Department of Marketing & Entrepreneurship

Spring 2015 Seminar Series

Time: Friday 10:30 a.m. - 12:00 Noon
Location: 365A Melcher Hall
Open to Public: No reservation or registration required.

Note: Topics and Abstracts will be added to this page throughout the semester

Date Speaker Topic
Jan. 23 Adam Duhachek
Indiana
    "Success Contagion: The Transfer of Achievement to Product Evaluation and Consumer Motivation "
  • Click to read Abstract

    Past research has shown that product contagion exists when individuals touch a product and believe properties of the individual transfer to the product, which can then be transferred to another individual. Previously documented forms of contagion involve the transfer of affect from the source to the product, as in instances where a sweater touched by an attractive individual is subsequently evaluated more favorably by a member of the opposite gender. In this article, we hypothesize how skills and abilities can also be made contagious via a process termed ³success contagion.² We hypothesize that goal-related products (such as a bicycle for someone trying to lose weight) are evaluated more favorably when touched or owned by someone who has successfully achieved the same goal. We show this effect occurs only when a relevant goal is activated. Additionally, we show that the use of such products leads to improved performance on goal related tasks via an enhanced motivation mechanism. The implications of these findings for relevant literatures are discussed.

Adam Duhachek
Feb. 13 Aner Sela
Florida
    "On Metacognition and Culture "
  • Click to read Abstract

    Metacognition impacts judgment and decision making, but might its effects vary by culture? Culture shapes the meaning people extract from experiences, and as a result, we suggest it may impact the inferences people draw from metacognitive perceptions. Specifically, whereas cultures with a disjoint agency model (e.g., European-American) see choice as diagnostic of the inner self, cultures with a conjoint agency model (e.g., South-East Asian) see choice more as reflecting external considerations. Consequently, conjoint agency contexts are less likely to use metacognitive experiences that accompany choice as an input to judgments about inner preferences and priorities. Accordingly, we show that Americans – but not Indians – interpreted metacognitive perceptions of choice difficulty, thoughtfulness, and decision-effort as an indication of inner states such as preference certainty and decision importance. Further, priming participants with agency models from the other culture reversed these effects. These findings further understanding of metacognition, culture, and the meaning of choice.

Aner Sela
Feb. 20 Yi Qian
University of British Columbia
    "Intellectual Property Rights and Access to Innovation"
  • Click to read Abstract

    We examine the effect of pharmaceutical patent protection on the speed of drug launch, price, and quantity in 60 countries from 2000-2013. The World Trade Organization required its member countries to implement a minimum level of patent protection within a specified time period as part of the TRIPS Agreement. However, members retained the right to impose price controls and to issue compulsory licenses under certain conditions. These countervailing policies were intended to reduce the potential static losses that result from reduced competition during the patent term. Using detailed patent data at both the product and country levels, we exploit the fact that selection into "treatment" with a post-TRIPS patent is exogenously determined by compliance deadlines that vary across countries. Patents have important consequences for access to new drugs: in the absence of a patent, launch is unlikely. That is, even when no patent barrier exists, generic entry may not occur. Conditional on launch, patented drugs have higher prices but higher sales as well. The price premium associated with patents is smaller in poorer countries. Price discrimination across countries has increased for drugs patented post-TRIPS and prices are negatively related to the burden of disease, suggesting that countervailing policies to offset expected price increases may have had the intended effects.

Juliano Laran
Feb. 27 Song Yao
Northwestern
    "Channel Search and Welfare Implications of Commercial Breaks"
  • Click to read Abstract

    This paper investigates the implication of breaks that interrupt product consumption on consumer welfare. Such breaks have lower utility levels than the consumption utility. Examples of these breaks include the gaps between sequels of video games, updates of smartphone apps, and commercial breaks during television or radio shows. In the case of TV commercial breaks, for example, conventional wisdom dictates that consumers prefer watching TV shows without the disruption of commercial breaks. However, we argue that breaks may improve the welfare of consumers under certain conditions. In particular, when there is so much uncertainty that the consumer is unclear about the exact utility levels of different products, she has to engage in a costly search to resolve the uncertainty before choosing a product. In the context of TV programming, breaks lower the opportunity cost of search, allowing the consumer to sample alternative channels without further interrupting the viewing experience on her current channel. Using data from the Chinese TV market, we estimate a sequential search model to evaluate our conjecture. The data contain a natural experiment: the Chinese government banned all in-show commercial breaks for episode-based TV series on January 1, 2012. This new policy on commercial breaks created exogenous variations in the data that allow us to separately identify heterogenous consumer preference and search cost. Based on the analyses, we have found evidence that the intended improvement in TV viewing experience was limited. Many consumers were worse off due to the ban on commercial breaks, because they could no longer sample alternative channels that were preferable to their current product choices. We also investigate how the timing of breaks affect TV channels’ viewerships, which offers managerial insights about how firms should adjust the timing of breaks so as to improve their sales.

Song Yao
March 2 Kitty Wang
CUHK
    "Can Offline Stores Drive Online Sales?"
  • Click to read Abstract

    The academic literature consistently finds that online and offline channels are substitutes; however, practitioners often emphasize "synergies" between online and offline. In this paper, we use evidence from store openings by a bricks-and-clicks retailer to attempt to reconcile these perspectives. Overall, we find no strong evidence of substitution or of synergies. However, splitting locations by whether the retailer has a strong presence prior to the store opening suggests the coexistence of substitution across channels and complementarity in demand. In particular, in places where the retailer has a strong presence, the opening of an offline store is associated with a decrease in online sales and search. In contrast, in places where the retailer does not have a strong presence, the opening of an offline store is associated with an increase in online sales and search. We provide evidence suggesting that this is driven by a marketing communications role for the offline channel through enhancing brand awareness: We see a large increase in new customers and we see little difference between fit-and-feel products and other products.

Kitty Wang
March 6 Dmitri Kuksov
UT Dallas
    "Signaling Low Margins through Assortment"
  • Click to read Abstract

    Oftentimes, close competitors carry partially overlapping assortments in seeming contradiction to the principle of maximum differentiation. One of the justifications of such practice is that an overlapping assortment with competitive prices on the common products may prevent further consumer search and therefore could be useful even when profits from the overlapping products do not justify the costs of carrying them. In this paper, we examine the validity of this intuition and show that such strategy may indeed be optimal when consumers are uncertain about prices they might find elsewhere and have search costs for discovery of all prices. Specifically, we show that the (larger) assortment with product overlap may signal a “competitive” price of the relatively unique product and prevent further consumer search for a lower price on it. An implication of this finding is that a consumer may rationally behave as if she likes a larger assortment even if the assortment is enlarged by adding products the consumer has no interest in. Furthermore, we show that the optimal pricing strategy may include loss-leader pricing of the common products or products with known costs.

March 13 Leigh McAlister
UT Austin
    CANCELLED
March 27 Dinah Vernik
Rice
    "Competing with Co-Created Products"
  • Click to read Abstract

    The practice of firms co-creating products and services with their customers has a long history in business markets and, with advances in information technology, is now gaining increasing popularity in consumer markets as well. In this research we study the incentives of competing firms to co-create. We analyze the strategic choices of two competing downstream user firms who simultaneously decide whether or not to co-create with an upstream supplier. Within this framework we incorporate, (1) endogenous pricing and effort choice by the upstream supplier and (2) endogenous pricing and effort choices by the downstream users. User firms contemplating co-creation with a supplier are faced with a trade-off. On the one hand they can benefit from the supplier's innovation efforts and therefore obtain a better product than they themselves could produce. On the other hand, they are confronted with the adverse effect of their own innovation efforts spilling over to their rivals via the supplier who would sell the co-created products to all user firms. Our model captures this tension and offers several insights. First, we show that, when users compete in the end consumer market, the supplier can exert lower innovation effort when it co-creates with more users. This result complements the existing literature which shows that without competition between users a supplier exerts more effort when it co-creates with more users. Second, we demonstrate that in the co-creation environment, ex-ante symmetric firms may pursue asymmetric strategies in equilibrium. The asymmetric equilibrium, in which only of the two users co-creates with the supplier, is obtained when the degree of competition between the users is large. Further, we find that for moderate degree of competition both users prefer co-creation, yet the supplier may be better off refusing to co-create with one of them thereby enforcing the asymmetric outcome. Finally, counterintuitively, a higher degree of spillover can actually benefit the co-creating firm in the asymmetric outcome, even though it improves its rival's product.

Dinah Vernik

Fall 2014 Seminar Series

Time: Friday 10:30 a.m. - 12:00 Noon
Location: 365B Melcher Hall (Enter through Suite 365 Lobby)
Open to Public: No reservation or registration required.

Note: Topics and Abstracts will be added to this page throughout the semester

Date Speaker Topic
Sept. 12 Gerry Tellis
USC
    "Crowdsourcing Innovations"
  • Click to read Abstract

    Due to the growth of Web 2.0, crowdsourcing ideas for innovation has now become important for ideation. The success of crowdsourcing depends on the number and quality of ideas generated by ideators (participants) in the contest. With few exceptions (e.g., Bayus 2013 and Girotra, Terwiesch, and Ulrich 2010), research is sparse as to what characteristics of ideators lead to good quality ideas. We test for four such characteristics, prior success, time in contest, social learning, and productivity. Our theory come from experimental studies while our data come from 9 crowdsourcing competitions conducted for large corporations in real markets.

    We find that social learning has a significant positive influence on success. However, the measure of social learning that best associates with success is betweenness centrality not network centrality. Contrary to Terwiesch and Ulrich (2010), productivity per day is negatively related to success. After controlling for other variables, time has a negative effect on success. This means merely sitting in the contest and not participating in order to take and not give hurts success. Most importantly, contrary to Bayus (2013), prior success is positively related to current success This result suggests that talent rather than fixation is an important driver of ideator’s success. We discuss theoretical and managerial implications.

Gerry Tellis
Sept. 26 Barbara Bickart
Boston
    "Sharing Secrets with Strangers on Social Media: Can You Make Word-of-Mouth More Persuasive via Intimate Self-Disclosure?"
  • Click to read Abstract

    Disclosure of intimate personal stories and self-relevant emotions is an essential part of many social media conversations. Yet, despite the frequent occurrence of such intimate self-disclosure on social media, its influence on the persuasive impact of a communicator is surprisingly limited. This research examines the influence of sharing a secret (i.e., the disclosure of personal information involving risk and vulnerability) on an influencer's ability to persuade others. Overall, we find that the effectiveness of sharing secrets as a persuasive tactic depends on the influencer's relationship (i.e., communal versus exchange) with the audience and the intimacy of the secret being shared. We test these predictions in the context of a health and fitness blog (Study 1 to 3) and replicate in a technology blog setting (Study 4). Specifically, in Study 1 we show that when influencers have a communal relationship with their audience, purchase intentions and willingness to pay for a recommended fitness book increase relative to a low disclosure control condition, while when the influencer has an exchange relationship with the audience, the opposite pattern is observed. These effects are mediated by trust in the communal condition and by the perceived violation of relationship norms in the exchange condition. In Study 2, we replicate the communal condition results from Study 1 and further show that when a secret is perceived as being too intimate, sharing backfires even in a communal relationship. In Study 3, we show that sharing a secret can be an effective persuasive tactic in an exchange relationship as long as the audience solicits the sharing. In this case, violation of relationship norms is no longer the mediating variable, but instead, the increased persuasion is mediated by a norm of reciprocity. Finally, Study 4 replicates the findings in a technology blog context. Results from these four studies extend our knowledge of the relationship between self-disclosure and persuasion and provide practical guidelines for when an influencer’s communication will be helped or hurt by the use of these tactics.

Barbara Bickart
Oct. 3 Jean-Pierre Dubé
Chicago
    "Self-Signaling and Pro-Social Behavior: a cause marketing mobile field experiment"
  • Click to read Abstract

    We test self-signaling theory using two large-scale, randomized controlled field experiments. Mobile phone users are randomly sampled to receive promotional offers for movie tickets via SMS technology. Test groups are exposed to different pre-determined levels of price discounts and charitable donations tied to the ticket purchase. The main effects of price discounts and charitable donations increase ticket demand. However, the combination of both discounts and donations can decrease ticket demand. In a post-purchase survey, the same subjects self-report lower ratings of “feeling good about themselves” as the motivation for buying a ticket when discounts and donations are both large. These findings are consistent with a self-signaling theory, whereby the discount crowds out the consumer's “warm-glow” feeling from the charitable donation. Alternative behavioral explanations are ruled out. A structural model of demand with self-signaling is fit to the data using a constrained optimization algorithm to handle the potential multiplicity of equilibria. The estimated preferences reveal that consumers do not derive consumption utility from donations bundled with the ticket. However, they derive significant diagnostic utility: the warm-glow feeling of the self-perception of valuing charitable donations.

Jean-Pierre Dubé
Oct. 10
12-1:30 p.m.
Cassie Mogilner
Wharton
    "It's Time for Happiness"
  • Click to read Abstract

    How should people spend their time to enjoy greater happiness? Cassie Mogilner will be presenting two projects that address this question. The first examines the happiness enjoyed from ordinary and extraordinary experiences, revealing age to play a critical role. The second examines the happiness enjoyed from spending time on highly varied (vs. similar) activities, revealing the interval of time within which the activities occur to play a critical role. Together these findings provide insight into happy ways to spend time and highlight time as a key ingredient for experiencing happiness.

Cassie Mogilner
Oct. 31 Leonard Lee
NUS
    "Price Promotions and Their Negative Effects"
  • Click to read Abstract

    The impact of price promotions has attracted substantial interest among scholars who seek to understand how people make everyday purchase decisions. While past research has shown that price promotions often translate into real economic savings, guide buying decisions, encourage trial of new products, and make consumers feel smart and good about themselves, other work has shown that price promotions can reduce perceived product efficacy, lower price expectations, increase price sensitivity, and negatively impact brand sales and consumer loyalty in the long run. In this session, I discuss a number of recent findings that highlight additional downsides of price promotions and their respective psychological mechanisms. Specifically, price promotions may decrease consumption enjoyment particularly when people consume the products that they have purchased at a discount after a delay (vs. immediately) following the transaction, increase consumer impatience, and reduce people’s willingness-to-buy by momentarily increasing their subjective importance of the prudent-spending goal.

Leonard Lee
Nov. 7 Qiaowei Shen
Wharton
    "Upselling vs. Upsetting Customers"
  • Click to read Abstract

    Upselling is a common practice in business that is associated with high profit margin. Yet we find empirical evidence 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. On the one hand, sales representatives are motivated to upsell by the monetary incentive in the form of commission. On the other hand, sales representatives have the intrinsic motivation to achieve customer satisfaction, which is not tied to monetary reward. As exerting effort is costly, an agent optimally allocates effort in the upselling practice and in serving customers to maximize personal utility. Using a comprehensive data set from a national car rental company that practices upselling, we estimate a model of customers' decision to purchase add-on products at the counter and customer satisfaction together with counter representatives' effort allocation decision. We conduct counterfactual analysis to evaluate the implications of different incentive schemes on upselling, customer satisfaction and future business.

Nov. 14 Puneet Manchanda
Michigan
Puneet Manchanda