|09/08/2017||10:30 AM-12:00PM||Union South||Dr. P.K. Kannan||Robert H. Smith School of Business, University of Maryland||Selling The Premium in The Freemium: Impact of Product Line Extensions|
|09/08/2017||1:30 PM-3:00PM||Union South (Lower Level)||Dr. Rebecca W. Hamilton||McDonough School of Business, Georgetown University||See Synopsis||Paper Pending|
|09/09/2017||11:15 AM-12:45PM||Memorial Union||Dr. Kate White||University of British Columbia||See Synopsis||Paper Pending|
|11/23/2017||9:00 AM-10:30AM||Grainger 4151||Szu Chi Huang||Stanford University||See Synopsis||When, Why, and How Social Information Avoidance Costs You in Goal Pursuit|
|02/09/2018||9:00 AM-10:30AM||Grainger 4151||Jian Ni||John Hopkins Carey Business School||See Synopsis||Upselling Versus Upsetting Customers? A Model of Intrinsic and Extrinsic Incentives|
|03/02/2018||9:00 AM-10:30AM||Grainger 4151||Dr. Elizabeth Webb||Columbia's Graduate School of Business||See Synopsis||The Effect of Perceived Similarity On Sequential Risk-Taking|
|03/02/2018||9:00 AM-10:30AM||Grainger 4151||Dr. Ganesh Iyer||University of California, Berkeley, Haas School of Business||See Synopsis||Multi-market Value Creation and Competition|
|04/06/2018||12:00 PM- 1:30PM||Grainger 3070||Christopher K. Hsee||University of Chicago, Booth School of Business||See Synopsis||General Evaluability Theory|
|04/13/2018||9:00 AM-10:30AM||Grainger 4151||Marie-Agnes Parmentier||HEC Montréal||See Synopsis||Paper Pending|
|04/27/2018||9:00 AM-10:30AM||Grainger 4151||Naomi Mandel||Arizona State University, W. P. Carey School of Business||See Synopsis||Paper Pending|
|05/04/2018||9:00 AM-10:30AM||Grainger 4151||Elie Ofek||Harvard Business School||See Synopsis||When and How to Diversify—A Multi-Category Utility Model of Consumer Response to Content Recommendations|
Selling the Premium in the Freemium: Impact of Product Line Extensions
Dr. P.K Kannan, Professor, McDonough School of Business, Georgetown University
Freemium is a widely adopted business model in which a basic version of product is provided free of charge in order to acquire a large group of customers, and a fraction of the customer base pays a price to access a premium version with a different and/or increased functionality. The objective of this paper is to investigate how to increase the demand for the premium version in the presence of the free product. Specifically, we examine the effectiveness of extending the product line on spurring demand for the existing premium version, and investigate the underlying drivers of the effects. We conduct a randomized field experiment with a content provider, the National Academies Press (NAP), which offers a free PDF format of book titles as well as sells a paperback format of the same titles online. Overall, we show that book titles assigned with an additional premium format, either an ebook or a hardcover format, have a higher sales of paperback than those in the control condition. Second, the positive impact on paperback sales is stronger for titles which are more popular or lower in price, and the effect of introducing the ebook format is higher when the ebook price is closer to the paperback price. Finally, and equally importantly, through analyzing customer choices at the individual level, we establish the existence of compromise effect and attraction effect in the empirical setting. Based on our findings we provide specific managerial recommendations to increase the sales of premium products when a free product is available for customers.
Using Technology Products to Signal Social Connectedness
Dr. Rebecca W. Hamilton, Professor, McDonough School of Business, Georgetown University
Consumers frequently use technology products, such as smartphones or laptop computers, in places where their usage can be observed by others. Knowing that they will be observed, consumers may hold their smartphone in their hand to make themselves appear more socially connected when they are alone in a public place, yet place their smartphone face down on the table to let others know they are being attentive when they are with a group. We propose that because technology products themselves have different associations (e.g., a smartphone is associated with affiliation, while a laptop is associated with achievement), their usage will be interpreted differently in the same social situations. In a series of five studies, we find that the inferences others make about consumers using technology products vary systematically based on the product’s usage associations, how the consumer is using the product, and whether the consumer is alone or in a group. Using a technology product associated with affiliation, such as a smartphone, increases the perceived social connection of a consumer who is alone but decreases the perceived social connection of a consumer who is part of a face-to-face group. In contrast, when a consumer uses a technology product not associated with affiliation, such as a laptop, we do not observe this social context-dependent reversal in inferences about social connection.
Embracing the Experiential: Reminders of Mortality Increase Consumer Preferences for Experiences Over Material Goods
Dr. Kate Katherine, Professor, The University of British Columbia
The current research examines the effect of mortality salience on consumer preferences for experiential versus material options. We demonstrate that people express a greater desire to engage in experiential rather than material consumption when mortality is salient (vs. not salient). We propose that mortality reminders activate a desire for meaning, which, in turn, leads to preference for options that are relatively more experiential as opposed to material in nature. These effects are mediated by an activated desire for meaning. Furthermore, the observed effects are heightened among those high in an individual difference measure of the tendency to seek out meaning (i.e., intrinsic value orientation). Finally, we provide additional evidence for the role of meaning-seeking in driving the observed effects, by examining the moderating role of meaning-fulfillment. In particular, the tendency to prefer experiential over material purchases in response to mortality salience is eliminated when people are given an opportunity to fulfill the desire for meaningfulness via an alternative route. Taken together, the results suggest that, in response to mortality threats, individuals will be relatively more likely to seek out experiences rather than material goods in order to search for meaning in their lives.
When, Why, and How Social Information Avoidance Costs You in Goal Pursuit
Szu Chi Huang, Associate Professor, Stanford Graduate School of Business
Consumers nowadays have easier and richer access to information about social others pursuing goals similar to their own (e.g., through a Fitbit device, the Endomondo mobile app, and stickK.com). This research shows that social information may not always be welcomed and explores the questions of when consumers avoid such information, why they avoid it, and the downstream motivational consequences of avoiding it.
Upselling Versus Upsetting Customers? A Model of Intrinsic and Extrinsic incentives
Jian Ni, Associate Professor, John Hopkins Carey Business School
Upselling is a common practice in business that is associated with high proﬁt margin. Yet empirical evidence suggests that upselling is negatively correlated with customer satisfaction. In this paper, we study the relationship between upselling and customer satisfaction in the framework of sales agents’ incentive.
The Effect of Perceived Similarity On Sequential Risk-Taking
Dr. Elizabeth Webb, Associate Professor, Columbia Business School
We examine how perceived similarity between sequential risks affects individuals’ risk-taking behavior. Specifically, in six studies we find that in sequential choice settings individuals exhibit significant positive state dependence in risk-taking: they are more likely to take a risk when it is similar to a previously taken risk than when it is dissimilar. O ur results demonstrate that the similarity structures that exist between risks have a significant effect on risk-taking preferences in dynamic choice settings.
Multi-market Value Creation and Competition
Dr. Ganesh Iyer, Professor, University of California, Berkeley, Haas School of Business
We analyze multi-market interactions between firms which must invest limited budgets in value (surplus) creation as well as in competitive rent-seeking activities. Firms are differentiated on a line segment and compete for multiple markets/prizes which differ in the relative effectiveness of each firm's competitive rent-seeking spending. Each firm faces a dual trade-off: First, they must choose how much to invest in value creation versus to spend in rent-seeking competition. Second , they must decide on how to allocate resources across the different markets. Counter to what one might expect, greater firm differentiation actually intensifies the competition in the middle market.
General Evaluability Theory
Christopher K. Hsee, Professor, University of Chicago, Booth School of Business
A central question in psychology and economics is the determination of whether individuals react differently to different values of a cared-about attribute (e.g., different income levels, different gas prices, and different ambient temperatures). Building on and significantly extending our earlier work on preference reversals between joint and separate evaluations, we propose a general evaluability theory (GET) that specifies when people are value sensitive and when people mispredict their own or others’ value sensitivity. The GET can explain and unify many seemingly unrelated findings, ranging from duration neglect to affective forecasting errors and can generate many new research directions on topics ranging from temporal discounting to subjective well-being.
Now You See Them, Now You Don’t: What Happens When Person Brands become Highly Visible Strategic Employees?
Marie-Agnes Parmentier, Associate Professor, HEC Montréal
“If once upon a time the top job at a big brand was the ultimate prize for many designers -- and once you got it, you didn't let go till they pried the sketch pad from your withered hands -- now the average term seems to be three years or less.” (NYT, December 15, 2016)
Creative directors can be regarded as person brands who – for shorter or longer periods of time – become highly visible strategic employees, affecting both the products and the profile of the firms they work for. By analyzing data regarding creative directors who enter and exit employment at luxury fashion houses, this paper builds upon and extends current theoretical understandings of person branding. Specifically, it addresses two research questions: (1) what are the consequences for person brands of becoming allied with established firms and (2) how are these established firms affected by the formation and termination of these alliances? We draw on both assemblage theory and Bourdieu’s field theory as enabling lenses in our analysis. We find that while it may seem that turnover is costly and/or undesirable for both person brands and the firms that hire them as employees in highly visible strategic positions, rapid turnover may be happening because there are benefits to short term affiliations for both parties.
Fluid Compensation: The Roles of Self-Construal and Identity Holism
Prior research has shown that when consumers experience a threat to the self, they may seek products or activities to affirm the self in important domains that are either related (within-domain compensation) or unrelated (fluid compensation) to the threat (Mandel et al., 2017). While prior research has shown that people cope with self-threat by engaging in within-domain compensation, the evidence for fluid compensation is relatively scant. The current research addresses this gap by examining the conditions under which consumers use fluid compensation to offset a self-threat, and the underlying mechanism. The results of five experiments show that people with an interdependent self-construal have a higher willingness to engage in fluid compensation after a self-threat (vs. control), relative to people with an independent self-construal. We triangulate our findings by operationalizing self-construal as a cultural difference (Americans vs. Chinese), by measuring it on a scale, and by priming it in the laboratory. Our findings suggest that a psychological threat can prompt people with an interdependent self-construal to view their identities as more holistic, and thus they are better able to self-affirm by boosting their self-image in domains unrelated to the threat.
When and How to Diversify—A Multi-Category Utility Model of Consumer Response to Content Recommendations
Sometimes we desire change, a break from the same, or an opportunity to fulfill different aspects of our needs. Noting that consumers seek variety, several approaches have been developed to diversify items recommended by personalized recommender systems. However, current diversification strategies operate under a one-shot paradigm–without considering the evolution of preferences due to recent consumption. Therefore, such methods often sacrifice accuracy. In the context of online media consumption, we show that by recognizing that consumption in a session is the result of a sequence of utility maximizing selections from various categories, one can increase recommendation accuracy by dynamically tailoring the diversity of suggested items to the diversity sought by the consumer. Our approach is based on a multi-category utility model that captures a consumer’s preference for different categories of content, how quickly she satiates with one category and wishes to substitute it with another, and how she trades off her own costly search efforts with selecting from a recommended list to discover new content. Taken together, these three elements allow us to characterize how an individual selects a diverse set of items to consume over the course of a session, and how likely she is to click on content recommended to her. We estimate the model using a clickstream dataset from a large media outlet and apply it to determine the most relevant content to recommend at different stages of an online session. We find that our approach generates recommendations that are on average about 10% more accurate than optimized alternatives and about 25% more accurate than those diversified using existing diversification strategies. Moreover, the proposed method recommends content with diversity that more closely matches the diversity sought by readers—exhibiting the lowest concentration-diversification bias when compared to other personalized recommender systems. Using a policy simulation, we estimate that recommending content using the proposed approach would result in visitors reading 23% additional articles at the studied website and deriving 35% higher utility. This could lead to immediate gain in revenue for the publisher and longer-term improvements in customer satisfaction and retention at the site.