Co-Founder and Chief Product Officer
Contributor's Links: The Operations Room

Gad Allon joined the Kellogg School of Management in 2005 and he is an associate professor of Managerial Economics and Decision Sciences. His research uses queuing theory and game theory to model problems in operations management in general and service operations in particular and his work ... more

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Seagate Avoids Thai Flooding, But Suppliers Are In Trouble
Seagate is forecasting difficult times for the drive industry. Each of the hundreds of thousands of drives Seagate’s Thai factories ship every day contain parts from 130 or so suppliers, many still under three feet of water.
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STOCKS I FOLLOW

AAPL Apple Inc.
AHONY KONINKLIJKE AHOLD
AMZN Amazon.com Inc.
ANTM Anthem, Inc.
BA The Boeing Company
BAC Bank of America Corporation
CAT Caterpillar Inc.
F Ford Motor Company
FAN FirstTrust Global Wind Energy ETF
GE General Electric Company
HMC Honda Motor Co. Ltd.
JWN Nordstrom Inc.
LULU lululemon athletica inc.
LUV Southwest Airlines Co.
M Macy's Inc.
MCD McDonald's Corporation
OPEN OpenTable, Inc.
PGJ PowerShares Gldn Dragon Halter USX China
RYAAY Ryanair Holdings PLC
SBUX Starbucks Corporation
SEA Guggenheim Shipping ETF
STX Seagate Technology.
TM Toyota Motor Corporation
UNP Union Pacific Corporation
WMT Wal-Mart Stores Inc.
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Work Experience

Co-Founder and Chief Product Officer
ForClass
2013 - Present (6 years 6 months)
Professor of Managerial Economics, Decisions Sciences and Operations Management
Kellogg School Of Management
September 2012 - Present (6 years 10 months)

Education

Columbia University - Columbia Business School
Doctor of Philosophy (PhD)
2001 / 2005
Decisions Risk and Operations

Publications

How Much Is a Reduction of Your Customers' Wait Worth? An Empirical Study of the Fast-Food Drive-Thru Industry Based on Structural Estimation Methods
Gad Allon, Margaret Pierson, Awi Federgruen
09/02/2011

In many service industries, companies compete with each other on the basis of the waiting time their customers experience, along with other strategic instruments such as the price they charge for their service. The objective of this paper is to conduct an empirical study of an important industry to measure to what extent waiting time performance impacts different firms' market shares and price decisions. We report on a large-scale empirical industrial organization study in which the demand equations for fast-food drive-thru restaurants in Cook County are estimated based on so-called structural estimation methods. Our results confirm the belief expressed by industry experts, that in the fast-food drive-thru industry customers trade off price and waiting time. More interestingly, our estimates indicate that consumers attribute a very high cost to the time they spend waiting.