Karthik Balasubramanian - Faculty & Research - Harvard Business School
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Karthik Balasubramanian

Doctoral Student

Karthik received BS degrees in Electrical Engineering and Economics from Duke University. After graduation, he joined the Boston Consulting Group in Washington DC. He ​then worked in Tanzania and Malawi with the Duke Global Health Institute before joining the Bill & Melinda Gates Foundation's Financial Services for the Poor team focused on mobile banking in East Africa and South Asia prior to beginning the doctoral program. His main research interests relate to optimization of inventory management and incentives for mobile money agents in the developing world.​

Working Papers
  1. Inventory Management for Mobile Money Agents in the Developing World

    Karthik Balasubramanian, David F. Drake and Douglas Fearing

    Mobile money systems, platforms built and managed by mobile network operators to allow money to be stored as digital currency, have burgeoned in the developing world as a mechanism to transfer money electronically. Mobile money agents exchange cash for electronic value and vice versa, forming the backbone of an emerging electronic currency ecosystem that has potential to connect millions of poor and “unbanked" people to the formal financial system. Unfortunately, low service levels due to agent inventory management are a major impediment to the further development of these ecosystems. This paper describes models for the agent's inventory problem, unique in that sales of electronic value (cash) correspond to an equivalent increase in inventory of cash (electronic value). This paper presents a base inventory model and an analytical heuristic that are used to determine optimal stocking levels for cash and electronic value given an agent's historical demand. When tested with a large sample of transaction-level data provided by an East African mobile operator, both the base model and the heuristic improved agent profitability by reducing inventory costs (defined here as the sum of stockout losses and cost of capital associated with holding inventory). The heuristic increased estimated agent profits by 15% relative to profits realized through agents actual decisions, while also offering substantial computational advantages relative to the base model.

    Keywords: Currency; Mobile Technology; Market Platforms; Developing Countries and Economies;


    Balasubramanian, Karthik, David F. Drake, and Douglas Fearing. "Inventory Management for Mobile Money Agents in the Developing World." Harvard Business School Working Paper, No. 17-109, June 2017. (Presented at INFORMS 2015 and POMS 2016. Finalist and first runner up, Production and Operations Management College of Sustainable Operations Best Student Paper Award.)  View Details
  2. Service Quality, Inventory and Competition: An Empirical Analysis of Mobile Money Agents in Africa

    Karthik Balasubramanian and David F. Drake

    The use of electronic money transfer through cellular networks ("mobile money") is rapidly increasing in the developing world. The resulting electronic currency ecosystem could improve the lives of the estimated 2 billion people who live on less than $2 a day by facilitating more secure, accessible, and reliable ways to store and transfer money than are currently available. The development of this ecosystem requires a network of agents to conduct cash-for-electronic value transactions and vice versa. This paper examines how service quality, competition, and poverty are related to demand and inventory (of electronic credit and physical cash) where, in this setting, service quality consists of pricing transparency and agent expertise. Among our results, we find that average demand increases with both pricing transparency and agent expertise, and that agent expertise interacts positively with competitive intensity. We also find that competition is associated with higher inventory holdings of both cash and electronic value, and that agents in high-poverty areas hold greater amounts of cash but do not carry a smaller amount of electronic value indicating that they devote more capital to their inventory. These results offer insight to mobile money operators with respect to monitoring, training, and the business case for their agents. This paper furthers our understanding of service quality, competition and inventory, while developing a foundation for the exploration of mobile money by operations management scholars.

    Keywords: service operations; operations strategy; competition; base of the pyramid; mobile money; Inventory management; Competition; Currency; Service Operations; Mobile Technology;


    Balasubramanian, Karthik, and David F. Drake. "Service Quality, Inventory and Competition: An Empirical Analysis of Mobile Money Agents in Africa." Harvard Business School Working Paper, No. 15-059, January 2015. (Revised October 2015.)  View Details
Other Publications and Materials
  1. Show or Tell?: Behavioral Inventory Response to an East African Mobile Money Field Experiment

    Jason Acimovic, Chris Parker, David F. Drake and Karthik Balasubramanian


    Acimovic, Jason, Chris Parker, David F. Drake, and Karthik Balasubramanian. "Show or Tell?: Behavioral Inventory Response to an East African Mobile Money Field Experiment." 2017. (Work in progress. Completed field experiment involving more than 4,500 Tanzanian mobile money agents.)  View Details