply chain for such a product. Generally, wider adoption or usage of such goods is ensured by the intervention of a central authority to the related supply chain. We explore the problem for a setting composed of a retailer and a central authority. The main goal of the central authority is to design and fund an intervention scheme so that decisions of the channel are aligned with the good-of-society, specified as a social welfare function. We propose two intervention tools applied simultaneously: (1) investing in demand-increasing strategies, which affects the level of the stochastic demand in the market; and (2) rebates that affect revenue per unit received by the retailer. We introduce a model that determines a utility maximizing intervention scheme and further investigate the model. We also present two decentralized approaches as benchmarks. Finally, we conduct a case study for California's electric vehicle market and validate our findings by a detailed analysis of the results, including comparisons with the current practice.

This is a joint work with Dr. Ece Z. Demirci, Eindhoven University.


Prof. Erkip received his M.S. and Ph.D. from Stanford University and his B.S. from Middle East Technical University. He has been teaching since 1979 and has held visiting and research positions Cornell University, Stanford University, University of California at Berkeley and New York University in the United States and University of Eindhoven in Holland. He served as a Fulbright Scholar in 1995-96. He worked for Middle East Technical University over 20 years and is currently at Bilkent University where he joined in 2005. He is a scholar in field of industrial engineering and has published many academic papers, reports, and book chapters. He has mentored dozens of M.S. and Ph.D. students, and served as associate editor in a few journals. Currently, he serves in the editorial board of Flexible Services and Manufacturing Journal. Early 1990’s he worked at the Scientific and Technological Research Institute of Turkey (TÜBİTAK), is a founding member of Science and Technology Policy Studies Graduate Program at Middle East Technical University, and had been part of several initiatives in preparing reports on Science and Technology Policy issues in Turkey. Late 1990’s he has been involved in strategic planning activities for private and public higher educational institutions. Prof. Erkip was a member of Board of Trustees for TED University in 2010-2016. For details: