|9/16/16||1:15 PM - 3:30 PM||Grainger 4151||Dr. Vishal Singh||Stern School of Business, New York University||See Synopsis|
|9/30/16||1:15 PM - 3:30 PM||Grainger 4151||Dr. Wilfred Amaldoss||Fuqua School of Business, Duke University||See Synopsis||Reference-Dependent Utility, Product Variety and Price Competition|
|11/11/16||1:15 PM - 3:30 PM||Grainger 4151||Dr. Markus Brauer||Psychology Department, University of Wisconsin-Madison||Unavailable|
|11/18/16||1:15 PM - 3:30 PM||Grainger 4151||Dr. Joseph Nunes||Marshall School of Business, University of Southern California||See Synopsis||Look, I Am Knowledgeable|
|12/02/16||9:00 AM - 10:30 AM||Grainger 5120||Dr. Kelly Goldsmith||Kellogg School of Management, Northwestern University||Unavailable|
|12/09/16||9:00 AM - 10:30 AM||Grainger 5120||Dr. Tat Chan||Olin Business School, Washington University in St. Louis||See Synopsis||Consumer Search and Purchase: An Empirical Investigation of Search-Based Retargeting|
|2/24/17||9:00 AM - 10:30 AM||Grainger 5120||Dr. Woochoel Shin||Warrington College of Business, University of Florida||See Synopsis||Store Brands and Category Captaincy|
|9:00 AM - 10:30 AM||Grainger 4151||Dr. Kristin Diehl||Marshall School of Business, University of Southern California||See Synopsis||The Effects of Volitional Photo-Taking on Memory for Visual and Auditory Aspects of an Experience|
|4/14/17||9:00 AM - 10:30 AM||Grainger 4151||Dr. Ann McGill||Booth School of Business, University of Chicago||See Synopsis||Financial Status and Anthropomorphism|
|4/21/17||9:00 AM - 10:30 AM||Grainger 4151||Dr. Upender Subramanian||Naveen Jindal School of Management, University of Texas at Dallas||See Synopsis|
Repetitive Buying Behavior and Hoard Behavior and Commodity Bubbles
|Vishal Singh, Associate Professor, Stern School of Business, New York University |
Repetitive Buying Behavior: This article provides a large scale empirical study on the extent of repetitive versus variety- seeking behavior in our daily shopping choices, and how this varies with personal and context characteristics. We utilize a unique database that records detailed grocery shopping histories for a nationwide sample of over 100,000 households observed over several years. Across a wide variety of product categories, we find that consumers display high levels of repetitive buying and narrow choice sets, even over an extended period of several years. This behavior is moderated by household and product specific factors. Repetitive buying behavior is found to increase with age, income, education, conservative ideology, and for males; and decrease with the frequency of purchase. These relationships vary with category characteristics that measure the stability of the choice context and the utilitarian versus hedonic nature of the product.
Hoard Behavior and Commodity Bubbles: Hoarding by large speculators is often blamed for contributing to commodity market panics and bubbles. Using supermarket scanner data on US household purchases during the 2008 Rice Bubble, we show that hoarding is in fact more systemic, affecting even households who have no resale motive. Export bans led to a spike in prices worldwide in the first half of 2008, which spilled over into US markets. Anticipating shortages, US households with previous purchases of rice, especially those of Asian ethnicity, nearly doubled their buying around the peak of the bubble. We document transmission mechanisms through over-extrapolation from high prices and contagion, as many households bought rice for the first and last time during the bubble.
Reference-Dependent Utility, Product Variety and Price Competition
|Wilfred Amaldoss, Professor, Fuqua School of Business, Duke University |
Products such as iPhone, Coca-Cola and Tide serve as the standard against which consumers evaluate other members of the category. Empirical evidence suggests consumers care about not only the consumption utility derived from a product but also the gain-loss utility in comparison to the reference product of the category. This paper examines how reference-dependent utility affects price competition in a horizontally differentiated market where consumers' tastes are diverse. When consumer valuations are low, the reference product is priced lower than a nonreference product. On the contrary, when consumer valuations are high, the reference product is priced higher than a nonreference product. Moreover, loss aversion on the price dimension always intensifies competition among low valuation goods, whereas loss-aversion on the taste dimension softens competition among high valuation goods only if consumer sensitivity to the difference in match quality is above a threshold. We also find that an increase in the diversity of consumers' tastes reduces equilibrium profits if consumer valuation is low, but has the opposite effect if consumer valuation is high. We further extend the model to explore how an increase in the popularity of the reference product affects price competition.
Look I Am Knowledge
|Joseph Nunes, Professor, Marshall School of Business, University of Southern California|
This work investigates the influence of self-presentation goals on reviewers’ ratings in consumer online communities (i.e., crowd-sourced review sites such as Yelp.com). The authors contend that members of these communities are concerned about being perceived as knowledgeable by others, which influences the valence of the ratings and reviews they provide. The influence of self-presentation concerns evolves dynamically over time, leading reviewers’ ratings to become increasingly more negative. The change observed occurs because reviewers adopt different self-presentation tactics as the number of reviews they complete increases. While relatively new to a particular community, reviewers try to present themselves as knowledgeable by showing they make good product choices, which has a positive influence on ratings, controlling for other factors. After accumulating a discernible record, reviewers become relatively more concerned with demonstrating critical skills and a capacity to be discriminating, resulting in more negative ratings. The impact of self-presentation concerns and the concomitant self-presentation tactics on consumer online ratings is substantiated by a combination of laboratory experiments as well as the analysis of real-world data.
|Kelly Goldsmith, Assistant Professor, Kellogg School of Management, Northwestern University |
Consumer Search and Purchase: An Empirical Investigation of Search-Based Retargeting
|Tat Chan, Associate Professor, Olin Business School, Washington University in St. Louis |
This paper empirically investigates how marketers could retarget consumers based on their behaviors in the previous search process, a practice we call “search-based retargeting”. We study the value of the retargeting practice, under two unique marketing actions, for consumers and sellers on an online retail platform. To infer the relationship between search activities and preferences of the consumers who have abandoned the search without purchasing, we develop a dynamic consumer search model that is based on Weitzman’s model (1979) but it incorporates several key modifications. Based on the model estimation results, a series of counterfactual studies are used to explore retargeting. When the marketing action is informative advertising, retargeting is found to be most profitable for consumers with high search intensity and for sellers with high conversion rate. Assuming the platform charges the sellers a price that is determined by second-price auctions for sending an ad to targeted consumers, the platform will obtain a substantial profit gain and the consumer welfare will increase significantly. When the marketing action is based on couponing, it is more effective for a seller to target “own” customers rather than those who have previously searched the product from other sellers. The retargeting value is larger for consumers who had high search intensity and searched the seller first during previous search activities. It is also larger for seller with a high click-through rate, which leads to high redeeming rate of the coupon. Although the platform, sellers and consumers all benefit from this policy, the gains are smaller than that from retargeting with informative advertising, suggesting that providing consumers with additional seller information is an important retargeting strategy.
Store Brands and Category Captaincy
Woochoel Shin, Assistant Professor, Warrington College of Business, University of Florida
In several product categories, retailers have launched store brands to compete with national brands on both price and quality. Furthermore, in some of these categories, retailers have appointed a national brand manufacturer as category captain to help expand its sales in all quality tiers within the category. However, category captains may exhibit opportunistic behaviors and even diminish the competitiveness of the store brand. Using a model of vertical differentiation, we aim to understand the strategic implications of category captaincy for the competing national brand, consumers, and the store brand. One may believe that on adopting category captaincy, the retailer gives up the power emanating from the store brand. However, our analysis shows that the retailer leverages the power to make category captaincy more profitable. Our naive intuition also suggests that category captaincy may hurt both the competing manufacturer and consumers. In a mature product category, however, the presence of the store brand turns category captaincy strictly beneficial to the competing manufacturer. In an emerging product category, category captaincy always improves consumer welfare irrespective of the presence of the store brand. Finally, when allowed to make product line recommendations, the category captain recommends the removal of the competing national brand. The resulting pruning of the product line increases both the total channel profits and consumer welfare.
Photographic Memory: The Effects of Volitional Photo-Taking on Memory for Visual and Auditory Aspects of an Experience
Kristin Diehl, Associate Professor, Marshall School of Business, University of Southern California
Experiences are vital to the lives and well-being of people; hence, understanding the factors that amplify or dampen enjoyment of experiences is important. One such factor is photo-taking, which has gone unexamined by prior research even as it has become ubiquitous in everyday life. People take photos for future usage, however, in this work we examine how the act of taking photos affects enjoyment for and memory of activities. We identify engagement as a relevant process that influences whether photo-taking will increase or decrease enjoyment and memory. Across field and lab experiments, we find that taking photos increases engagement with the experience. We further show the consequences of such engagement: Photo-taking enhances enjoyment of positive experiences. With regard to memory , even without revisiting any photos, participants recognize more of what they saw and less of what they heard, compared to those who cannot take photographs. We further show that merely taking mental photos has similar effects on enjoyment and memory as actually taking photos, providing support for a photography-induced shift in attention towards visual aspects and away from auditory aspects.
Financial Status and Anthropomorphism
|Ann McGill, Professor, Booth School of Business, University of Chicago |
The present research distinguishes between marketers’ efforts to design products with human features and consumers-perceived anthropomorphism. Four studies assessed the hypothesis that consumers-perceived financial status moderates their expectations about how an anthropomorphized product would treat them, affecting their motivation to perceive the marketer-intended anthropomorphic features as signaling human agency and their evaluations of the anthropomorphized entity. In study 1, participants who felt rich expected a humanized entity (a self-driving car) would prioritize their well-being over those of others, whereas people in the perceived poor condition expected the opposite. The results of studies 2 and 3 indicate that participants with higher perceived financial standing perceived greater agency in humanized products, and they liked these products better than participants with lower perceived financial standing. These effects were mediated by commercial treatment expectations. Further confirming the role of treatment expectations, when participants believed people with low financial standing to be treated better than those with high financial standing, we observed the reverse pattern (study 4). Findings support the view that effective anthropomorphism requires to take into account consumers’ motivation to interpret a target with human like features as having positive agency, which results from the treatment expectations.
Fostering Trust to Improve Business Performance
|Upender Subramanian, Assistant Professor, Naveen Jindal School of Management, University of Texas at Dallas |
In this talk, I present two papers at the interface of marketing and operations that develop behavioral and economic theories of fostering trust between transacting partners to improve business performance.
The first paper (Information Sharing, Advice Provision or Delegation: What Leads to Higher Trust and Trustworthiness?) uses incentivized experiments to examine behavioral drivers of trust in customer-supplier relationships. We examine settings where the customer must rely on the supplier’s assistance to make better-informed decisions regarding the supplier’s product, even though the two parties have conflicting pecuniary incentives (e.g., retailer-manufacturer, patient-physician, investor-financial adviser). We compare three prevalent supplier assistance processes: information sharing, advice provision, and delegation. We propose that even if the pecuniary incentives of both parties do not vary from one assistance process to another, the assistance process itself will impact the customer's and supplier's nonpecuniary motives that give rise to trust and trustworthiness, thereby affecting the level of cooperation and payoffs. We test our behavioral predictions through laboratory experiments.
The second paper (Strategic Surge Pricing and Forecast Communication on On-Demand Service Platforms) uses economic theory to examine trust between an on-demand service platform (e.g., Uber, Lyft) and independent workers in the emerging gig economy. A fundamental challenge for many on-demand service platforms is to ensure that their voluntary workforce of independent contractors is available at the right time and right locations to serve consumers at short notice. To address this challenge, on-demand platforms frequently adopt two strategies – sharing market forecasts with workers to encourage them to be available at right locations, and implementing “surge pricing”, whereby the price at a market location (zone) may be dynamically increased based on market conditions. We jointly examine both strategies. We show when and why workers may not trust the market forecasts shared by the platform, thus resulting in poor availability of workers where they are needed. We further show how the platform can strategically use surge pricing to restore trust and facilitate credible forecast sharing. Consequently, and contrary to conventional wisdom, we find that it can be profitable for the platform to use a surge price even at locations that have an excess supply of workers.