2018 Marketing Science Back Matterfinal

Marketing Science back matter_Marketing Science 2018 5/29/18 2:53 PM Page 1
TECHNICAL SESSIONS
Thursday, 8:30AM - 10:00AM
n TA01
Room 32, Alter Hall
This Technical Session listing, which provides the Consumer Search
most detailed information. The listing is presented General Session
chronologically by day/time, showing each session and Chair: Rajdeep Grewal, University of North Carolina, Chapel Hill, NC,
the papers/abstracts/authors within each session. 27599, United States, grewalr@unc.edu
1 - A Model of Online Product Search with Endogenous
Review Sampling
Marton Varga, INSEAD Business School, Boulevard de Constance,
The Session Codes Fontainebleau, 77305, France, marton.varga@insead.edu,
Paulo Albuquerque
The authors propose a structural model of online search with endogenous
TA01
product page and review sampling, subject to search costs. Product’s utility to
Room number. Room locations are consumers comes from three sources: (i) product characteristics, displayed in the
also indicated in the listing for each category page and thus known to the consumer before product search; (ii)
session. additional product characteristics revealed upon sampling the product page; (iii)
an experiential-related shock, representing personal satisfaction with the product
upon purchase. While searching, consumers update their beliefs about the
distribution of the third term by reading product reviews and thereby mitigate
Time Block. Matches the time related uncertainty, at a cost. The authors show that there exists an optimal
strategy for product and review sampling and apply the model to study consumer
The day of blocks shown in the Program search and purchase behavior at an online retailer.
Schedule.
2 - Inferring Automobile Market Structure from Search Data
Pradeep Chintagunta, University of Chicago, Chicago, IL,
United States, pradeep.chintagunta@ChicagoBooth.edu,
Time Blocks Jae Hyen Chung, Sanjog Mishra
In this paper, the authors present a new approach that allows inferring the
Thursday market structure from aggregate market share data and individual search data.
Using a new likelihood-based estimator that leverages the joint likelihood of the
A — 8:30am - 10:00am search and purchase decisions, authors obtain market structure while
incorporating consideration sets into the analysis. Market structure is based on a
B — 10:30pm - 12:00pm factor-analytic approach that decomposes the distribution of preferences and that
is embedded in the estimation of the model parameters. The authors apply the
C — 1:30pm - 3:00pm method to a simulated data set to demonstrate that it provides consistent
estimates and apply it to SUV market share data and individual online vehicle
D — 3:30pm - 5:00pm search sequence data to demonstrate its application in an empirical context.
Friday Comparing the results from a multinomial probit model that analyzes the market
structure only with market share data, the authors show the importance of taking
A — 8:30am - 10:00am consideration sets into account when studying the nature of competitive
interactions in the marketplace.
B — 10:30am - 12:00pm
3 - Cost of Webrooming: A Case of Automobiles Market
C — 1:30pm - 3:00pm Guneet Kaur Nagpal, UNC-Chapel Hill, Kenan Flagler Business
School, Chapel Hill, NC, 27514, United States,
D — 3:30pm - 5:00pm guneet_kaur@kenan-Flagler.unc.edu, Rajdeep Grewal
Saturday Webrooming refers to the shopping strategy wherein shoppers first search the
products online and then visit stores to purchase them. A typical shopper in the
A — 8:30am - 10:00am automobiles category is a webroomer, who spends on average 11.5 hours online
B — 10:30am - 12:00pm before visting 1-2 dealerships in the proximity. The authors seek to estimate the
cost of webrooming by first providing an evidence that there exist two mutually
C — 1:30pm - 3:00pm exclusive sequential stages of consumer search in the automobiles category, i.e.
online search followed by travel to automobile dealerships; and then estimating
D — 3:30pm - 5:00pm the consumer search cost in these two stages. For the first stage, which is the
brand-choice stage, the authors estimate the automobile demand in presence of
price uncertainty about the in-market brands, and the modeling approach
rationalizes the observed consideration sets as an outcome of consumers’ online
search effort. For the second stage, which is the dealership-choice stage,the
authors rationalize the price dispersion with the variation in consumer travel
costs. Authors apply the models to the purchase behavior of 70,000 unique
autoshoppers who are webroomers.
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TA02 INFORMS MARKETING SCIENCE – 2018
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process production, and whether and when a manager should choose to
automate the production process. Comparing the costs of an automated
production system to one that is not, we show that while automation provides
Room 33, Alter Hall significant cost-cutting benefits, it may still result in an overall costlier system
Digital Economy I: Automation, AI, and because of the increase in the cost of incentivizing the remaining employees. We
Online Technology show that as some tasks in production can be automated and automation
becomes gradually more cost-efficient, human teams are less likely to be
General Session employed under cooperative contracts which reward an employee for his peer’s
achievement but rather under competitive contracts which reward an employee
Chair: Pinar Yildirim, University of Pennsylvania, Philadelphia, PA, for achievements better than his peer.
19104, United States, pyild@wharton.upenn.edu
1 - Human Judgment and A.I. Pricing
Avi Goldfarb, University of Toronto, Rotman School of
Management, 105 St George Street, Toronto, ON, M5S 3E6,
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Canada, avi.goldfarb@rotman.utoronto.ca, Ajay Agrawal, Room 34, Alter Hall
Joshua Gans
Managing Information in Marketing
Recent artificial intelligence advances can be seen as improvements in prediction.
We examine how such predictions should be priced. We model two inputs into General Session
decisions: a prediction of the state and the payoff or utility from different actions Chair: Doug J. Chung, Harvard Business School, Boston, MA, 02163,
in that state. The payoff is unknown, and can only be learned through United States, dchung@hbs.edu
experiencing a state. It is possible to learn that there is a dominant action across
all states, in which case the prediction has little value. Therefore, if predictions 1 - Does Restricting Information Make the Crowd More Accurate?
cannot be credibly contracted upfront, the seller cannot extract the full value, and Vineet Kumar, Yale University, 131 Dartmouth Street, 4th Floor,
instead charges the same price to all buyers. Boston, MA, 02116, United States, vineet.kumar@yale.edu
2 - The Editorial Power of Newspapers Crowdsourcing has been widely used for fairly accurate information gathering,
Markus Mobius, Microsoft Research, Cambridge, MA, 02142, and digital technologies enlarge the scope. We examine how herding in
United States, mobius@microsoft.com, Susan Athey, Jeno Pal, crowdsourcing can arise based on how much information is made available to
participants in such a crowd setting. Using a randomized experiment in
Sida Peng partnership with a financial information provider, we evaluate how users who
Newspaper have agenda setting power on their landing pages: a newspaper can receive different informational treatment respond and how overall quality and
prioritize articles in terms of (a) whether to cover a story at all, (b) how quantity of information can be enhanced.
prominently to display a story (in terms of horizontal and vertical placement as
well as font size). At the same time, readers of a newspaper have preferences over 2 - Using Deep Learning to Overcome Privacy and Scalability Issues
news articles which affect the order in which they consume news. We separately in Customer Data Transfer
estimate the agenda-setting power of newspapers as well as reader preferences Clarence Lee, Cornell University, 401b, Sage Hall, Ithaca, NY,
using a unique dataset of scraped US newspaper landing pages which record the 14853, United States, clarence.lee@cornell.edu
x/y position of each headline in 30 minute intervals. Disentangling these two
Customer privacy is becoming an increasingly important topic for marketers.
forces has many interesting applications. For example, a frequent criticism of
Recent high profile hacks of databases containing sensitive customer information,
aggregators and other news intermediaries is that they wrest editorial control
and the growing need to build data infrastructures sufficient to support analysis of
from newspapers and therefore reduce diversity of opinion. However, this
“big” data, present nontrivial obstacles to researchers seeking to utilize individual-
argument implicitly assumes that newspapers have significant agenda setting
level customer data from firms. In this paper, I show that recent developments in
power. Agenda setting power also raises the question of “optimal” agendas: are
machine learning may enable researchers to transfer models, instead of data, as a
newspaper agendas tailored to the preferences of the most opinionated readers or
potential alternative to the process of anonymizing and sampling customer data
towards the median reader? This questions matters in the light of increasing
for release. I demonstrate how effectively several types of deep learning models
media fragmentation which might increase news consumption polarization if
can preserve desired characteristics of original data, and compare estimation and
moderate readers read more biased news.
counterfactual results as estimated from real versus the synthetic customer data
3 - Information Shocks and Internet Silos: Evidence from Creationist generated by the transferred models.
Friendly Curriculum 3 - The Value of Firm-initiated and User-initiated Quality Signals:
Ananya Sen, MIT, Cambridge, MA, United States, An Empirical Analysis of Apartment Rental Platform
ananyasen100@hotmail.com, Catherine Tucker Lingling Zhang, University of Maryland, College Park, MD, United
Studying factors that influence adoption of new products and technologies lies at States, lingzhang@rhsmith.umd.edu, Fan Feng, Vithala R. Rao
the heart of marketing. In this paper, we study a manager’s decision to adopt
Information asymmetry is an acute problem faced by many service-oriented
automation for a production process. Automation offers efficiency by generating
platforms such as apartment rental platforms. Apartment renters (or consumers in
consistent high input at low operation costs. But at the same time, it reduces the
general) typically have less information about the quality of the apartment than
interaction among employees and reduces a manager’s ability to take advantage
the platform or the provider, causing inefficiency in matching. In this context,
of employees’ peer monitoring capacity. We study how automating some tasks in
there is hardly any repeated transactions and hence no opportunity for providers
a production process influences the effort of the employees working on the same
to develop their reputations. Without a reputation system, both platforms and
process production, and whether and when a manager should choose to
providers necessarily use various other means to signal quality. In this research,
automate the production process. Comparing the costs of an automated
we study the effect of platform-initiated and providerinitiated quality signals. We
production system to one that is not, we show that while automation provides
collaborate with a leading online apartment rental platform in an Asian market.
significant cost-cutting benefits, it may still result in an overall costlier system
Our dataset includes detailed records on more than 540,000 listings from a major
because of the increase in the cost of incentivizing the remaining employees. We
metropolitan city. The platform issues a quality badge for selected apartments,
show that as some tasks in production can be automated and automation
which we label as firm-initiated signals. Meanwhile, apartment owners (the
becomes gradually more cost-efficient, human teams are less likely to be
platform’s business users) provide text description to signal quality, which we
employed under cooperative contracts which reward an employee for his peer’s
label as user-initiated. We perform text mining to identify the most informative
achievement but rather under competitive contracts which reward an employee
features from the unstructured information provided by the business users. Given
for achievements better than his peer.
that the quality signals may be determined endogenously, we adopt the causal
4 - Men and Machine: When Should a Firm Adopt Automation? forest method (Wager & Athey 2017) with matching and form the identification
Mustafa Dogan, Carnegie Mellon University, Pittsburgh, PA, strategy by utilizing a large set of covariates. We focus on the heterogenous effect
United States, mdogan@andrew.cmu.edu, Pinar Yildirim of quality signals and quantify how the effect varies by key characteristics of the
apartments. Our research has direct implications on how platforms and service
Studying factors that influence adoption of new products and technologies lies at providers with limited reputation information can influence consumer choices
the heart of marketing. In this paper, we study a manager’s decision to adopt through the disclosure of quality information.
automation for a production process. Automation offers efficiency by generating
consistent high input at low operation costs. But at the same time, it reduces the
interaction among employees and reduces a manager’s ability to take advantage
of employees’ peer monitoring capacity. We study how automating some tasks in
a production process influences the effort of the employees working on the same
2
INFORMS MARKETING SCIENCE – 2018 TA06
4 - The Comprehensive Effects of Sales Force Compensation: scale panel discussion series for an exploratory pre-analysis. To estimate the
A Dynamic Structural Analysis of Performance and Selection model, we conducted a large-scale field experiment in cooperation with a major
Doug J. Chung, Harvard University, Morgan Hall fashion and sporting goods retailer. Results suggest that consumer engage in
mental trade-offs of privacy concerns and benefits - so-called privacy calculus.
161 Soldiers Field, Boston, MA, 02163, United States,
The relationship between privacy concerns and benefits from personalized
dchung@hbs.edu, Byungyeon Kim advertising seems to be mediated by the extent of customer’s imperfect
We provide a comprehensive model of salespeople’s behavior in response to information. By exploiting a large-scale quasi-experiment in cooperation with an
compensation plans. The model takes into account many of the key behavioral online retailer for furniture, interior design, and home textiles, study 2 quantifies
elements that constitute a realistic sales force setting; present-bias, forward the effect of opt-out on consumer behavior. The findings suggest that consumer
looking behavior, allocation of effort, and stay or leave decision of a salesperson. opt-out is economically meaningful. However, without more structure, it is not
Combined, the paper provides insights on how different components of possible to conclude what part of the effect was due to information asymmetries.
compensation affect performance and selection on heterogeneous salespeople. In To analyze this problem, we set up a structural model of advertising avoidance
addition, the paper introduces a key methodological contribution to the and use the additional restrictions that the model provides to estimate its
marketing literature. We provide a formal proof that distance-to-quota act as an parameters. Estimates are used for counterfactual simulations.
exclusion restriction that can be used to identify discount factors in an infinite
horizon setting. In addition, we identify conditions under which a quasi-
2 - Duration of Advertising Effects on Brand Choice: How do
hyperbolic discounting model is identified. Empirically, we find evidence of Recency Effects Change According to Time from Ad Exposure to
present-bias in salespeople’s behavior. Category Purchase?
Hiroshi Kumakura, Professor / Visiting Scholar, Chuo University /
New York University, 742-1 Higashi-Nakano, Hachioji, Tokyo, 192-
n TA05 0393, Japan, kumakura@tamacc.chuo-u.ac.jp
The principle of recency, closeness in time between advertising exposure and
Room 232, Alter Hall category purchase, has been proposed to discuss short-term and behavioral ad
Panel Discussion on Digital Marketing Applications of effects on brand choice in advertising literature. This principle asserts that a single
ad exposure near purchase occasion exerts a powerful influence on sales, and the
AI and Deep Learning I principle is useful for especially digital and mobile marketing focusing on the
consumer who is close to making a purchase decision. In recency advertising
Invited Session planning, although the timing of ad exposure is the most important and is
1 - Panel Discussion on Digital Marketing Applications of AI and attributed to the duration of ad effects, the duration by a single ad exposure has
Deep Learning I rarely been discussed. Hence, we discuss 1) how long advertising effects on brand
Moderator: Xueming Luo, Temple University, 1801 Liacouras choice by a single ad exposure continue, 2) how they are strong, and 3) how they
Walk, Philadelphia, PA, 19122, United States, luoxm@temple.edu decline. Namely, we measure recency effects and show how they change
according as time passes, by estimating the probability densities of time (hours)
AI and DL algorithms will leverage big and rich data like sentiment, image, video, from consumer’s ad exposure to his/her category purchase, and by focusing the
and diverse subtleties of human interactions in one end-to-end process, not gap of shapes among these probability densities. Here, advertising effects of an
captured by traditional marketing. Empowered by deep neural networks, new individual consumer on an individual brand per outlets are to be discussed with
marketing applications in the industry are astonishing (academic works are hierarchical Bayes model. One of managerial implications of this research is that
lacking): smart chatbots with personality, consumer classification and unmet stronger recency effects are observed in a consumer having no loyal brand and in
needs detection, user preference discovery and recommendation, social semantics outlets of convenience stores and vending machines, in which a consumer may
and personalized content curation, digital fraud and data breaches prevention, use the product at or near a store soon after his/her purchase and the price is
intelligent customer service and ad targeting, omnichannel marketing and higher without price promotion, than in supermarkets.
dynamic pricing, and autonomous retailing and platform ecosystems.
3 - A Model Integrating the Multi-agent Simulation and State-space
Panelists Representation for Understanding the Interaction Effect of
John R Hauser, MIT, Sloan School of Management, Advertising and WOM
77 Massachusetts Ave., E62-538, Cambridge, MA, 02139, Eiji Motohashi, Associate Professor, Yokohama National University,
United States, hauser@mit.edu 79-4 Tokiwadai, Hodogaya-ku, Yokohama, 2408501, Japan,
Harikesh Nair, Assistant Professor of Marketing, motohashi@ynu.ac.jp, Sotaro Katsumata, Akihiro Nishimoto
Stanford University, Stanford, CA, United States,
This study aims to propose the model integrating the multi-agent simulation and
harikesh.nair@stanford.edu state-space representation and understand the interaction effect of advertising
Xiao Liu, New York University, Stern School of Business, 44 W 4th and WOM. WOM has had important role in consumer’s purchase behavior, so
Street, New York, NY, 10013, United States, xliu@stern.nyu.edu companies have to consider the effect of WOM in order to implement the
effective advertising planning. We incorporate the dynamics among consumers
Sanjog Misra, University of Chicago Booth School,
and heterogeneity in purchase decision making to the model. The particle filter is
5807 S Woodlawn Ave, Suite 369, Chicago, IL, 60637, used to estimate the model. It is shown that the proposed model is beneficial to
United States, sanjog.misra@chicagobooth.edu predict sales and understand the consumer’s purchase decision making process.
4 - Understanding the Effects of Cross-media Consumption During
n TA06 Super Bowl Advertising
Prasad Naik, University of California, Graduate School of
Room 234, Alter Hall Management, Davis, CA, 95616, United States,
Panaik@ucdavis.edu, Neeraj Bharadwaj, Michel Ballings
Advertising Effects
Consumers increasingly view a television program on a primary screen and attend
Contributed Session to social media on a second screen. During such cross-media consumption, how
Chair: Eiji Motohashi, Yokohama National University, 79-4 Tokiwadai, do stimuli from multiple screens influence viewers’ emotional response? To
Hodogaya-ku, Yokohama, 2408501, Japan, motohashi@ynu.ac.jp address this open question, we construct a dataset over a two-year span, extract
factors from structured and unstructured variables, and estimate the effects of
1 - Consumer Privacy, Imperfect Information, and Marketing those factors from primary (i.e., television ads during the Super Bowl) and
Avoidance: Evidence from Retargeting secondary screens (i.e., consumers’ Facebook posts) on ad likability. Results show
Alex Eiting, TU Braunschweig, Schleinitzstrasse 23a, that both screens contribute to the explained variance. A novel aspect of this
Braunschweig, 38106, Germany, a.eiting@tu-bs.de study is to discover, based on the psycholinguistic literature, the three thinking
styles (viz., formal, analytic, narrative) using not only the “bag of words”
The most common method of identifying and tracking online consumers’ activity approach, but also the grammatical and syntactical role words play, thereby
involves the placement of cookies on a consumer’s hard drive that are then transcending the typical sentiment analysis and broadening our understanding of
offered back to the website during subsequent visits by the consumer. As online simultaneous media consumption.
advertising becomes more personalized, firms run the risk that tracking will elicit
a “creepy” feeling of being followed and that customers will find the advertising
invasive of their privacy and that reactance will lead them to resist the ad’s
appeal. Against this background, the upcoming General Data Protection
Regulation (GDPR) builds on the European Data Protection Directive 95/46/EC
with additional key requirements including tighter requirements for obtaining
valid consent to the processing of personal data. So any “do not track” mechanism
is assumed to facilitate consumer self-selection by their expected net benefit. To
learn about the motivations and mechanisms behind consumer opt-out and to set
up our econometric model, we accessed Federal Trade Commission’s fairly large-
3
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Room 237, Alter Hall Room 238, Alter Hall
Retailing I CB - Unfamiliarity & Choice
Contributed Session Contributed Session
Chair: Yoonju Han, Kelley School of Business, Indiana University, Chair: Paul Wang, University of Technology Sydney, Marketing
1309 E. 10th Street, Hodge Hall 2100, Bloomington, IN, 47405, Discipline Group, P.O. Box 123, Sydney, NSW 2007, Australia,
United States, yjhan@indiana.edu paul.wang@uts.edu.au
1 - The Effect of Competition on Retail Price and Variety Decisions: 1 - Consumer Preference for Opaque Products
Theory and Evidence Lucas Stich, Ludwig Maximilians Universität München,
Fabio Caldieraro, Associate Professor of Marketing, FGV - EBABE, München, Germany, stich@lmu.de, Martin Spann, Gerald Häubl
Rio de Janeiro, R. Jornalista Orlando Dantas, 30, Rio de Janeiro, Selling opaque products refers to a marketing practice where sellers offer goods or
22231-010, Brazil, fabio.caldieraro@fgv.br, Andre G. Trindade services for which they conceal some product attributes from buyers and reveal
The effect of competition on retail price and variety decisions: theory and them only after a non-refundable purchase. Examples include selling hotel rooms
evidence We study the impact of competition on a firm’s pricing and product on Priceline and Hotwire, lucky bags in retailing (e.g., Fukubukuro; surprise
variety decisions both theoretically and empirically. We focus on grocery stores, boxes on Amazon), or surprise menus in restaurants. Prior research is analytical
an industry where variety is particularly important to consumers. By looking at a in nature, has focused primarily on the sellers of opaque products and explained
large number of markets, we find that both prices and variety are higher when consumers’ choice of opaque products by a lower price to compensate for the
there are two competing stores than in those markets with a single store. We uncertain product characteristics. In contrast, we propose that consumers can
propose and test a model that explains these patterns based on two main forces: have a preference for the unique aspects of opaque products and not necessarily
(a) incentives to increase variety increase with competition because of a business need a discount to choose an opaque alternative when non-opaque products are
stealing effect; (b) a larger set of products allows firms to better screen also available. We propose choice difficulty, exploration, and excitement as
heterogeneous consumers leading to a strategic price-increasing effect under candidate pathways to explain consumers’ choice of opaque products, which we
stronger competition. We also find that consumer welfare is higher under test in a series of experiments. We find that consumers choose opaque products
competition, not because of prices, but because of the net increase in consumer more frequently the higher the perceived difficulty of making a choice. In
utility due to the better (wider) availability of products in the market. addition, both the desire to discover unfamiliar things as well as the anticipated
pleasure from experiencing surprise (and uncertainty resolution) can induce
2 - Measuring Product Differentiation using Market consumers to choose opaque products. Our results also indicate that opaque
Share Distributions products can be an effective means to motivate consumers to make a choice
Young Han Bae, Assistant Professor of Marketing, Penn State rather than delaying it.
University, Greater Allegheny, 4000 University Drive, Frable 217, 2 - A Unified Model of Context-dependent Preference
McKeesport, PA, 15132, United States, yzb1@psu.edu, Prithwiraj Mukherjee, Assistant Professor, Indian Institute of
Hyunwoo Lim, Thomas S. Gruca, Gary J. Russell Management Bangalore, Bannerghatta Road, Bangalore, 560076,
It is well known that the relationship between the size of market share and India, pmukherjee@iimb.ac.in, Arnaud De Bruyn, Ayse Onculer
market share rank follows a power law. Specifically, the market share power law
We present a generalized theoretical model of context-dependent preferences
implies that a log-log plot of market share size versus market share rank is linear
based on a multi-attribute utility theory formulation, where we assume that
with a negative slope. The most likely explanation for this type of relationship is
attribute-wise utilities are stable, but weights on each of these is shaped by
that brands in a product category have true quality values drawn from the
context, including choice set, past experience, word of mouth and advertising, via
extreme upper tail of a product quality distribution. Using this fact, we argue that
an anchoring mechanism. Our theoretical model explains and proposes boundary
slope of the log-log plot provides a measure of the amount of quality
conditions to several documented biases including the compromise effect,
differentiation in a product category. Moreover, by compiling a dataset of log-log
attraction effect and status quo bias. Using this parsimonious theoretical model,
plot slopes for many categories, it is possible to study how product category
we also derive a choice model and compare it to existing models using choice-
characteristics impact product differentiation. We implement this approach using
based conjoint data. We also present data from some additional studies to test the
a dataset containing the market shares of 5,733 brands in 562 consumer packaged
robustness of our approach. Our model has several implications for marketing
goods categories in the United States. We first show that power law market share
managers, in product line design, new product design and product differentiation.
distributions are a valid empirical generalization. We then show that the
parameters of the power law distributions show considerable variation across 3 - Does the Information Influence Choice of New Healthy Food
product categories, and that this variation is significantly related to category-level in Males and Females? – Role of Neophobic Trait and – Type of
measures of marketing activity. Our empirical results provide strong evidence that Unfamiliarity
strong product differentiation is associated with categories that are perceived to be
Varisha Rehman, Assistant Professor, Indian Institute of
important by consumers and that have lower levels of price promotions and
couponing. We discuss implications of our approach both for marketing managers Technology Madras, Sardar Patel Road, Adyar, Chennai, 600036,
and researchers in marketing strategy. India, varisha@iitm.ac.in, Sujatha Manohar
3 - The Dynamics of Shopper Engagement and Purchase Conversion Due to the alarming health issues around the world, there is an urgent need for
the food marketers and policy makers to inculcate healthy food choices among
at Retail Checkout
the people.The objective of the research was twofold, firstly to study the impact of
Yoonju Han, Indiana University, 1309 E. 10th Street, Hodge Hall information (health and taste) on willingness to try new healthy foods and
2100, Bloomington, IN, 47405, United States, yjhan@indiana.edu, secondly the role of type of unfamiliarity of the food, food neophobia and gender
Raymond R Burke, Shibo Li, Alex Leykin in influencing healthy food choices. A pseudo-experiment was conducted with
The checkout area or “front end” of a supermarket sells an ever expanding 385 subjects with 12 versions of the survey where the new dish and the
assortment of products, and is one of the most productive areas of the store and information presented were manipulated. Results show that the gender and type
an important driver of trip satisfaction and future store loyalty. Prior research on of unfamiliarity have a direct effect on willingness but the information does not
retail checkout has focused on how waiting time affects customer satisfaction and have. This could be because the subjects were mostly young and they are more
the implications for queue management. Little is known, however, about how influenced by social and environmental factors rather than by information. The 3-
shoppers attend to, engage with, and shop products while waiting in line. This way interaction effect of type of unfamiliarity with the information is significant
research proposes a simultaneous equations model which predicts that, as only for females which suggest that males ignore the information. Since food
shoppers move through the checkout lane, their motives, abilities and contextual neophobia is found to be significant on willingness for both males and females,
factors dynamically influence their eye fixations, product interactions, and marketers should try to reduce their reluctance. The study differentiates
purchases. We estimate the model using a unique dataset of eye-tracking and unfamiliarity and novelty in the context of food. The results would help the food
survey data collected from a field experiment at a large U.S. grocery chain. The marketers to provide the right kind of information in influencing the people to
research reveals that product engagement and “impulse purchases” are the choose a new healthy food. It could also help in deciding on the factors such as
predictable outcome of interactions between personal, contextual and marketing packaging, labelling etc. and in designing their advertisements according to the
factors. The study provides marketing researchers and store managers with type of unfamiliarity of the food.
valuable insights for product organization, merchandising, and line management
at retail checkout.
4
4 - Association Between Decision States and Media Preference in a 3 - You Can Skip this Ad in 5 Seconds: Exploring Consumers’
New Consumer Tech Purchase Ad Skipping Behavioron Internet
Paul Wang, University of Technology Sydney, Marketing Aditya Billore, Associate Professor, IIM Indore, Prabandh Shikhar,
Discipline Group, P.O. Box 123, Sydney, NSW 2007, Australia, Rau-Pithampur Road, Indore, 453556, India, adityab@iimidr.ac.in,
paul.wang@uts.edu.au, David Waller, Mark Morrison, Manoj Motiani
Harmen Oppewal Consumers encounter advertisements while browsing websites, these ads appear
Consumer decision states are discrete behavioral states that correspond with their in-page before, during, or after streaming in any web content. Consumers show
particular levels of knowledge, information search, and readiness to make a their rejection or appreciation by skipping the ad or sharing them with other
purchase. Consumer motivation for the information search would vary depending users using social networking sites. The current study attempts to understand
on their decision state. Research on decision states is especially important for both how the consumers decide to skip or watch and share the ad. We propose to use
marketing researchers and practitioners to better understand high involvement need for cognitive closure as the theoretical foundation for explaining the ad
purchase decisions. Although many studies have observed the use of the Internet skipping behavior. The proposed experiment will explore the ad skipping
as an important vehicle for purchasing, relatively little research attention has behavior in context of video advertisement on video content delivering websites
been paid to how consumers use multiple media channels such as shop displays, (e.g. YouTube).The major constructs used to explore ad skipping behavior are
advertising, and sales assistants to search for information and make their purchase Consumer perceived Advertising Creativity (Divergence and Relevance), Brand
decisions. To fill the research gap, we conducted an online survey of more than Familiarity and ad Avoidance. In this study first we try to understand how ad
1400 respondents to empirically investigate the association between decision skipping is different from ad avoidance. The later part of the study tries to explore
states and media preference in a new consumer tech purchase. In addition, the how brand familiarity and perceived ad creativity influence the decision of
study examines the effect of demographics on consumer media preference. The consumer to skip or watch the ad. Contrary to the prevalent view regarding the
study has found that consumers use of information varies across decision states, ad avoidance is that consumers are likely to process and appreciate ads from
gender, and age. The findings suggest that it is often inadequate and erroneous to known brands as compared to unknown brand. We here propose that in case of
treat consumers in different decision states as a homogeneous market. ad skipping the consumers tend not to skip ads from unknown brand because of
novelty as unfamiliar brands may reduce the need for cognitive closure (NCC).
The results of the study will help in understanding the determinants and
consequences of ad skipping behaviour. How ad skipping is different from ad
n TA09 avoidance? And what is the role of brand familiarity consumers’ decision about
ad skipping.
Room 239, Alter Hall
4 - Music Matters: Do Audio Features of Accompanying Music Affect
Understanding Ads Advertising Effectiveness?
Contributed Session Joonhuyk Yang, Doctoral Student, Northwestern University,
Evanston, IL, 60208, United States,
Chair: Aditya Billore, IIM Indore, Prabandh Shikhar, Rau-Pithampur
j-yang@kellogg.northwestern.edu, Purushottam Papatla,
Road, Indore, 453556, India, adityab@iimidr.ac.in
Lakshman Krishnamurthi, Caiyun Liu
1 - The Effect of Mobile Search Ads Across Devices:
A Geo Experiment The literature suggests that creative aspects play a significant role in how
consumers respond to advertising. Specifically, findings indicate that the creative
Michelle Andrews, Assistant Professor of Marketing, Emory
features of an ad affect its likeability which in turn influences purchase intentions
University, 1300 Clifton Rd, Atlanta, GA, 30329, United States, for the advertised product. In light of the above findings, there have been calls for
m.andrews@emory.edu, Ting Li, Francesco Balocco increased research into the creative dimensions of advertising - one of which is
Understanding the role of mobile search ads in the path to purchase is critical for accompanying music. There is however virtually no research into how the
managing multiple-device campaigns. Since sales attributions to search origins characteristics of accompanying music affect consumer response. The goal of our
across devices often hinges on individual- or device-level identification, we research is to address this gap and develop insights into the audio characteristics
overcome the problem of multiple-identifiers by designing a field experiment in of accompanying music that makes advertising more effective. Our investigation
which we geo-split consumers into treatment and control groups. Modeling the proceeds in two stages. In stage one, we use two large datasets that provide
effect of treatments between regions enables us to detect lifts in key advertising information on the popularity of music along with its audio characteristics. The
performance metrics on tablets and desktops in the same regions where mobile first, the Million Song Dataset, provides data on the number of times that over a
search ads received the experimental treatment. We then investigate the effect of million users listened to more than 380 thousand songs. The second, Free Music
mobile search ads on same and cross-device performance by varying ad bids on Archive, provides similar data for over 106 thousand songs. Both datasets also
mobile keywords based on their position in the purchase funnel. Our multi- provide data on audio characteristics like rhythm, tone and tempo of the songs.
period geo-experimental evidence comprises more than 3,000 ad campaigns Our goal for this stage is to identify audio characteristics that increase the number
served to mobile, tablet and desktop that generated more than 70 million of times that people listen to songs while controlling for factors like genre, release
impressions, more than 2 million clicks, and more than 75,000 conversions. Our date, artist popularity and duration. In stage two, we assess whether our findings
results highlight device interdependencies by demonstrating the nuanced manner carryover to the context of advertising by investigating the relationship between
through which the position of mobile keywords in the purchase funnel may advertising effectiveness and the characteristics of accompanying music.
heterogeneously drive same and cross-device conversion and shape the
information gathering process in the shopping journey.
2 - When is the Sweetest Time for TV Commercial?
Chihiro Totsuka, Graduate Student, Keio University, Felica Hiyoshi
#202 3-5-12 Kohoku Yokohama, Kanagawa, 223-0061, Japan,
c.t.1222@z5.keio.jp
TV commercials still have greatest impact on consumers in Japan and a lot of
companies invest large portion of their advertising budget in TV commercial.
However, it is difficult to know the effect of TV commercials and each company
blindly uses TV commercials in their own ways. In this research, I tried to find out
the most effective time zone for TV commercials and to know why the effect
become highest at a certain time zone. The reason why I focus on time zone is
that it is comparatively easy for companies to control time zone when they place
TV commercials. The goal of this research is to propose the way how each
company can make the most of their TV commercials. I used a single source data
collected by Nomura research institute, which involves data of how much people
come in daily contact with TV and websites, and data concerning awareness,
preference and purchase experience towards products and I compare the scores of
consumers’ intention and purchase towards products before they come in contact
with TV commercials and after that. Moreover, using data about consumers’
demographics and usages of web sites and SNS, I analyzed the reason why some
time zones have greater effect on consumers deeply.
5
n TA10
benefiting appeals will consider a difficult to process campaign to be less favorable
than an easy to process campaign. We tested a moderated mediation using a sense
of guilt to explain the psychological mechanism. In Study 1, 311 US participants
Room 605, Alter Hall from Amazon Mechanical Turk were randomly assigned to one of four conditions:
Consumer Judgement & Choice 2 (appeal: social vs. self) × 2 (processing fluency: easy vs. difficult). Participants
were presented with an appeal scenario (White & Peloza 2009) and a prosocial
Contributed Session campaign to process. The level of lexical processing fluency was manipulated as
Chair: Vlada Pleshcheva, Humboldt University Berlin, being easy or difficult to understand (Zhang & Mattila, 2015). As predicted,
Wirtschaftswissenschaftliche Fakultÿt, Institut für Marketing, Berlin, people rated that they are less likely to volunteer for disfluent campaign with self-
benefit appeal (F(1, 305) = 4.30, p = .039) through marginally increasing feeling
10099, Germany, vlada.pleshcheva@wiwi.hu-berlin.de of guilt. In Study 2, 197 US participants were randomly assigned to one of four
1 - Cascade Effect in Service Quality Evaluation conditions: 2 (appeal) × 2 (processing fluency), and we used the same procedures
Sheila Roy, Associate Professor, S.P. Jain Institute of Management in Study 1 by changing the sharpness of text and pictures in the campaign
and Research, I 704 Raheja Vistas Raheja Vihar, Chandivalli, (Labroo & Kim, 2009). Further, as predicted, we found that guilt mediates the
Mumbai, 400072, India, sheila.roy@spjimr.org, Indrajit Mukherjee interaction effect on attitudes (95% CI = [.011, .371]).
We attempt to extend the theory on evaluative judgements of partitioned 4 - Do Consumers Value Identical Improvements in Fuel
(sequential) experiences (Ariely and Zauberman, 2003) and the theory on Consumption and Co2 Emissions of Cars Equally?
preferences for sequences of outcomes (Lowenstein and Prelec,1994), to service Vlada Pleshcheva, Research Assistant, Humboldt University Berlin,
quality evaluations across multiple stages in a service process. Prior research in Wirtschaftswissenschaftliche Fakultät, Institut für Marketing,
partitioning of sequential experiences suggest that the overall evaluation of the Berlin, 10099, Germany, vlada.pleshcheva@hu-berlin.de
experience is impacted by summary evaluations of each partition rather than
gestalt characteristics such as peak experiences, trend or end. In choice literature, The present study investigates how the framing of information on the
when choices are framed as sequences of outcomes, people tend to prefer environmental impact of vehicles affects consumers’ preferences and willingness-
improving sequences and delayed gratification. The above research seems to to-pay (WTP) for identical improvements in a car quality. In online choice
assume that experience of prior stages in a sequence would not impact either the experiments, the effects from two metrics (fuel consumption vs. CO2 emissions)
evaluation or choice of future stages. However, in a service setting which is and three scales of one metric (CO2 in 0.100 kg/km vs. 100 g/km vs. 10,000
usually designed as a series of stages partitioned by logical breaks, the experience g/100 km) are examined. First, from a technical view, fuel consumption (FC) and
of prior stages may impact evaluation or choice of subsequent stages and the CO2 emissions are linearly connected by a constant factor and are thus
overall evaluation of the sequence may be mediated by evaluation of isomorphic in describing the environmental friendliness of a car. Second, rescaling
intermediate stages. This phenomena is referred to as a cascade effect in identical information should not change consumer decisions. However, as this
operations management literature (Shi and Zhou, 2009; Sulek et al., 2006). The study demonstrates, consumers’ perception of and WTP for identical
objective of the research is to study the cascade effect of prior stage evaluation on improvements in the car quality vary significantly depending on the framing of
subsequent stage customer experience and on overall evaluation of the information. The study’s contribution lies in comparing effects from two measures
experience. Through an experimental design of a multistage education loan of the same information, not within one measure (FC or CO2) as in previous
application process we study the mediating cascade effect of intermediate stages research, and in contrasting the investigated metric and scale effects among
on final service quality evaluation. The findings of the study have managerial consumers who prefer either diesel or gasoline vehicles. The estimation accounts
implications for the design of customer experiences. for heterogeneity in tastes, environmental attitudes, knowledge, and importance
of climate change issues for the respondents. The insights of this study serve to
2 - When are Comparison Sites Used in Consumer Search provide guidance for both policy makers and car manufacturers on how to
Peng Yam Koh, PhD Candidate, Singapore Management present information on car offers.
University, 50 Stamford Road, Singapore, 178899, Singapore,
pengyam.koh.2016@pbs.smu.edu.sg, Ernst Osinga,
Peter Sander van Eck
n TA11
Comparison sites allow consumers to compare product and service offerings from
different providers on price and non-price characteristics and are ubiquitous in Room 606, Alter Hall
consumer search. While search theory can explain why consumers search on
comparison sites, it cannot explain when consumers search on these sites.
Digital Marketing I
Moreover, this theory provides little guidance for firms who wish to list on Contributed Session
comparison sites. To fill this gap, we develop theory relating key constructs from
search theory to the timing of comparison site visits in the consumer’s search (i.e., Chair: Gabriela Alves Werb, Goethe-Universität –
earlier or later in the search). We test our theory using: (i) household panel data Wirtschaftswissenschaften, Theodor-W.-Adorno-Platz 4, Frankfurt am
capturing online browsing, purchase behavior, and pre-search survey on the Main, 60596, Germany, gabriela.werb@wiwi.uni-frankfurt.de
Dutch health insurance market, and (ii) a Bayesian probit model with 1 - Quantifying the Impact of Interactive Marketing Feature:
endogenous search equation to address possible self-selection by consumers. We Evidence from a “Daily Check-in” Experiment
find that the moment of comparison site usage depends on the consumer’s: (i)
Tianfu Wang, Purdue University, 3384 Peppermill Dr, Apt 2A,
size of the initial consideration set, (ii) dissatisfaction with their current product,
(iii) expectation of finding a better deal, and (iv) switching intention. Overall, we West Lafayette, IN, 47906, United States, GustavTF@gmail.com,
deepen search theory by explaining when and for what reasons consumers Xing Fang
consult comparison sites. Our findings have important managerial implications for Online retailers traditionally attract customer traffic via advertising, price
managers of comparison sites and managers of providers listing on comparison discount, and other promotional events. In recent years, new interactive
sites. marketing features, such as “like” (e.g., Facebook), “check-in” (e.g., Yelp), and
3 - Illusion of Processing Fluency on Pro Social Campaigns “follow” (e.g., eBay) have emerged. Despite the tremendous marketing resources
devoted to incentivize such behaviors, little is known about their effectiveness,
Unjustifiable Efforts Produce Guilty Feelings and if so, what is the mechanism behind them? We utilize a quasi-experiment to
Yaeeun Kim, Temple University, Philadelphia, PA, United States, answer this question. We collaborate with an online retailer to design and
enakim@temple.edu, Yaeri Kim, Vinod Venkatraman, Kiwan Park implement a week-long daily check-in event. The customers who visit and
Previous studies have revealed contradictory effects of processing fluency on “check-in” with the retailer receive loyalty points as a reward each day. The
attitudes. When processing advertisements, easy to process stimuli are more customers who participate in the daily check-in event serve as the treatment
positively evaluated as a feelings-as-information (Reber et al., 2004), while group while the customers who do not participate in the event serve as the
difficult to process stimuli are more favorable as an effortful investment (Deval et control group. We compare both the short-term and long-term changes in
al., 2012; Labroo & Kim, 2009). It is still not clear if the evaluation of disfluent purchase behavior across the two groups of customers. In the follow-up study, we
advertisements is motivated with a desirable appeal (e.g., social-benefiting appeal) try to resolve the customer self-selection issue via a randomized field experiment.
or an undesirable appeal (e.g., self-benefitting appeal). In the current research, we These results provide the first evidence of the cost-effectiveness of “daily check-
predict that such perceived disgraceful actions increase unpleasant emotional in” and explore the mechanism of interactive of marketing features.
states such as guilt, which would affect their attitudes (Kouchaki et al., 2014;
Peloza et al., 2013). We explore this effect by applying disfluent stimuli to a
prosocial behavior campaign. Thus, we hypothesize that people primed with self-
6
2 - Morphing for Consumer Dynamics 2 - When Does More Information Mean Less for Consumers
Alina Ferecatu, Assistant Professor of Marketing, Rotterdam Xiaoyan Xu, PhD Candidate, National University of Singapore,
School of Management, Erasmus University, Burgemeester 21 Lower Kent Ridge Road, Singapore, 119077, Singapore,
Oudlaan 50, Rotterdam, 3062 PA, Netherlands, ferecatu@rsm.nl, A0133851@u.nus.edu, Yuetao Gao, Wei-Shi Lim
Gui Liberali In some service industries (e.g., credit cards, mobile phone plans, insurance),
Website morphing automatically changes the “look and feel” of websites to match many consumers do not carry the service plan that best fits their needs. Recently,
the cognitive styles of its visitors. Current developments in morphing theory service-switching infomediaries have entered the market and consumers can
assume that consumers’ cognitive styles, and therefore their information needs locate better service plans by using websites’ free service if the infomediaries can
and preferences, are constant over time. However, changes in their information reach them. An infomediary is an Internet-based information provider that
needs can impact the effectiveness of a morph over time. We propose an gathers information about consumers’ preferences based on their existing
algorithm that allows for learning under dynamic information preferences. We consumption behaviors and recommends service providers to them; however, the
account for dynamic decision-making stages, such as when website visitors move choices are restricted to only the service providers enrolled with the infomediary.
from the information-gathering stage to the consideration stage, and into the We examine how provision of information by an infomediary affects service
purchase stage. We characterize the learning of the match between morphs and providers’ profits and consumer surplus. We find that when a large proportion of
decision-making stages as a multi-armed bandit problem, which we solve with a the uninformed consumers are not matched with their ideal service, the
dynamic allocation index. We develop a novel dynamic programming algorithm infomediary profits by adopting a non-exclusive contract to enroll all service
to explicitly model the within-visit trade-off between nudging a consumer providers. In addition, enrolling with the infomediary is a dominant strategy for
through the purchase stages, and risking having her terminate the website visit. the service providers. However, they may consequently realize less profit.
We design morphs based on categorization theory, which provides us with Furthermore, we show that although the infomediary intends to provide
substantive support for the choice of morph content and language tailored for information such that consumers can make a better service choice, consumers are
early and late stages of the purchase funnel. We report a longitudinal field worse off if the reach of the infomediary to uninformed consumers is high.
experiment to establish a proof-of-concept for our method. Consumers are better off if the reach is low.
3 - Visibility-at-risk: An Approach to Estimate a Firm’s Risk of Losing 3 - Analyzing Lost Customer Behavior in the Business Analytics Era
Visibility in Organic Search Ke Li, Assistant Professor, New Jersey City University, 110 First St,
Gabriela Alves Werb, Goethe-University Frankfurt, Theodor W. Apt 20J, Jerse City, NJ, 07302, United States, kli@njcu.edu,
Adorno-Platz 4, RuW-Building, Room 1.236, Frankfurt am Main, Anthony C. DiBenedetto, Eric M. Eisenstein
60323, Germany, gabriela.werb@wiwi.uni-frankfurt.de, Winning back lost customers has gained more and more importance in businesses
Christian Doppler, Bernd Skiera since winning back lost customers can recapture lost revenue and at the same
Organic search clicks already constitute the most important source of online time costs much less than acquiring new customers. The extant papers on
traffic for firms in several industries, such that a loss of visibility in organic search winback mainly focused on developing strategies to regain customers that were
may severely affect a firm’s ability to generate profits. We propose an approach to lost during the retention stage only and examine factors such as customer
estimate a firm’s risk of losing visibility in organic search results, with the aim to perceptions of fairness, customers’ first-lifetime satisfaction through survey, price
provide insights into its size, heterogeneity and economic consequences. Half of discounts, service-based win-back offers, and defection reasons on the likelihood
the firms in our sample of more than 1,000 firms face a 5% probability of losing of reacquiring these lost customers. In this paper, we explore how customers’
more than 55% of their visibility within one year. This result suggests that many experiences, customer engagement and company’s touch point in customers’
firms that rely on organic search clicks to drive traffic to their domains have a journey during the conversion period and retention period respectively influence
considerable risk associated with their future profits. Our estimates also reveal customer reacquisition probability within the competitive environment. Different
that the risk of losing visibility is highly heterogeneous across industries. A machine learning methods that could be used for winback segmentation are also
backtesting analysis with out-of-sample data suggests that our developed risk discussed. Our study helps firms to understand how to apply different winback
measure, Visibility-at-Risk, is a valid measure for the risk of losing visibility in strategies to different segments of their lost customers in the business analytics
organic search results. Finally, our results outline that changes to a firm’s visibility era.
index have significant and prolonged effects on profits. These results have
important implications for managers and investors.
n TA13
n TA12 Room 746, Alter Hall
Multi – Channel Strategies I
Contributed Session
Marketing Strategy - Markets & Analyses
Chair: Penelope Schoutteet,Vrije Universiteit Brussel, Pleinlaan 2,
Contributed Session Brussels, 1050, Belgium, pschoutt@vub.ac.be
Chair: Ke Li, New Jersey City University, 110 First St, Apt 20J, 1 - Dominant Retailer, Lower Product Quality and
Jersey City, NJ, 07302, United States, kli@njcu.edu Uninformed Customers
1 - Optimal Couponing with Required Purchase Quantity Axel G. Stock, University of Central Florida, Dept of Marketing
Aharon Hibshoosh, Professor, San Jose State University and CBA, P.O. Box 161400, Orlando, FL, 32816-1400, United States,
Lincoln University, 401 15th Street, Apt 10, Oakland, CA, 94709, Axel.Stock@ucf.edu, Somnath Banerjee
United States, rhibshoosh@gmail.com, Uri Ben Zion, Uriel Spiegel A number of consumer and business reports suggest that slightly lower quality (or
The model describes a common deal routinely offered by Kroger and others. The feature) variants of products are being sold through dominant and mass retailers,
model is an extension of related coupon rationing models by Ben Zion, Hibshoosh while higher quality variants continue to be sold through specialty and weaker
and Spiegel (e.g. BHS 2000). A profit maximizing firm is offering a coupon with a retailers and, customers are uninformed about such differences. We study two
stipulation that every consumer using the coupon must purchase C items of intriguing questions based on this phenomenon viz. (1.) why are lower quality-
product x. The firm simultaneously optimizes its decision variables: the coupon lower priced variants sold primarily through dominant retailers and not the
discount level D and its required coupon purchase quantity C, under nominal weaker retailers? (2.) why do the weaker retailers or manufacturers not inform
rigidity. The profit’s C and D elasticities are denoted as eC and eD, and the optimal customers about these quality differences? Using a game theoretic model, we find
values as C* and D*, correspondingly. We adhere to our couponing framework that (1.) in a bilateral monopoly of manufacturer and retailer an increase in
where in contrast with the restricted parametric modeling in marketing we bargaining power of the retailer leads to a lower product quality in the channel, if
assume a general market response function of the decision variables. quality is non-contractible. Consumer surplus rises, while social welfare follows
Furthermore, we model the consumer choice in a commodity space rather than in an inverted-u shaped curve with increase in retailer dominance and the
some spatial framework with separable consumer utilities. As common in associated decrease in product quality. (2.) The weaker retailer does not have an
couponing modeling we assume marketing to two market segments: a top full incentive to communicate its higher quality even if the advertising is costless, if
price loyal market segment and a lower deal prone one, assuming downward the quality differences are not too high. The motivation for this result is traced to
leakage. We identify parsimonious functions of elasticities which, in general, the threat of increased competition in the event of such advertising.
determine the optimal values. For example, we prove that: a) at optimum eD >
eC ; b) D* depends only on the gap eD-eC. The optimal coupon shares of
segments are simple fractions involving only linear functions of eC and eD. Based
on the general results we also develop as private cases parametric results and
generate explicit solutions for C*and D*, a rarity in the couponing literature.
7
2 - Effects of App Adoption Besides a Mobile Website on

Customer Purchase n TA14
Huan Liu, PhD Candidate, University of Groningen, Nettelbosje 2, Room 607, Alter Hall
Groningen, 9747AE, Netherlands, huan.liu@rug.nl
Machine Learning – Dynamic Pricing & Predictions
The usage of mobile devices during purchase journey is constantly growing. The
notable mobile channels are mobile websites (hereafter: m-webs) and applications Contributed Session
(apps), which have very similar attributes but also differences. Online retailers Chair: Sebastian Gabel, Humboldt University Berlin, Germany; sebast-
can easily expand their business to m-webs instead of apps due to lower
ian.gabel@hu-berlin.de, Artem Timoshenko
investment in m-webs. For example, Chinese retailers can freely offer a WeChat
shop, which is a m-web connecting to WeChat Official Account. Is it necessary for 1 - Who Does Artificial Intelligence Benefit? An Empirical Analysis of
such retailers to add an app as another purchase channel? We addresses this Returns to Smart Pricing Algorithm on Airbnb
question by exploring whether app adoption can stimulate more purchases, and
how the purchase change after adopting the app differs across customers with Param Vir Singh, Carnegie Mellon University,
different characteristics (i.e., risk preference, loyalty). We collect data from China 309 Marberry Drive, Pittsburgh, PA, 15215-1437, United States,
and find that customers purchasing through the m-web before, not only are more psidhu@andrew.cmu.edu, Shunyuan Zhang, Nitin Mehta,
likely to purchase, but also buy more frequently and buy more in each order after Kannan Srinivasan
adopting the newly added app than non-adopters. We also find that financial risk-
Who does AI benefit? We study this question in the context of a smart pricing
averse customers have a higher order size than risk-seeking customers after
algorithm launched by Airbnb to help its hosts price their properties better. The
adopting the app; while there is no significant differences between performance
tool was launched in Nov 2015 and had been adopted by approximately 30%
risk-averse and risk-seeking customers. Customers who are loyalty to the m-web
hosts. Using a difference in difference analysis along with propensity score
purchase less in each order than non-loyalty customers after adopting the app.
matching, we first demonstrate that the hosts who adopted the smart pricing
This paper contributes to the studies on multichannel and mobile marketing by
algorithm, on average, earned 5% more demand in comparison to hosts who
considering adding a similar channel to an existing channel (compared to adding
continue to price their properties on their own. These results are robust to a
different channels in most channel addition papers, e.g., adding online websites to
number of robustness checks. Second, we show that the adoption of the
physical stores or adding apps to online websites), and by considering real
algorithm systematically differs significantly across subgroups. More sophisticated
monetary transactions in mobile channels (compared to Xu et al. 2014).
hosts are more likely to adopt the smart pricing algorithm. Whereas, naïve hosts
3 - Vertical Integration of Wholesale Functions Among who would benefit the most from the adoption of the smart pricing algorithm are
Japanese Manufactures less likely to adopt the algorithm. These results reveal that the systematic
Tomokazu Kubo, Chuo University, 742-1 Higashinakano, Hachioji- differences in adoption of AI are widening the divide between the sophisticated
and naïve individuals instead of bridging it.
shi, Tokyo, 192-0393, Japan, tomokazu@tamacc.chuo-u.ac.jp
Japanese leading manufactures are likely to vertically integrate wholesale 2 - An Intelligent Video Ad Display System
functions so that they control distributors’ behavior in marketing channel. Based Li Xiao, Associate Professor, Fudan University, Room 513, 670
on transaction cost analysis (TCA) and capability approach, this research proposes Guoshun Road, Yangpu District, Shanghai, 200433, China,
a conceptual framework how Japanese manufactures integrate wholesale lixiao@fudan.edu.cn, Min Ding
functions or not. Specifically, it is suggested that human asset specificity and
It is common practice in marketing nowadays to use LED screens to display ads
teachability positively related with vertical integration, while outside wholesaler
on many occasions, e.g. the digital POS systems in retail stores, digital billboards
know-how negatively related with vertical integration. Because endogeneity
at bus stops, and video screens installed on the seatbacks in taxis and airplanes,
would arise between vertical integration and human asset specific, customization
etc. This video ad display system usually shows a set of ads to the viewers, one
of distribution services are used as an instrumental variable. Empirical analysis
after another in a predetermined sequence, and then loop back to start from the
shows evidence that the decision on integration of wholesale functions are
first ad. The sequence could be random in some cases. Compared with the
influenced by TCA and capability factors.
traditional print ad display system, such system has an obvious advantage of
4 - Combining Consumers’ Preferences and Attitudes in an playing multiple ads but using only one space. However, its performance is
Omnichannel Retail World: A Sequential Hybrid Channel and questionable since it ignores the substantial heterogeneity among people’s
Modal Choice Model preferences toward different ads. In this paper, we propose an intelligent video ad
display system, which utilizes face-eye stream data, to overcome this problem.
Penelope Schoutteet, Vrije Universiteit Brussel, Pleinlaan 2, The face-eye stream data tracks the facial expression and eye gaze on each frame
Brussels, 1050, Belgium, pschoutt@vub.be, Lieselot Vanhaverbeke of a video that records viewer’s facial responses when watching an ad. For each
Over the past years, omnichannel retail has been impacting the retail landscape frame, the recognized facial expression and detected eye gaze are matched to the
and providing consumers a multitude of channels to buy their products. This corresponding frame on the video ad shown at the exactly the same time. In this
study aims to understand how omnichannel retail influences consumer channel way, the system knows what facial expression is in response to what specific
and modal choice behaviour. This research entails two parts. Firstly, we adapt our element in the ad. By doing this in real time, the system can estimate a viewer’s
conjoint measurement analysis towards a discrete choice model. Through the preferences toward ads, then search the ad database, and select and play a new ad
conjoint measurement survey, we elicited channel preferences of 825 Brussels’ next that is more likely to attract this viewer’s attention and result in positive
respondents for the following product categories: electronics, fashion and food attitudinal and behavioral consequences. We tested the proposed system in an
products. The analysis shows that for the three product categories, consumers empirical study, and demonstrated that our proposed system is able to make
prefer a city or local high-street store, above an online store or a store in a reasonably accurate inferences of viewers’ preferences toward video ads, which
shopping mall, to buy their products. Through a Hierarchical Bayes estimation of performs better than the state-of-art video ad display system.
the attribute importances, we find that for online shopping, respondents consider
3 - Cross-category Product Choice: A Scalable Deep-learning Model
the delivery cost as the most important attribute. For a store in a shopping mall,
travel time is the most important attribute. For food products bought in a high- Sebastian Gabel, Humboldt University Berlin, Oderberger Str. 44,
street, travel time is the most important attribute while for fashion and electronics Berlin, 10435, Germany, sebastian.gabel@hu-berlin.de, Artem
products, the store’s price/quality level is the most important attribute. Secondly, Timoshenko
we expand our discrete choice model by including the technology acceptance We predict product choice across the entire assortment of a large retailer. This
survey results about attitudes, perceptions, knowledge, and social influences extends prior research that models choices of individual customers within a single
regarding omnichannel technology. The resulting sequential hybrid channel and or across a small number of selected product categories. We propose a scalable
modal choice model will next be used in simulations to estimate the impact of cross-category product choice model based on a deep neural network which
changes in channel and transport mode choice on the mobility in Brussels and the leverages rich market basket data and purchase histories of individual customers.
sustainability of omnichannel retail. The model first estimates product representations using market basket data. It
then combines purchase histories, marketing mix variables, demographics, and
additional meta data (e.g., time, store) to predict product choice. Accurately
predicting what customers will likely buy on their next shopping trip is the first
step towards efficient target marketing. We evaluate the proposed product choice
model in the context of a large retailer that operates over 40,000 products across
more than 300 categories and handles up to 1,000,000 transactions per day.
Individual customers are identified and targeted through the retailer’s loyalty
card. We illustrate the value of improved product choice prediction in the context
of real-time offer engines for the personalized coupons. We evaluate the proposed
approach using purchase data, and compare the model to data-driven heuristics
and state-of-the-art benchmark methods including Latent Dirichlet Allocation
(LDA). Our model achieves higher prediction accuracy and scalability, both in the
number of products and the volume of historic purchase data.
8
INFORMS MARKETING SCIENCE – 2018 TB01
n TA15 Thursday, 10:30AM - 12:00PM

Big Data – Promotions
Contributed Session n TB01
Chair: Kaushik Jayaram, University of Georgia, Athens, GA, Room 32, Alter Hall
kaushik.jayaram@uga.edu Healthcare Marketing: I
1 - Content Engineering of Visuals: Drivers of Consumer General Session
Engagement on Instagram Chair: Sriram Venkataraman, UNC-Chapel Hill, Chapel Hill, NC, 27599,
Eunhee (Emily) Ko, Emory University, 201 Dowman Drive, United States, venkats@kenan-flagler.unc.edu
Atlanta, GA, 30322, United States, eun.hee.ko@emory.edu, 1 - The Effects of Early and Late Stage Collaboration on
Douglas Bowman Pharmaceutical Product Development: Evidence from FDA Trials
As the marketing power of social media grows, companies have increasingly been Ahmed Khwaja, University of Cambridge, Cambridge Judge
employing social networking services (SNS’s) as tools to empower their tangible Business School, Trumpington Street, Cambridge, CB2 1AG,
products or intangible assets. Recently, image-based posts have become dominant United Kingdom, a.khwaja@jbs.cam.ac.uk, Rebeca Mendez-Duron
content in social media, and users create considerable “buzz” around them.
Marketers are also tuned to this emerging form of social media post, considering The decision of when to initiate a collaboration between firms in developing new
the promotional roles of visual content in social media. The types of visual products can be crucial, i.e., early or late stage collaboration can have potentially
content created by social media users are boundless, and posting about a brand is very different effects. There is a vast literature on understanding the various
one of them; users post, share, and express their feelings and opinions about determinants of collaboration. However, the effects of its timing remain much less
brands in SNS’s. This study investigates the visual aspects of image posts, which understood especially for the pharmaceutical industry, where such timing is a
are thus far poorly understood in marketing. In particular, the research examines critical decision. Using a unique panel dataset constructed from multiple sources
the role of the social media platform as a means of consumers’ self-expression, that documents the outcomes of all FDA trials from 2000 to 2011 we examine the
and it seeks to understand the impact of different types of self-expression in effects of early and late collaboration. In particular, we study: (1) Whether early
image-based posts on user engagement using brand-related social media posts. To (Phase II) or late (Phase III) stage collaboration is more effective? (2) If there are
find the various self-expression typologies in the brand-related visual content, we any prolonged spillover effects of these two types of collaboration? (3) What are
incorporate two semantic features from image posts—sentiments and objects— the features of partnerships that make early or late collaborations more
which have barely been investigated in a visual context in marketing. We use 1) a successful? We find that early stage collaboration is more beneficial but also
visual sentiment technique based on a convolutional neural network (CNN) comes with a cost of prolonging the duration of early stage trials. This also has
pretrained from previous works and 2) an image recognition method based on a longer term spillovers as accumulated early stage collaboration experience
CNN with transfer learning. Based on the two semantic features, we first segment improves the chances of success in future trials. In successful early stage
the typologies of the brand-related images and then evaluate the effects of collaborations firms seek partners with wider scope and experience with drug
different typologies on customer engagement. Implications for research and classes and therapeutic conditions. However, in successful late stage collaborations
practice are also discussed. firms seek partners that are more focused with narrow experience in the relevant
drug class. Overall, early stage in contrast with late stage collaboration experience
2 - The Economic Value of Conversational Commerce: is more critical to a firm’s short run costs and long run success. Our findings also
A Case Study of Chatbots indicate that collaboration involves a trade-off between upfront short run costs
Kaushik Jayaram, Doctoral Candidate, University of Georgia, and long term pay-offs. Thus, from public policy and managerial strategy
B325, Amos Hall, 610 South Lumpkin Street, Athens, GA, 30605, perspectives collaboration should be viewed as an `ìnvestment’’ decision.
United States, kaushik.jayaram@uga.edu, Sundar G. Bharadwaj Provided a firm `ìnvests’’ strategically in its collaboration decisions these can
create a source of competitive advantage increasing and sustaining its chances of
Conversational commerce pertains to the use of chat, messaging and natural long term success.
language interfaces to interact between customers and firms. These interactions
are carried out using chatbots that are built on Artificial Intelligence (AI) driven 2 - Obesity, Health Conditions and Food Purchases
technologies such as Natural Language Processing (NLP) and Machine Learning. Nitin Mehta, University of Toronto, Toronto, ON, Canada,
Chatbots allow the users to interact through two-way conversations real-time on Nmehta@Rotman.Utoronto.Ca, Matthew Osborne, E. Wang,
a 24/7 time frame. Chatbots are used by firms for multiple purposes such as T. Jaenicke
providing customer service, financial advice, health tips, etc. A popular marketing
application of chatbots is providing personalized product recommendations based In this paper, we investigate the impact of taxes on ‘unhealthy’ categories on
on users’ requirements and a strong contextual understanding. Other marketing consumers’ obesity levels. We were recently granted access to a novel survey
applications include sending relevant real-time promotions, ordering products dataset on health conditions that is maintained by the US Department of
using chat, etc. While chatbots improve the speed and access to customer Agriculture. The survey, which is conducted annually, covers issues such as health
interactions, their impact in terms of customer service and firm value are and obesity of all members of each household in the sample for a period of five
unknown. Specifically, could the use of chatbots lower the cost of customer years, and was administered to panelists in the Nielsen Homescan consumer
interactions and/or improve the returns from customer interactions thus panel. In the Homescan panel data, we observe the food purchases of each
impacting firm cash flows? The authors examine this question by exploring the household in all categories in the store for each shopping trip over the same time
short term and long-term stock market impacts of chatbots launch period as the survey data. Since this survey data is linked to the Homescan panel,
announcements by US firms across multiple industries. The research also we can observe food purchases of panelists and link food purchases to measures
compares the payoff from investing in chatbots for marketing versus other of panelist obesity levels. We link the market mix variables of categories
purposes. We find that the mean abnormal returns of using chatbots for (specifically prices) from the Homescan data set to the annual obesity levels of
marketing is 1.48% that translates to a wealth effect of $247 million in market consumers observed in the survey data as follows. Using the Homescan data, we
value. There is no significant returns when firms use chatbots for non-marketing develop a multi-category model of consumers’ purchases across all food products
applications. We explain the variance in these returns as a function of chatbot, in the store, which links the marketing mix of all categories in the store to their
firm and industry characteristics. purchases. And using the survey data, we model the consumer’s annual BMI
index as a function of their annual purchases in each of the food categories.
Putting the two links together links the market mix variables of categories to the
obesity levels of consumers. This framework allows us to address the following
n TA16 two substantive issues. First, is to examine the impact of added taxes on
‘unhealthy’ food products on consumers’ obesity levels. And second is to identify
Room 231, Alter Hall the product categories that are the best ones to tax in terms of decreasing obesity
2018 ISMS/MSI Gary Lilien Rehearsals levels. To deal with the first issue, we run a counterfactual in which we induce a
permanent price increase in the focal category (since an increase in taxes in the
Rehearsal Session category implies an increase in its price), then examine it impact on the demand
of all food products in the store (depending on the extent to which they
complements/substitutes of the focal category), and then examine the impact of
the purchases across all categories on obesity levels of consumers. To deal with
the second issue, we run the counterfactual across all categories and identify the
category in which the tax increase yields the highest decrease in obesity levels.
We are currently estimating the model. Once completed, I believe it will.
9
TB02 INFORMS MARKETING SCIENCE – 2018
3 - Technological Outsourcing May Not Fill the Gap: Investigating 2 - Shipping Fees and Product Assortment in Online Retail
Reactive Licensing in the Pharmaceutical Industry Donald Ngwe, Harvard Business School, Boston, MA, 02163,
Manuel Ignacio Hermosilla, Johns Hopkins University, United States, dngwe@hbs.edu, Chaoqun Chen
100 International Dr, Baltimore, MD, 21201, United States, We seek to measure how consumers respond to value-contingent free shipping
mh@jhu.edu incentives and how online retailers can use this information to design optimal
Technological innovators routinely strengthen their new product pipelines by shipping policies that work together with pricing and product assortment. Using
outsourcing developing products from other companies. We argue that this historical sales data from an online fashion retailer, we document model-free
strategy may backfire if carried out reactively. That is, if the firm uses outsourcing evidence of purchase patterns around minimum order requirements for free
to fill the gap left by the failure of other products in its pipeline. In these cases, shipping. Orders tend to bunch just over the free shipping minimum order value,
urgency may make the firm more vulnerable to the asymmetric information with consumers “topping up” purchase baskets by choosing higher priced or
problems that plague markets for developing technologies. Supporting evidence additional items. We build a demand model that characterizes these purchase
from the pharmaceutical industry is presented. Outsourcing is operationalized by patterns in an environment with multiple product categories. This model enables
drug candidate licensing contracts in this context. Exploiting quasi-experimental us to measure sensitivity to product prices and shipping fees separately. We use
variation in pipeline gaps, we show that: (i) large pharmaceutical firms engage in this model to simulate demand under counterfactual scenarios, including
reactive licensing, (ii) relative to candidates licensed proactively, those licensed alternative shipping fee schedules and product assortment decisions. We find that
reactively are more likely to fail post-licensing development, and (iii) financial firms can substantially improve performance by jointly determining product
markets do not “distinguish” reactive from proactive licensing on a systematic attributes and shipping policies.
basis. 3 - Scarcity Rents in Car Retailing: Evidence from Inventory
4 - Service Performance and Customer Reallocation: Customer Fluctuations at Dealerships
Urgency, Rationing, and Cherry Picking Ayelet Israeli, Harvard Business School, Morgan Hall 177, Soldiers
Tae Jung Yoon, University College London, 604 Duckman Tower, Field Road, Boston, MA, 02163, United States, aisraeli@hbs.edu,
3 Lincoln Plaza, London, E14 9BL, United Kingdom, Florian Zettelmeyer, Fiona Scott Morton, Jorge Silva-Risso
t.yoon@ucl.ac.uk Price variation for identical cars at the same dealership is commonly assumed to
In this paper, I investigate three underlying mechanisms about why quality arise because dealers with market power are able to price discriminate among
information disclosure may not be beneficial to customers in the service industry their customers. In this paper we show that while price discrimination may be
where sellers are often capacity-constrained. First, customers who are urgent and one element of price variation, price variation also arises from inventory
cannot wait their turns may be matched to low quality sellers. Second, if prices fluctuations. Inventory fluctuations create scarcity rents for cars that are in short
are regulated in the market, proactive seller rationing can reallocate unprofitable supply. The price variation due to inventory fluctuations thus functions to
customers to low quality sellers because high quality sellers often face higher efficiently allocate particular cars that are in restricted supply to those customers
demand after information disclosure and thus can strategically seek out profitable who value them most highly. Using transaction level data on new car sales across
consumers. Third, if disclosed quality measures depend on customer the US between 1998 and 2014, we find that a dealership moving from a
characteristics, sellers can cherry-pick customers who do not ruin their quality situation of inventory shortage to an average inventory level lowers transaction
measures. Using an exogenous policy shock to disclose healthcare providers’ prices by about 0.5% ceteris paribus. Shorter resupply times also decrease
performance, I estimate structural models and disentangle these three transaction prices for cars in high demand. For traditional dealerships, inventory
mechanisms. Then I find that quality information disclosure can decrease explains 50% of the combined inventory and demographic components of the
customer welfare mainly because less urgent customers choose high quality predicted price. For so-called “no-haggle’’ dealerships, the percentage explained
sellers ahead of more urgent customers. by inventory increases to 62%.
4 - Using Observational Data to Increase Accuracy in
Marketing Experiments
n TB02 Ron Berman, The Wharton School, University of Pennsylvania,
700 Jon M. Huntsman Hall, Philadelphia, PA, 19104-6340,
Room 33, Alter Hall United States, ronber@wharton.upenn.edu, Elea McDonnell Feit
Digital Economy II: Customer Interactions and Recent research analyzing advertising experiments has shown that simple
Product Delivery randomized controlled trials designed to measure the average treatment effect
across all ad viewers are often underpowered and that unreasonably large
General Session samples are required to prove that a campaign is profitable. In this paper we show
Chair: Ron Berman, The Wharton School, Philadelphia, PA, that if the advertiser can rank viewers based on their responsiveness to
advertising, then the power to detect advertising response can be substantially
19104-6340, United States, ronber@wharton.upenn.edu
improved by stratifying viewers into high- and low-responsiveness groups and
1 - Balancing Service Speed and Agent Utilization for an Online using a post-stratified estimator of the advertising effect. Analytically, we show
Insurance Platform that past observational data about consumers can be used to rank consumers by
Andres I. Musalem, University of Chile, Beauchef 851, Santiago, their treatment effects, even if the past exposures were not-random. Thus firms
8370456, Chile, amusalem7@gmail.com, Marcelo Olivares, with prior panel data on customer response to advertising (e.g. CRM data) can
Daniel Yung use this observational data to increase the power of their holdout experiments.
We apply the stratification approach to re-analyze a direct mail experiment
In this research, we study an online platform that sells car insurance policies conducted at large specialty retailer. We estimate prior responsiveness for each
offered by different companies. After a customer visits the platform’s website and customer based on previous CRM data describing catalog mailings, emails and
enters vehicle, demographic and contact information, the customer is shown transactions for individual customers and then use this information to stratify
several car insurance quotes. Customers who do not purchase online are then customers. In several experiments, the stratified analysis improves the accuracy of
contacted via telephone by the platform’s call center agents. Using data from this the estimator enough to determine that a campaign was effective when it was
platform and estimating econometric models with instrumental variables we find previously thought otherwise.
that as the time that it takes the platform to contact a customer increases, the
probability that the customer purchases one of the insurance policies decreases.
This suggests that the platform might gain from improving the speed at which it
contacts its website visitors. One approach to accomplish this goal is to increase
the call center capacity by hiring more agents. However, doing so reduces their
utilization and may hence reduce the compensation obtained by each agent. We
empirically find that a reduction in an agent utilization translates a higher
probability of the agent quitting her job, thus reducing the average experience of
the call center agents. Since more experienced agents exhibit a better
performance at converting quotes into purchases, this creates a tradeoff for the
platform where on the one hand a greater call center capacity leads to better
speed of contact but also reduces the incentives for experienced agents to keep
their jobs at the platform. In this paper, we empirically quantify this tradeoff and
provide guidelines in terms of how these capacity decisions should be made.
10
n TB03
goods purchased. The effect of salience on quality accounts for at least one-third
of the overall revenue decline.
Room 34, Alter Hall 3 - A Simple and Robust Estimator for Discount Factors in Optimal
Marketing-Operations Interface Stopping Dynamic Discrete Choice Models
Oeystein Daljord, University of Chicago, Chicago, IL, United States,
General Session Oeystein.Daljord@chicagobooth.edu, Denis Nekipelov,
Chair: Jiong Sun, Purdue University, West Lafayette, IN, 47907, Minjung Park
United States, jiongs@gmail.com We propose a simple two-step estimator for the discount factor in a class of
Co-Chair: Juncai Jiang, University of Texas-Dallas, Dallas, TX, 75252, dynamic discrete choice models. The estimator follows from a constructive
identification result and has an intuitive interpretation: it recovers the discount
United States, jxj072000@utdallas.edu factor as the sensitivity of current period choice probabilities to shifts in the
1 - The Impact of Wal-mart’s Sales Information Disclosure on continuation values. The estimator is derived as the solution to a single well-
Supplier Performance behaved moment condition which is linear in the discount factor and is
Juncai Jiang, Virginia Tech, Blacksburg, VA, United States, independent of the utility function. The estimator is therefore easy to implement,
jcjiang@vt.edu, Chenxi Zhou, Jiong Sun computationally light, and in contrast to existing estimators, robust to biases from
finite sample approximations to the unknown utility function. We apply the
This paper investigates whether and how the stoppage of a dominant retailer’s estimator to data on mortgage defaults under an identifying assumption of time
sales information disclosure affects supplier performance. Specifically, we focus on homogeneity of the utility function. We compare the performance of the
the monthly Comparable Store Sales (CSS) index that represents the retail sales proposed estimator to alternative two-step estimators that jointly estimate the
growth rate for stores that have been opened up for at least one year, and discount factor and the utility function. The results show that our proposed
empirically investigate the change in suppliers’ financial performance when Wal- estimator’s robustness to finite sample approximation bias and its computational
Mart withdraws monthly CSS. We found that the cessation of Wal-Mart’s ease do not necessarily come at material expense of precision.
monthly CSS disclosure is associated with negative supplier abnormal returns.
However, not all suppliers are hurt equally: the negative financial response is 4 - Retail Competition with Online Shopping
more pronounced for suppliers with higher sales volatility and suppliers who Yufeng Huang, University of Rochester, Rochester, NY, 14627,
served Wal-Mart only (compared with those who supplied to both Wal-Mart and United States, yufeng.huang@simon.rochester.edu,
Target Inc.). Finally, the withdrawal of Wal-Mart monthly CSS is also associated Bart Bronnenberg
with higher supplier inventory volatility for those who served Wal-Mart only.
How does online shopping impact spatial competition in the retail industry? Using
2 - Partial Vertical Ownership in the Presence of large individual-level panel data from the Dutch retail apparel industry, this paper
Downstream Competition directly measures the diversion ratio between retailers in their brick-and-mortar
Jiong Sun, Purdue University, 812 W State St, West Lafayette, IN, and online channels across a variety of retail formats. We find that online
47907, United States, sun664@purdue.edu, Fang Fang, shopping captures high-value customers, intensifies competition between retailers
Baojun Jiang but only through expanding consumer choice sets, and is complementary to the
brick-and-mortar channel within a retail chain.
Partial vertical ownership plays an important role in aligning the incentives of
firms involved in vertical relationships. This paper examines the impacts of partial
vertical ownership on pricing decisions, firm profitability, and consumer surplus.
We show that intense competition may hurt consumers when the acquiring firm n TB05
is a low-value firm.
3 - Return Policy and Product Design in Direct and Indirect
Distribution Channels Panel Discussion on Digital Marketing Applications
Buqing Ma, University of Science and Technology of China, of AI and Deep Learning II
Hefei, China, mabuqing@illinois.edu, Lu Hsiao, Yunchuan Lin Invited Session
We study firms’ return policy and product quality design in direct vs. indirect Chair: Jing Peng, University of Connecticut, Storrs, CT,
distribution channels. We find that contrary to conventional wisdom, sellers may
jing.peng@uconn.edu, Raghuram Iyengar, Kartik Hosanagar
offer less lenient return policy in direct distribution channels and we also
characterize the market and cost conditions under which either channel offers 1 - Panel Discussion on Digital Marketing Applications of AI and
misaligned product quality and return policy. Deep Learning II
Moderator: Xueming Luo, Temple University, 1801 Liacouras
Walk, Philadelphia, PA, 19122, United States, luoxm@temple.edu
n TB04 AI and DL algorithms will leverage big and rich data like sentiment, image, video,
Room 35, Alter Hall and diverse subtleties of human interactions in one end-to-end process, not
captured by traditional marketing. Empowered by deep neural networks, new
Research on Consumer and Firm Behavior marketing applications in the industry are astonishing (academic works are
lacking): smart chatbots with personality, consumer classification and unmet
General Session needs detection, user preference discovery and recommendation, social semantics
Chair: Yufeng Huang, University of Rochester, Rochester, NY, 14627, and personalized content curation, digital fraud and data breaches prevention,
United States, yufeng.huang@simon.rochester.edu intelligent customer service and ad targeting, omnichannel marketing and
1 - Market Segmentation and Managerial Effort
Kosuke Uetake, Yale School of Management, 165 Whitney Panelists
Avenue, Room 5477, New Haven, CT, 06520, United States, Catherine Tucker, MIT, 1 Amherst Street, E40-167, Cambridge,
kosuke.uetake@yale.edu, Kevin Williams MA, 02142, United States, cetucker@mit.edu
We document significant heterogeneity in pricing strategies both within and Anindya Ghose, New York University, New York University,
across firms using novel retail panel data. Some categories exhibit follow the New York, NY, 10012, United States, aghose@stern.nyu.edu
leader strategies but there is also considerable variation in probability of response Puneet Manchanda, University of Michigan, Ross School of
and response time across products and categories. We present a model of Business, Ann Arbor, MI, 48109-1234, United States,
behavioral firms where price adjustments are costly and firms are subject to
pmanchan@umich.edu
inattention. We use a moment inequalities estimator to bound managerial costs.
With the model estimates, we decompose the role of inattention and effort in Carl F Mela, Duke University, Fuqua School of Business, Box
rationalizing observed price adjustments. Finally, our counterfactual simulations 90120, Durham, NC, 27708-0120, United States, mela@duke.edu
study the occurrence of uniform pricing and quantify its welfare implications in
oligopoly.
2 - Price Salience and Product Choice
Sarah Moshary, University of Pennsylvania, Philadelphia, PA,
United States, moshary@econ.upenn.edu, Tom Blake,
Kane Sweeney, Steven Tadelis
We study the effect of price salience on product choice along two dimensions:
whether a good is purchased and, conditional on purchase, the kind of good
purchased. Consistent with our theoretical predictions, we find that making the
full purchase price salient to consumers reduces both the quality and quantity of
11
n TB06
multi-source attribution contexts. The proposed model is an extension of the
popular proportional hazards model, in the sense that it allows the cause of an
event to be multiple sources. Our model has several advantages as compared to
Room 234, Alter Hall past modeling efforts in multi-source attribution. First, the model does not
Advertising and Effectiveness speculate on the contribution of each channel apriori, but lets the data
automatically determine the contribution of individual channel based on its
Contributed Session characteristics. Second, it is easy to use and interpret as compared to structural-
Chair: Jing Peng, University of Connecticut, Storrs, CT, form models for attribution, and more rigorous as compared to previous
jing.peng@uconn.edu, Raghuram Iyengar, Kartik Hosanagar rule-based attribution methods. Third, it provides unbiased estimates even if only
part of the sources contributes to the conversion of consumers. We demonstrate
1 - Exploring Whether the Lifting of the Hedge Fund Advertising Ban the effectiveness of our model using both simulated and real-world datasets. Our
has Resulted in Smarter Investments model has implications for marketers in several areas, especially multi-channel
advertising and social media marketing.
Navid Mojir, Harvard Business School, Morgan Hall 141,
Soldiers Field, Boston, MA, 02163, United States, nmojir@hbs.edu,
Andrew Sinclair
The ban on advertising in the hedge fund industry, going back to the Securities n TB07
Act of 1933, was recently lifted as part of the Jumpstart Our Business Startups Act Room 237, Alter Hall
(i.e. the JOBS Act) of 2012. While opponents of the JOBS Act argue that poor-
performing hedge funds would take advantage of it by targeting less-sophisticated Retailing II
investors, its proponents argue that in a market largely considered as a B2B
market - with most of the investors being large sophisticated institutions -
Contributed Session
allowing advertising would reduce search cost for investors and improve the Chair: Byungkee Min, PhD Student, Syracuse University,
allocation of funds in the market as a whole. To assess these arguments, we 721 University Avenue, Syracuse, NY, 13244, United States,
combine data on hedge funds from multiple sources, including Lipper TASS bmin100@syr.edu
database, Form ADV from SEC, and the Wall Street Journal. Taking advantage of
the fact that the JOBS Act affects only US-based investors, we use a difference-in- 1 - A Hidden Side of Consumer Grocery Shopping Choice
difference strategy to explore the effects of the JOBS Act. We find that: i) Hedge Aidin Namin, Assistant Professor of Marketing, Loyola Marymount
funds in fact do respond to the lift of the advertising ban by reducing their use of University, One LMU Drive, MS 8395, Los Angeles, CA, 90045,
“traditional” publicity measures. ii) The JOBS Act has resulted in an increase in United States, aidin.namin@lmu.edu, Yashar Dehdashti
fund flows to hedge funds. Interestingly, the media is playing a more important
role in increasing fund flows to hedge funds after the JOBS Act. iii) The lift of the One of the important decisions which grocery stores’ managers deal with, mostly
advertising ban has resulted in investors paying more attention to more salient on a daily basis, is exercising better control over store traffic on different days of
but misleading predictors of performance when making investment decisions (i.e. the week. This issue may, then, be reflected in better handling of pricing,
performance-chasing). promotions, display, and layout decisions in the store. This study analyzes and
identifies hidden classes of grocery store customers and their choice of items
2 - Automation of Dynamic Marketing Attribution Models purchased on a grocery store trip on different days of the week. Following the
Harpreet Singh, Kvantum Inc., 5188 Selma Avenue, Fremont, CA, literature, the three major groups of grocery shopping products are investigated in
94536, United States, harpreet.singh@kvantuminc.com, this research; these are food/drink, cleaning, and personal care. Using a rich U.S.
Prasad Naik, Shilpi Sharma grocery store scanner dataset, commonly purchased pair of products from each
group of grocery products are selected and examined. Employing an advanced
Marketing performance tracking and optimization can be modeled as a non- latent class analysis technique, i.e., Finite Mixture Modeling, latent classes (i.e.,
linear, dynamic problem solved through ensemble Kalman filters. The key segments) of customers, their sizes, and customers’ choice of grocery items on
challenge in a practical marketing mix setting is to be able to initialize the Kalman different days of the week are revealed and empirically validated. The developed
filter. The use of BFGS or EM type of algorithms does not provide robust solutions model controls for consumer unobserved heterogeneity and accounts for
when estimating the model’s variance parameters. Applying MCMC techniques inclusion of demographic variables which guide the mixing probabilities. Major
combined with Kalman filters, we have developed a robust reliable method that findings indicate that there are two largely different-in-size latent classes for the
avoids manual tinkering of model estimation, thereby enabling significant food/drink, two relatively similar-in-size for the cleaning, and three different-in-
automation. This method can be further extended and made computationally size for the personal care group. For each latent class, descriptive demographics
robust through multiple banks of filter ensembles. Our team has successfully and buyers’ choices on different days of the week are clearly identified. Unveiling
deployed these robust innovations in real world applications for multiple CPG & such hidden patterns has meaningful managerial implications and sheds light on
Retail companies globally. We will present our methods and applications that marketing mix, store traffic management, pricing, and promotion managerial
significantly reduce computational times, thereby empowering brand managers decisions made by retail managers.
towards agile decision-making.
2 - Consumer Trust and Online Payment Options: Determinants of
3 - How Effective is Product Placement as a Marketing Tool? E-commerce in the Least Developed Countries
Simha Mummalaneni, University of Washington, Foster School of Mohamed Muse Hassan, Student, Ritsumeikan Asia Pacific
Business, University of Washington, Seattle, WA, 98195-3226, University, Minamitateishi, Ikku 5-5, Yamaguchi Apartment, No.
United States, simha@uw.edu, Pradeep Chintagunta, 1, Room 720, Beppu, 874-0839, Japan, mmbariise01@gmail.com
Sanjay K Dhar, Yantao Wang
The behavior of consumers in the least developed countries (LDCs) is different
Product placement provides a way for brands to reach consumers in a more subtle than the behavior of consumers in USA or Europe, mainly due to the cultural,
way than through traditional advertising. We use data from both traditional social, and economic contexts (Akman & Rehan, 2014). Therefore, this study
advertising and product placement on television shows to compare how both investigates the impact of consumer trust and online payment options available
approaches affect consumer demand for brands in the soda, diet soda, and coffee on the awareness level and perception of e-commerce, and propensity to shop
categories. Our approach is to estimate a logit demand model using store-level online among consumers in the least developed countries, taking Somalia as a
sales data, while accounting for heterogeneity in consumer preferences and case study since the country has achieved the second highest Internet growth in
response parameters across markets. Estimates from this model indicate that Africa after Democratic Republic of Congo between 2000 and 2017 (ITU, 2017).
product placement is generally effective, but that the elasticities are small: average We developed a model with five constructs, and empirically tested the model with
short-term elasticities are around 0.01 for the major brands in the data, which is 500 respondents. The paper employs a survey design approach, and 500
lower than the estimated elasticities for traditional TV advertising but on the same questionnaires were distributed with 78 percent completion rate. The main
order of magnitude. However, there is a significant amount of heterogeneity in findings of the study indicate that the support of mobile payment option by the e-
elasticities across categories, brands, and geographical markets; in the coffee retailers is a critical factor in Somalia as one-third of the population has mobile
category and for Diet Coca-Cola, we find that product placement is more effective bank accounts, compared to less than 10% who use traditional bank methods.
than traditional TV ads. The study also found that awareness of e-shopping is very low, and Somali people
have mixed reactions toward the perception of online shopping as this is still a
4 - A Novel Approach to Attribution in Decisions Influenced by new endeavor in its infancy stage. Instead, Somalis prefer cash on delivery (COD)
Multiple Sources method. The main conclusion is that Somalis would embrace e-commerce if a
Jing Peng, University of Connecticut, 2100 Hillside Road, mobile option is allowed as part of the payment options available. The paper
Unit 1041, BUSN 368, Storrs, CT, 06269, United States, concludes with a discussion of the managerial implications of the study.
jing.peng@uconn.edu, Raghuram Iyengar, Kartik Hosanagar
Consumers often make decisions under the influence of multiple sources (e.g.,
promotions, ads, and friends) and it’s important for managers to identify the
contribution of each source in the decision process. Despite the obvious
managerial implications of the multi-source attribution problem in consumers’
decision-making process, there is limited past research primarily due to the lack of
a suitable methodological framework. In this paper, we propose a general
reduced-form regression model that can be easily applied to various kinds of
12
3 - Optimal Return and Re-sale Policies for E-tailers is here that education is currently poised to generate the most positive externality
Byungkee Min, PhD Student, Syracuse University, 721 University for the society. The goal and contribution of our study is to address this
Avenue, Syracuse, NY, 13244, United States, bmin100@syr.edu, conspicuous research gap in the literature. Specifically, using the World Bank’s
data from a statistically representative survey of nearly14,000 urban households
Eunkyu Lee
in Kenya, our study sheds systematic insights into the key determinants of
Due to the limited observability of product and uncertainty of product fit with household decisions on whether and how much to spend on education. We
consumer preference, e-tailers are encountering a large number of product present novel findings into the roles of social identity, financial leverage, and
returns. Combined with the widespread lenient return policies, the skyrocketing digital access. Of particular interest are the roles played by the educational
returns volume is triggering significant cost issues for e-tailers. Meanwhile, some attainments of parents as well as the genders of children within a household. We
customers have started to complain that e-tailers are selling previously returned discuss how and why do these roles occur, and how they can inform the broader
goods as new products, even when the consumers can detect it is not truly new issues faced by families, providers, and regulators.
due to imperfect packaging. In a profit-maximizing firm’s perspective, it can
decide to re-sell non-defective returns. However, e-tailers should keep in mind 3 - Adoption Intention of Kidney Patients for E-health Device –
that such re-selling practice might affect the online consumer behavior and Mediating Effect of Social Capital
produce adverse effects for the firm. The purpose of this study is to identify the Fang Chi Chang National Chung Hsing University, Taichung City,
optimal return and re-sale policy for e-tailers when re-selling returned goods is Taiwan, rtyufj852@gmail.com, Ming Chih Tsai, Shiau-Chi Lin,
allowed. This paper develops an analytical model taking into account the current Yi Shin Chen
e-commerce environment, and seeks to identify optimal strategies for better
product returns management. Our initial results indicate a significant impact of Internet of things (IoT) has increasingly become new solutions across sectors. As
category-specific market environment and inventory salvage value on the firm’s the technology incessantly evolved, customer adoption becomes essential for
optimal choice of pricing and return policies. success. In essence, IoT involves multiple-players in operations. Social issue is
significant in affecting technology adoption, but it is yet well discussed in extant
innovation studies. By integrating theories of social institution, social capital and
technology acceptance model, this study develops an analytical model for
n TB08 assessing patient behavior of adopting e-health device. Taiwanese kidney patients
(totally 3.2 million, ranked as 1st in terms of medical resource consumption)
Room 238, Alter Hall adopting e-self-heath control devices providing on-line health information for
CB - Social Influences interaction with medical physician are targeted for empirical study. The model
consists of 7 constructs investigating the social influences of kidney patient on
Contributed Session adopting the e-health device, where social capital between patient and physician
(p/p) is treated as a mediating variable and treatment length as a moderating
Chair: Qin Zhang, Pacific Lutheran University, 12180 Park Avenue variable. Totally 221 valid samples classified into two treatment length groups are
South, Tacoma, WA, 98447, United States, zhangqc@plu.edu collected through face-to- face interview with the aids of a teaching hospital in
1 - Contagion of the Competitive Spirit: The Influence of a central Taiwan. The result indicates that the adoption behaviors of the kidney
Competition on Non-competitors patients vary by treatment length. For the long-time patients, the e-health care
may result in excessive social capital and thus reduce the adoption intention.
Vincent Mak, Cambridge Judge Business School, University of
Conversely the new patients would adopt the e-device as with the great benefit of
Cambridge, Trumpington Street, Cambridge, CB2 1AG, United increasing the p/p social capital. The study result provides important information
Kingdom, v.mak@jbs.cam.ac.uk, Raghabendra KC, Marcus Kunter helping hospital improve p/p social capital and the IoT developers justify
From customer contests to innovation awards, competitions are ever-present in marketing strategy.
social life. The recent rise in gamification strategies, in areas such as marketing 4 - The Neighborhood Effect in Charitable Giving
and crowdsourcing, further popularizes attempts to motivate people by engaging
them in competitions. However, such initiatives may not always induce full or
Qin Zhang, Assistant Professor of Marketing, Pacific Lutheran
majority participation among the target population: it is typical in a competition University, 12180 Park Avenue South, Tacoma, WA, 98447,
that the competing individuals are far outnumbered by people who do not United States, zhangqc@plu.edu, Sang-Uk Jung
participate in it but are aware of it. We report a series of experimental studies that We propose a spatial autoregressive model to investigate the neighborhood effect
investigate the influence of a competition on non-competitors who do not on consumers’ charity giving behavior. The empirical study uses a dataset that
participate in it but are aware of it. Our first study is a large-scale field experiment contains donation information of 946 consumers to a single charity organization
involving pay-what-you-want entrance at a German zoo (N = 22,886). We find over five years in the North Island of New Zealand. The results show a significant
that customers who were aware of a competition over entrance payments, but did positive neighborhood effect on the amount of donation. This indicates that
not participate in it, paid more than customers who were unaware of the consumers’ donation behaviors to a charity are interdependent and their
competition - establishing the presence of the contagion effect. The second study decisions of how much to donate are influenced by others in their social network.
finds further confirmatory evidence for the effect in a controlled laboratory This finding has implications on marketing strategies for non-profit organizations
setting. The third study eliminates alternative explanations and necessitates the and suggests that a geographically concentrated approach is likely to solicit more
need for competition for the contagion effect to occur. The fourth experiment donation than direct effort on individual consumers.
provides further confirmatory and process evidence for the effect, showing that it
is driven by heightened social comparison motivation due to mere awareness of
the competition. Moreover, we find evidence that the reward level for the
competitors could moderate the contagion effect on the non-competitors. Even if n TB09
an individual does not participate in a competition, their behavior can still be
influenced by it; and this influence can change with the characteristics of the Room 239, Alter Hall
competition in an intriguing way.
Personalization, Engagement & Choice
2 - Roles of Social Identity, Financial Leverage, and Digital Access on Contributed Session
Households’ Spending Behaviors on Education: Insights From a
Sub-saharan Country Chair: James Dearden, Lehigh University, Bethlehem, PA,
Debu Talukdar, Professor, University at Buffalo, 215 E Jacobs United States, jad8@lehigh.edu
Management Center, Buffalo, NY, 14260, United States, 1 - A Personalization Field Test From Industry
dtalukda@buffalo.edu Richard Loa, Canadian Broadcasting Corporation,
The critical role of education in our contemporary society can hardly be 250 Front St W,, Toronto, ON, Canada, richard.loa@cbc.ca
exaggerated. For an individual, education is often the key to better employment The Canadian Broadcasting Corporation (CBC) is performing an experiment to
and economic security. From an aggregate perspective, educational attainments of prolong session extension while delivering utility to the Canadian. The
its people have huge positive externality effects on the quality of a country’s mechanism for delivering the utility is providing a list of reading
human capital and thus on its long-term economic development. Not surprisingly, recommendations on the CBC search page independent of search engine results.
worldwide annual spending underlying consumption of educational services runs In this session we will briefly touch upon the motivation of the experiment,
into trillions of dollars. Given its pivotal social and economic role, research experiment design, results of the experiment and next steps the CBC plans to take
insights into factors affecting spending on education are of keen interest to both after knowing what they know now.
education providers and policy makers. However, data availabilities have meant
that research has mostly focused on public spending by governments. In contrast,
rigorous research on private spending behavior by households remains quite
limited. In fact, it is practically non-existent for African countries, even though it
13
2 - User Designed Products and Their Value to New Ventures

Miriam Lohrmann, GGS (German Graduate School of n TB10
Management and Law), Bildungscampus 2, Heilbronn, 74076, Room 605, Alter Hall
Germany, miriam.lohrmann@ggs.de, Tomas Bayon
Crowdfunding
Across different industries, new ventures, like Threadless, mymuesli, and 5 CUPS
and some sugar, have established their companies based on user designed Contributed Session
products. Focusing on low-complexity products, these companies actively Chair: Tingting Fan, The Business School of the Chinese University of
integrate their customers in the innovation process, are closer to their customers’
Hong Kong, Room 1113, 11/F, Cheng Yu Tung Building, No. 12 Chak
needs and wants, and signal that potential customers are interested in their
company. Prior research has shown that companies introducing low-complexity Cheung Street, Shatin, Hong Kong, tfan@stern.nyu.edu
products, designed by users, are able to increase customer purchase intention and 1 - Novelty in Crowdfunding: Prototypicality as a Success Predictor
have lower failure rates than those utilizing professional designers. However this Jihoon Hong, University of Southern California, Marshall School
effect has been rarely discussed in a new venture context. The introduction of of Business, 3670 Trousdale Parkway, Los Angeles, CA, 90089-
valuable and needed products is crucial for new ventures to enhance customer 0808, United States, jihoon.hong.2020@marshall.usc.edu,
cognitive legitimacy (CCL), i.e. the customer’s curiosity about the company and
Dinesh Puranam, Gerard J Tellis
the product, their belief in the future existence, and the management’s
competence, and become established. Therefore, this research focuses on the Previous literature suggests that the balance between novelty and familiarity
manner in which potential customers respond to the existence of low-complexity increases the likelihood of success in domains such as scientific research, patent,
products designed by users and on the mediating effect of CCL in a new venture and idea generation. In this paper, the authors examine whether the balance
context. Moreover, since positive recommendations lead to positive cognitions between novelty and familiarity affects the success of the projects in the context
that will decrease the customer’s uncertainty and establish confidence in the of projects listed on a crowdfunding platform - Kickstarter. Using text from project
product, we suggest that positive word of mouth (WOM) will intensify the descriptions in 47 categories, the authors construct a semantic network of words.
mediating effect of user designed products on customer cognitive legitimacy. We The distribution of the relative importance of words for each project is compared
test our theory in an experimental setting, by using a 2 (user designed vs. design to the average distribution of the relevant category to construct a measure of
by designers) x 2 (positive WOM x no WOM) between-subjects design. We balance (between novelty and familiarity). A key finding is that projects closer to
provide important insights to new ventures that will enhance their chance to the average distribution are more likely to be successful, after controlling for the
survive. project related factors such as goal, rewards, etc. Further, including this measure
of balance improves models that predict the success of the project, as early as at
3 - Visual Distraction as a Measure of Engagement the start of the project. These results hold in 31 categories and are potentially
Moran Cerf, Professor, Kellogg School of Management, useful for both researchers and practitioners.
2001 Sheridan Road, Evanston, IL, 60208, United States,
informs@morancerf.com 2 - Market Entry Through Crowdfunding
Peng Wang, University of Arizona, 1130 E Helen Street, Tucson,
The level of consumers’ engagement with marketing communications, as well as AZ, 85721-0108, United States, pengw@email.arizona.edu,
with products and services such as television shows and movies, is attracting
Bikram Ghosh, Yong Liu
increased interest from marketers. Consumers who are more highly engaged can
react to a communication more positively, become more loyal, and place a higher Increasingly crowdfunding has become a popular channel for entrepreneurs to
value on products. However, measuring engagement has proved challenging. start their business. This paper builds a game-theoretic model to analyze award-
Using surveys can create researcher and interviewer bias. Furthermore, based crowdfunding as a market entry strategy versus the traditional market
consumers may not be conscious of how engaged, or disengaged, they are with entry. The entrepreneur faces market uncertainty in both cases and has to make a
communications or products, and so cannot provide useful self-report pricing decision for the new product. However, the different funding procedures
information. Finally, halting the experience to ask people to reflect on their resolve market uncertainty differently and the pricing decision needs to be made
engagement stands to interfere with the immersion itself, making the self-report at different times. We show that the attractiveness of crowdfunding relative to
flawed. Methods such as fMRI or EEG can address some of these issues given that traditional funding relies on the critical tradeoff between safeguarding against
they are measuring the experience without interfering with it, but those methods poor market conditions, which is possible by crowdfunding, and pricing flexibility,
are expensive and intrusive, and sample sizes are typically limited. This research which occurs in traditional funding. When the capital requirement for production
proposes a new method for measuring engagement, which proposes that cost is sufficiently high, the entrepreneur should choose crowdfunding since it is
engagement is negatively related to consumer’s tendency to be distracted. more important to safeguard the entrepreneur from investing heavily in risky
Specifically, consumers are less likely to be distracted while viewing a projects. However, when the production cost is low, crowdfunding becomes less
communication or visually based product such as a movie. We placed small visual desirable; pricing flexibility becomes more important. We also model the
distractors in a participant’s visual field while they were viewing content and used entrepreneur’s advertising decisions with the two market entry strategies and find
eye-tracking to determine their tendency to move their gaze towards the that he or she should spend less on advertising when choosing crowdfunding for
distractor. We tested this method in two experiments involving clips from a market entry. These results hold regardless of the situation of variable production
dramatic television show and from a sporting event. For each clip, we cost. We further analyze consumer welfare and the implications of crowdfunding.
manipulated the presentation of the content to have relatively high, versus low,
engagement, and then compared the tendency of viewers in each condition to 3 - Modeling Dynamics in Equity-based Crowdfunding
move their gaze towards the distractors. We find that the tendency to be Chul Kim, Assistant Professor, Baruch College, City University of
distracted is related to the level of engagement. New York, 55 Lexington Ave, New York, NY, 10010, United States,
chul.kim@baruch.cuny.edu, Pallassana K. Kannan, Michael
4 - Strategic Manipulation of University Rankings, the Prestige Effect, Trusov, Andrea Ordanini
and Student University Choice
James Dearden, Lehigh University, Bethlehem, PA, United States, We investigate various dynamics characterizing an equity-based crowdfunding
jad8@lehigh.edu, Rajdeep Grewal, Gary Lilien process: stagnation after friend-funding, gradual increase by crowd’s participation,
and acceleration in the last phase. We propose forward-looking investment
We develop a multi-period theoretical model to characterize the relationship behavior and social interactions as the major source of these dynamics. We
between a publication that ranks universities and the target audience for that develop a dynamic structural model to accommodate active social interactions
ranking: prospective students who might view the ranking and use it to help among forward-looking investors to capture the contrasting dynamics within a
decide which university to attend. We suggest that published rankings not only unified framework. Methodologically, our approach can handle multiple-
o er information about the objective quality of universities, but also have an e ect discrete/continuous investment decisions in a forward-looking manner with a
on the prestige of universities, an element in students’ utility functions beyond closed-form likelihood function, thereby applicable to high-dimensional data with
objective university characteristics. We show that a prestige e ect can incent a large choice set. Using Bayesian estimation methods, we analyze individual-
publications to take actions that are not in the best interest of the students, such level investment and network data from a crowdfunding platform, Sellaband and
as excessive changes to their ranking methodology, a practice U.S. News & World find the strong evidence of forward-looking behavior and social interactions. We
Report (USNWR) has been accused of. We show that if a ranking that uses an find that the proposed structural model shows very good prediction performance
attribute-and-aggregate methodology (the ranking methodology USNWR and at the project level, even though it predicts on the individual level. We simulate
BusinessWeek use) creates prestige, then, to maximize profit, the publication (1) counterfactuals to derive optimal crowdfunding policies for both fundraisers and
should choose attribute score weights that do not match student preferences for platforms. For fundraisers, we find the largest possible goal and the smallest
attribute scores and (2) should change those attribute score weights over time possible proportion of profit sharing, which maximizes both the chance of success
even if there are no changes in student preferences. If a prestige e ect is not and the outcome of fundraising. For quality measures for platforms, we suggest
present, the publication should choose attribute score weights that match student drop-out elasticities and discover the demand increase in response to decrease in
preferences. We use our model to characterize an all-student-optimal ranking fear of drop-out.
methodology - one that maximizes the sum of the utilities of students who view
the ranking and the utilities of the students who do not view the ranking. We
show that the prestige created by the publication’s ranking drives it to set a profit-
maximizing ranking methodology that is not all-student optimal. We conclude by
discussing how students should deal with published rankings in the current
environment, and what types of ranking methodologies could be developed to
better represent student preferences.
14
4 - The More the Merrier? A Study of Knowledge Quality on an Online Prosper.com, an online crowd-funding platform. The authors find that loan
Knowledge Sharing Platform requests written by defaulting borrowers are more likely to include words related
Tingting Fan, The Business School of The Chinese University of to their family, mentions of god, short-term focused words, the borrower’s
financial and general hardship, and pleading lenders for help. The authors further
Hong Konog, Room 1113, 11/F, Cheng Yu Tung Building,
observe that defaulting loan requests are often written in a manner consistent
No. 12 Chak Cheung Street, Shatin, Hong Kong, with the writing style of extroverts and liars.
tingtingfan@baf.cuhk.edu.hk, Jia Liu, Leilei Gao
3 - Can User Generated Content Predict Restaurant Survival:
Online knowledge sharing (e.g., Quora, Zhihu, StackOverflow) has become a
trending way for people to seek knowledge from each other on internet.
Deep Learning of Yelp Photos and Reviews
Compared with traditional knowledge sharing organizations (e.g., schools, Lan Luo, University of Southern California, 3660 Trousdale
institutions), online knowledge sharing provides an open platform which allows Parkway, ACC306, Los Angeles, CA, 90089, United States,
knowledge to be shared and diffused in a bigger scale with a lower cost. Millions lluo@marshall.usc.edu, Mengxia Zhang
of people have contributed a huge amount of knowledge to those platforms in With widespread usage of smartphones, 3 billion photos are shared on the
merely a few years and many online knowledge sharing platforms have been Internet daily. Nevertheless, very few papers have examined whether and how
valued billions of US dollars. Despite the dramatic growth of online knowledge the prosperity of a business may be affected by consumer posted photos. We use
platforms, they are all facing an urging challenge: how to incentivize people to deep learning methods to analyze 795,175 photos and 1,015,825 reviews posted
contribute high quality knowledge? Our research taps into this challenge by on Yelp from 2004 to 2015 on 17,796 restaurants. Tracking the survival of these
studying knowledge sharing behavior on Zhihu.com, one of the largest online restaurants during this time period, we find that both volume and valence of
knowledge sharing platforms in China. By collecting a panel of 132,000 users’ photos are strong predictors of restaurant survival. Nevertheless, when it comes to
shared knowledge (approximately 2 million answers on 1 million questions) since reviews, only valence (not volume) matters. Interestingly, even after controlling
the first day of their registration, we investigate (1) how does the quality of for the content, star rating, and length of reviews, consumer sentiment extracted
shared knowledge evolve over time? (2) how is the quality of a user’s shared from review text is still strongly associated with the survival of restaurants. We
knowledge influenced by other users’ shared knowledge? (3) how is the quality also find that chain restaurants and restaurants from larger categories have
of a user’s shared knowledge influenced by social interactions among other users? greater chance to survive. Ceteris paribus, price levels do not appear to impact
Using a panel data model with individual user fixed effects, we find that in the restaurant survival. Our research is among the earliest attempts to introduce both
first few days after a question is post online, a user contributes higher quality photo- and text- based deep learning in marketing. We are also the first to
knowledge if other users have shared a good amount of knowledge, but compare and contrast managerial impacts of consumer posted photos vs. reviews.
afterwards as the amount of shared knowledge increases, he is likely to contribute To our knowledge, this is also the first large-scale empirical research on restaurant
lower quality of knowledge. We also find that the quality of shared knowledge survival.
increases as the social interactions among other users increases.
4 - Targeting and Privacy in Mobile Advertising
Hema Yoganarasimhan, University of Washington, Seattle, WA,
n TB11 United States, hemay@uw.edu, Omid Rafieian
Mobile in-app advertising is growing in popularity. While these ads have excellent
Room 606, Alter Hall user-tracking properties through mobile device IDs, they have raised concerns
Machine Learning Applications in Marketing: II among privacy advocates. There is an ongoing debate on the value of different
types of mobile targeting, the incentives of ad-networks to engage in behavioral
General Session targeting and share user-data with advertisers, and the role of regulation. To
answer these questions, we propose a modeling framework that consists of two
Chair: Hema Yoganarasimhan, University of Washington, Seattle, WA, components — a machine learning framework for predicting click-through rate
98195, United States, hems_y@yahoo.co.in and a stylized analytical framework for conducting data-sharing counterfactuals.
1 - Measuring the Impact of Trial Period Lengths using Causal Using data from the leading in-app ad-network of an Asian country, we show that
Forests: Evidence from a Field Experiment our machine-learning model improves targeting ability by 17.95% over no
Ebrahim Barzegary, University of Washington, 481 Paccar Hall, targeting. These gains mainly stem from behavioral information and the value of
contextual information is relatively small. Stricter regulations on user tracking
Foster School of Business, Seattle, WA, 98195, United States,
substantially shrink the value of behavioral targeting. Counterfactuals show that
ebar@uw.edu, Hema Yoganarasimhan the total advertisers’ surplus grows with more granular information sharing
A commonly used customer acquisition strategy in the software industry is to between the ad-network and advertisers. However, there is heterogeneity among
offer consumers a limited period of time to try the product for free. However, no advertisers in their preferred level of data sharing. Importantly, the ad-network’s
research has examined the issue of optimizing the length of these free-trials. revenues are non-monotonic, i.e., it prefers to not share behavioral information
Using data from a large-scale field experiment run by a leading software firm, we with advertisers. Thus, the ad-network may have natural incentives to preserve
study the relative effectiveness of three trial lengths — 7, 14, and 30 days. We users’ privacy without external regulation.
find that the shortest trial length of 7 days is the best option at the aggregate level.
Next, we use the newly developed causal random forests methodology to uncover
the rich heterogeneity in treatment effects and quantify effects at the individual-
level. We then use our estimates to examine the returns to counterfactual
treatments. When we move all consumers to the 7-day free trial, we see a 4.42%
increase in subscriptions and an 8.11% increase in revenue/user. As we increase
the customization of the treatment, these numbers increase, e.g., when we assign
the best average trial-period for the country to all users from that country, the
subscriptions increases by 4.9% and revenue/user by 9.06%. When we fully
personalize trial-length at the user-level, subscriptions increase by 24.18% and
revenues/user by 41%. Our results emphasize the value of combining machine-
learning methods for causal inference with field-experiments to personalize
marketing mix variables.
2 - When Words Sweat: Identifying Signals for Loan Default in the
Text of Loan Applications
Alain Lemaire, Columbia University, New York, NY, 1027,
United States, Alemaire18@gsb.columbia.edu, Oded Netzer,
Michal Herzenstein
The authors present empirical evidence that borrowers, consciously or not, leave
traces of their intentions, circumstances, and personality traits in the text they
write when applying for a loan. This textual information has a substantial and
significant ability to predict whether borrowers will pay back the loan over and
beyond the financial and demographic variables commonly used in models
predicting default. The authors use text-mining and machine-learning tools to
automatically process and analyze the raw text in over 18,000 loan requests from
15
n TB12 3 - Structural Embeddedness and Business Partner Selection:

A Network Perspective
Room 745, Alter Hall Fereshteh Zihagh, The University of Texas at Dallas, Richardson,
TX, 75080, United States, fereshteh.zihagh@utdallas.edu,
Marketing Strategy – Network Effects Brian T. Ratchford, Xiaolin Li
Contributed Session In business-to-business markets, successful selling of complex and knowledge-
Chair: Lixian Qian, Xi’an Jiaotong-Liverpool University, International intensive services depends heavily on how parties resolve ex-ante uncertainty
Business School Suzhou (IBSS), 215123, China, qianlixian@gmail.com and reliability concerns regarding the procurement. Both sides prefer partners
that could generate higher values in the sourcing process, which is dependent on
1 - Disclosure of Pricing Information in Earnings Calls – An Empirical firms’ perceived abilities to meet functional and technical requirements of project
Investigation development process. In this paper, we build a structural two-sided matching
Alexander Edeling, Assistant Professor of Marketing, University of model to quantitatively study the importance of interfirm connections and the
Cologne, Albertus-Magnus-Platz, Cologne, 50923, Germany, information ensuing from them in firms’ preferences for matching with certain
edeling@wiso.uni-koeln.de, Benedict Fälker firms. Buyers and sellers are related to each other because the existing
information and resources embedded in dyads that collaborate on a project carry
Despite Warren Buffet’s statement that pricing power is the most important factor over to other dyads that share a buyer or seller, and this pattern of information
when evaluating a business, practitioners and researchers alike often neglect and knowledge flow between firms creates firm social capital. To model this
pricing’s role in driving firm value. In contrast to other marketing action variables information flow, we use a comprehensive dataset of outsourcing contracts signed
such as advertising, research regarding the dissemination of pricing information in in years 1989-2013 and construct an interfirm network of buyers and sellers that
corporate disclosure and the impact of pricing on firm value is scarce. We fill this transact in IT service outsourcing markets. The matching model controls for the
research gap by analyzing the occurrence of pricing information in the corporate availability of outside options and impact of firm competitiveness on selection
disclosure medium earnings calls and by investigating how this information decisions for both sides. The effect of differential firm social capital and
affects firm value. We develop a conceptual framework of pricing information in competitiveness are ignored in extant contracting literature. Results suggest that
earnings calls and distinguish between positive (e.g., price increases), neutral vendors’ positional embeddedness (being historically connected to central clients)
(e.g., pricing strategies) and negative pricing information (e.g., low pricing power) and brokerage (i.e., the ability to absorb novel, nonredundant and rich
according to the favorability for investors. As measure of changes in firm value, information in the network) reduces the perceived contracting uncertainties, and
we use the intra-day abnormal return around earnings calls. Based on 150 positively affect the matching outcome, particularly by increasing match
earnings calls of companies from three industries, we find that managers provide likelihood with medium- and large-sized clients. However, the positive effect of
pricing information in the vast majority of earnings calls. While they frequently vendor social capital diminishes for small and enterprise firms.
address price execution (e.g., price changes), they only occasionally discuss
pricing objectives and strategies. We find that the provision of negative pricing 4 - Rich or Reach? Spatial Network Effect of Battery Charging
information significantly decreases firm value, while the provision of positive Stations in Electric Vehicles Adoption
pricing information exerts no significant effect. When we distinguish between Lixian Qian, Associate Professor, Xi’an Jiaotong-Liverpool
proactive and reactive pricing information, we show that investors only respond University, International Business School Suzhou (IBSS), 215123,
negatively to negative pricing information when analysts explicitly request the China, lixian.qian@xjtlu.edu.cn, Cheng Zhang, Yuxin Chen
information. These findings have several implications regarding the general
power of pricing and the disclosure of pricing information in corporate Electric vehicles (EVs) have been proposed as a major technology to achieve
communications. substantial reduction in fuel consumption and greenhouse gas emission. Since the
limited driving range is one dominant factor that constrains consumer adoption,
2 - When Customer Spending Backfires: Customer Trade-offs battery charging stations play a significant role in reducing consumers’ range
Between Durable Products Replacements and Add-on Purchases anxiety. Using Tesla’s state level data in the U.S., this study investigates the spatial
Delia-Olga Ungureanu, PhD Candidate, BI Norwegian Business network effects of focal and neighborhood states’ battery charging stations in the
School, Nydalsveien 37, Oslo, 0442, Norway, EVs’ adoption. The results suggest asymmetric and spatial network effects in
olga.d.ungureanu@bi.no, Rutger van Oest several ways. While the vehicle demand in a focal state is more strongly
influenced by the expansion of charging network than in the other direction, the
Firms often introduce successive product versions, while also selling add-ons that more charging stations in neighboring states result in lower adoption of EVs in
enhance the base product’s value. We posit there are inherent trade-offs between the focal state. However, the growth of registered EVs in neighboring states leads
add-on purchases and product version replacements. Replacements often make to more development of charging stations in the focal state. Further, two types of
the old product and its purchased add-ons redundant. Add-ons that are Tesla’s charging stations, supercharger (SC) and destination charging (DC),
contingent on their base products may be perceived as sunk costs and hinder present the different spatial network effects on EVs’ adoption. We discuss the
replacement decisions. This negative effect may decrease with time and with use, theoretical and policy implications of these findings.
until consumers feel they have gotten their money’s worth (payment
depreciation). Consumers may also slow down their spending on add-ons, or
refrain from them completely, in anticipation of newer product versions (waste
aversion). While extant studies have considered replacements decisions, no study n TB13
has examined replacement and add-on purchase decisions jointly. Understanding
trade-offs between purchasing add-ons and replacement products is of great Room 746, Alter Hall
empirical importance for firms that want to maximize total sales from base
products and add-ons. Within the setting of video games (data provided by
Multi - Channel Strategies II
Wharton Customer Analytics Initiative), we jointly model consumers’ decisions of Contributed Session
add-on purchases, game version replacements, and usage. We apply the latent
class framework to control for unobserved consumer differences in terms of usage Chair: Scott Andrew Neslin, Dartmouth College, Tuck School of
and spending. We incorporate geometrically decaying effects to capture the Business, 100 Tuck Hall, Hanover, NH, 03755, United States,
gradual decrease in relevance of past usage and add-on purchases on subsequent scott.neslin@dartmouth.edu
spending and usage. We find a well-balanced three-segment solution. Results 1 - Channel Leadership Styles as an Antecedent to Commitment
indicate past replacements negatively influence add-on purchases across all and Relational Capital: The Moderating Role of Multiple
segments, suggesting the presence of trade-offs between replacements and add-on
purchases. Past add-on purchases have a reinforcing effect on add-on purchase
Channel Complexity
probability, and the estimated decay parameter indicates that 50% of this effect Shivan Sanjay Patel, Indian Institute of Management
decays within a month (approx. 3.6 weeks). Importantly, around half of the Rohtak, MDU Campus, Rohtak, 124001, India,
consumers (one segment) are averse towards buying add-ons when a new fpm04.011@iimrohtak.ac.in, Shivendra Kumar Pandey,
replacement is expected. The same segment is also averse towards making closely Dheeraj Sharma
timed replacements.
Organizations are operating more complex distribution channel systems to reach
to the customers. The benefits realized through such multiple complex channel
systems often come at the cost of difficulty in managing relationships among
channel members. The present work investigates the role of channel leadership
styles on relationship outcomes, specifically, relationship commitment and
relational capital between the channel leader and the member in a franchise
distribution system. The moderating role of multiple channel complexity is also
assessed. The findings reveal supportive leadership style is the most effective in
developing relational outcomes, both commitment and relational capital, whereas
multiple channel complexity moderates the influence of these styles. Results
indicate that participative leadership style is effective in low channel complexity
environments.
16

unstructured textual reviews by developing a set of text analytics algorithms and
2 - Store Brands and Channel Coordination then identifies segment-level key drivers by applying a Bayesian ordinal probit
Woochoel Shin, Associate Professor, University of Florida, mixture regression with variable selection. With the proposed method, firms or
Department of Marketing, 212 BRY, P.O. Box 117155, Gainesville, policy makers can focus on key drivers per each segment in their marketing
FL, 32611, United States, wshin@ufl.edu, Wilfred Amaldoss activities (e.g., online banner advertising, search advertising); this method will
help them systematically keep track of periodic patterns of segment-level key
Store brands are common phenomenon in most retail markets. When the retailer drivers. Using online data from a large review site for rating professors, the author
offers its own brand, both the wholesale price contract and the traditional two- validates the extracted independent variables through multiple validation studies
part tariff fail to coordinate the channel. In the presence of the store brand, the and then discuss heterogeneous key drivers for satisfaction across three derived
traditional two-part tariff contract yields even lower total channel profits than the segments. For the least satisfied segment, the proportion of reviewers is
wholesale price contract. We propose an augmented two-part tariff contract that significantly higher from the Science, Technology, Engineering, and Mathematics
increases the total channel profits by coordinating perfectly the pricing decisions education category than from the other two segments, indicating that professors
but only imperfectly the quality decisions. We further show that the in this segment should focus on more diverse drivers of both core academic and
manufacturer can achieve perfect quality coordination by offering a procurement atmospheric attributes.
contract along with a committed allowance on top of the augmented two-part
tariff. However, neither the procurement contract nor a committed allowance by 2 - Increasing Consumer Engagement with Firm-generated Social
itself can help attain perfect quality coordination. When retailers compete, even Media Content: The Role of Images and Words
in the absence of a double marginalization problem, the augmented two-part Eugene Pavlov, University of Washington, 4009 15th Ave NE
tariff contract can improve the total channel profits. Furthermore, the Apt 822, Seattle, WA, 98105, United States, epavlov@uw.edu,
manufacturer can improve quality coordination by supplying the store brand to Natalie Mizik
the retailer. However, in contrast to a bilateral monopoly, the manufacturer need
not commit to offering an allowance when retailers compete. As firms are embracing visual platforms in their marketing and branding efforts,
little research exists on the relative effectiveness of visual versus text-based
3 - Buyer-supplier Interactions in Times of Adversity – marketing efforts. We develop a quantitative framework to study how text and
The Case of Bankruptcy visual components of firm communications impact consumer engagement with
Vivek Astvansh, Doctoral Candidate, Ivey Business School, firm-generated social media content. First, we quantify the emotional loading of
Western University, 684 Platt’s Lane, London, ON, N6G 3B2, text and imagery on Sentiment and Arousal/Motivation-to-act dimensions
Canada, vastvans@uwo.ca, Kersi D. Antia, Sudha Mani (Russel 1980, Model of Affect). We use existing tools for text processing and use
machine learning and computer vision to develop and train Sentiment and
How buyer firms and their suppliers interact during adverse conditions poses Arousal classification models for imagery. We use basic elements of design (color,
critical implications for both parties, yet remains poorly understood. We texture, shape, lines, curves, corners, edges, orientation, etc.) as inputs to predict
investigate both destructive and constructive reciprocal actions by bankruptcy- Sentiment and Arousal of an image. Our out-of-sample and lab-based validation
declaring buyer firms and their supplier-creditors. The mixed motives of classification accuracy suggest agreement in the range of 75-80%. Next, we
accompanying bankrupt buyer firms’ reorganization efforts drive buyers and their apply the procedure to empirical analysis of engagement (retweeting) with firm-
supplier-creditors actions during bankruptcy. We assess the effect of each of the generated content based on 1,386,388 tweets of 656 brands from 11 categories,
dimensions of reciprocity - what is reciprocated, when it is reciprocated, and who posted since 2006. We find that over the years consumers have developed
reciprocates - on both parties’ destructive acts. We construct a unique multi- resistance to persuasion attempts using high motivation-to-act text, but we do not
sourced database comprising more than 38,000 constructive and destructive acts detect the same decline in effectiveness for images. Further, we find that the
undertaken by both bankrupt buyer firms and their suppliers across 489 effects of text and imagery are highly heterogeneous across industrial sectors (e.g.,
reorganization-related (Chapter 11) bankruptcies in three different industries quick-service restaurants, nonprofits/charities).
between 2001 and 2014. The results of our study speak to the reciprocity
exhibited by buyer firms and their suppliers under adverse conditions. 3 - Employee Minimum Wages and Customer Perceptions of Service
a Deep Learning Methods Analysis of Restaurant Reviews
4 - The Omnichannel Deal Prone Consumer
Dinesh Puranam, Assistant Professor, USC Marshall School of
Scott Andrew Neslin, Dartmouth College, Tuck School of Business,
Business, HOH 615, Trousdale Parkway, Los Angeles, CA, 90089,
100 Tuck Hall, Hanover, NH, 03755, United States,
United States, dineshpuranam@yahoo.com, Vishal Narayan,
scott.neslin@dartmouth.edu, Sara Valentini, Elisa Montaguti
Vrinda Kadiyali
Today’s retail promotional environment is driven by channel proliferation,
We study the impact of a mandated increase in minimum wages on customer
consumers’ channel preferences, and managers’ efforts to create a unified
perceptions of service. The empirical application is to restaurants since they are a
“omnichannel” customer experience, especially across online and offline
major employer of (front-line) minimum wage workers, labor costs are an
channels. This paper identifies and characterizes the deal prone consumer
important part of restaurant costs and front-line employee service is observable to
segments that emerge in this environment. Specifically, we investigate the
customers. We use 372,156 restaurant reviews in the time period January 1st,
existence and determinants of omnichannel deal prone segments - consumers
2008 and April 3rd, 2017 in the city of San Jose where city laws increased the
who use online and offline channels to procure and use promotions. We use the
minimum wage from $8 to $10. We use an additional 160,866 reviews from
motivations-opportunities-abilities (MOA) framework to analyze why consumers
geographically proximate cities in the county as a control group to infer causality
belong to various segments. We apply latent class cluster analysis to a database of
via difference-in-difference estimation. Importantly, we analyze textual data of
over 1000 survey respondents in three product categories. We find omnichannel
customer reviews using deep learning methods to measure various dimensions of
deal proneness dominates the consumer electronics category, but there is a strong
perceived service quality. We find discussions of observable negative service
online-focused deal prone segment in clothing and an offline-focused deal prone
quality decreases in independently-owned restaurants. These predictions are
segment in groceries. Importantly, opportunities and abilities have more
consistent with agency-theory based predictions.
explanatory power than motivations in differentiating segments. Since
opportunities and abilities are more likely to change in the future than 4 - Deep Learning to Predict Consumer Aesthetic Preferences and
motivations, the current size of the various deal prone segments is not in Augment Product Designers
equilibrium. Simulations suggest, for example, an online, not omnichannel, deal Alex Burnap, Massachusetts Institute of Technology, Cambridge,
prone segment may come to dominate the clothing category, driven by an
expected increase in online shopping experience. Our results show how managers
MA, United States, aburnap@mit.edu, Artem Timoshenko,
can target particular deal prone segments to achieve goals such as increasing John R. Hauser
consumption, encouraging brand/store switching, or reinforcing brand/store Aesthetic styling is a key driver of consumer purchase decisions in various
loyalty. product categories, including automobiles, furniture, and clothing. Capturing
consumer preferences for aesthetic styling using a quantitative choice model is
challenging due the high dimensionality of design attributes to represent realistic
n TB14 aesthetic styling relative to functional attributes and price. We introduce a deep
learning approach that learns and predicts aesthetic preferences of heterogeneous
consumers based on images of product designs. This approach is tested on the
Room 607, Alter Hall U.S. automotive market, using aesthetic preference data collected from consumer
Machine Learning - Text Analytics & Design panels. We evaluate how the proposed model can enhance designers’
understanding of the customer preferences by comparing prediction from (1) the
Contributed Session deep learning approach, (2) human experts, and (3) human experts with the
Chair: Alex Burnap, University of Michigan, 334 Beakes St, Apt. 3, deep learning inputs. Deep learning has the potential to successfully predict
Ann Arbor, MI, 48104, United States, aburnap@umich.edu aesthetic preferences and offers improvements to the conventional product design
workflow.
1 - Identifying Segment Level Key Drivers from Unstructured Online
Review Data
Sunghoon Kim, Arizona State University, P.O. Box 874106,
Tempe, AZ, 85287-4106, United States, skim348@asu.edu
The author proposes an integrated machine-learning algorithm to apply a classic
model-based segmentation method in marketing to unstructured online review
data. The proposed procedure extracts an independent variables matrix from
17
n TB15
n TB16
Brand Extensions and Image 2018 ISMS/MSI Gary Lilien Rehearsals
Contributed Session Rehearsal Session
Chair: Yewon Kim, University of Chicago, Booth School of Business,
Chicago, IL, United States, yewon.s.kim@gmail.com n TB17
1 - Dimensions of Brand Extension Fit Room 31, Alter Hall
Paul R. Messinger, University of Alberta, Faculty of Business,
3-20e Faculty Of Business Bldg, Edmonton, AB, T6G 2R6, Canada, ISMS Doctoral Dissertation Proposal
paul.messinger@ualberta.ca, Qian (Claire) Deng Competition Winners
A sizable literature on brand extensions argues that the congruity between a General Session
parent brand and an extension category has a positive effect on consumer
reception of the extension. But the application of this literature is limited because Chair: Olivier Toubia, Columbia Business School, New York, NY, 10027,
of a lack of understanding of what “brand-extension fit” really is. The current United States, otoubia@yahoo.com
paper develops a measurement scale of Brand Extension Fit (the BEF scale) 1 - Letting Logos Speak: A Machine Learning Approach for
consisting of two core underlying dimensions, engineering-based and market- Data-Driven Logo Design
based congruity, each formed by three items. Our proposed scale represents a Ryan Dew, Columbia University, 521 W 112th Street, Apt 62, New
synthesis and extension of the various formative items of congruity used in
York, NY, 10025, United States, RDew18@gsb.columbia.edu, Asim
papers in the literature that consider multi-dimensional measures of fit. We
validate the model with two separate datasets obtained from general consumers Ansari, Olivier Toubia
consisting of judgments about extensions for (a) fictitious parent brands and (b) Logos serve a fundamental role in branding as the visual figurehead of the brand.
real parent brands, providing excellent sample-resample reliability. We provide Yet, due to the difficulty of using unstructured image data, prior research on logo
various analyses using SEM (structural equation modeling) techniques to provide design has been largely limited to non-quantitative studies. In this work, we
evidence of nomological validity. Unlike uni-dimensional measures of fit - such as explore logo design from a data-driven perspective. In particular, we aim to
similarity, fit, consistency, or “makes sense” - used in most of the brand-extension answer several key questions: first, to what degree can logos represent a brand’s
literature, our scale provide guidance for opportunity identification, idea personality? Second, what are the key visual elements in logos that elicit brand
generation, the building of a marketing plan around a chosen alterative, and and firm relevant associations, such as brand personality traits? Finally, given text
understanding the pros and cons of various alternatives. describing a firm, can we suggest features of a logo that elicit the firm’s desired
brand identity? To answer these questions, we develop a novel logo tokenization
2 - On the Dynamics of Brand Extensions: The Case of Movies algorithm, that uses modern image processing and computer vision tools to
Sridhar Moorthy, Manny Rotman Chair in Marketing, University decompose unstructured pixel-level image data into theory-based, human-
of Toronto, 105 St Georges Street, Toronto, ON, M5S 3E6, Canada, meaningful, visual features. We then apply this tokenization algorithm in
moorthy@rotman.utoronto.ca, Masakazu Ishihara conjunction with methods from the machine learning literatures on
In movies, brand extension takes the form of sequels. This paper compares the dimensionality reduction and transfer learning, to a dataset of hundreds of logos.
sales dynamics of movie originals and their sequels. We find that sequels diffuse In our unique dataset, the logos are matched with textual descriptions from firms’
faster than originals—their sales are more front-loaded. This difference in websites, third party descriptions of the firms, and consumer evaluations of brand
diffusion speed is moderated by several movie characteristics. Our econometric personality, which represent many distinct views of the brand: visual, textual, and
methods take into account the endogeneity of the sequeling decision: only consumer-level. By learning mappings across these distinct views, our approach
successful movies spawn sequels, not all movies. We interpret these findings in uncovers links that exist between a brand’s logo, description, and personality, and
light of what they say about the different “information processes” underlying thereby helps us understand the underpinnings of good design, and inform the
original brands and their extensions. design of new logos.
3 - Proposal Method to Evaluate Brand Image by using 2 - Automation, Decision Making and B2B Pricing
Psychophysical Function Yael Karlinsky Shichor, Columbia Business School, New York, NY,
Masao Ueda, Waseda University, 3-4-1 Okubo, Shinjuku-ku, United States, yk2543@columbia.edu, Oded Netzer
Tokyo, 169-8555, Japan, m_ueda@aoni.waseda.jp In the past century, automation has changed the labor market by consistently
replacing repetitive and predictable human tasks. More recently, automation has
In order to maintain a brand power, brand managers want consumers to have a
tapped into tasks that require judgment and soft skills and involve business
good brand image in consumers’ memory for a long time. Nowadays, it is difficult
acumen. We investigate the potential impact of automating experts’ decisions in
for consumers to keep a particular brand image, since brand image is more
one of the most complex and knowledge intensive jobs in marketing - sales. We
affected by social media. To keep a good brand image, the brand managers should
explore the tradeoff between the possible improvement in decisions making as a
examine consumers’ brand image if necessary. For this purpose, a new research
result of automation and the loss of soft skills in the context of salespeople
method is required to equip easiness of implementation and to have enough
making pricing decisions in a business to business (B2B) environment. The B2B
amount of information for decision making. It is needed to satisfy this
market is estimated at $8 trillion in transactions and is largely lagging behind the
requirement, in the present study, in addition to the reaction to the item, the
B2C market in adoption of information technology and automation.
reaction time was also collected and the obtained data was analyzed using a
Consequently, and in light of increasing demand from business client for digital
model applying a function of psychophysics. In the empirical analysis, the author
business channels, the potential for automation is immense. Using secondary data
investigated the brand image of a certain automobile manufacturer A in Japan
from a B2B retailer We find that a bootstrap pricing model of the salesperson
and analyzed obtained data from about 1,000 respondents. It is assumed that the
generates expected profits equal to those of the salesperson, despite the loss of
model had random effects for the intensity of each brand image. The random
noncodeable information available to the salesperson but not to the model.
effect parameters in this model was estimated by Markov Chain Monte Carlo
Furthermore, we find that a hybrid pricing policy that follows the model’s prices
method and estimated results indicated that the proposed method is effective for
in most cases, but the salesperson’s prices in cases where crucial non-codeable
understanding brand images.
information exists, leads to a significant increase in profits to the firm. We then
4 - Natural Experiment on Co-branding: The Case of Museum conduct a high-stakes field experiment with the B2B retailer and find that
Membership Demand providing salespeople with their own model’s prices, in real time, via the CRM
Yewon Kim, University of Chicago Booth School of Business, system, increases gross profit to the company by over 10%, which translates to an
increase in profits of $40k over the eight days of the experiment and a projected
5807 S. Woodlawn Avenue, Chicago, IL, 60637, United States, increase of approximately $2.2 million in yearly profits. We find that the hybrid
yewonkim@chicagobooth.edu, Sanjog Misra, Bradley Shapiro model should use the salesperson and her expertise in pricing complex orders
We study the effect of co-branding on consumer demand in the market for (e.g., special processing is required or the order has many lines) and orders by
museum memberships in California. Over the course of our sample, one major infrequent clients, and that automation is particularly beneficial for low-expertise
museum with a highly recognized brand closed. During the closure, it salespeople. Overall, our findings suggest, that automation of experts’ pricing
sequentially co-branded with two established local museums. With individual decisions in B2B settings is not only feasible but can also lead to increased
panel data on museum memberships, we measure the effect of co-branding on profitability. We show empirically and through a pricing field experiment, that
demand. The results provide two major insights. First, co-branding with the adopting a hybrid automation approach for B2B retail harnesses benefits of sales
closed museum lifts demand for the partner museum. Second, the increased people expertise as well as benefits of automation, depending on the
demand is the product of two counter-acting forces: first, customers with no characteristics of the transaction and the client, and leads to significant increase in
history of buying membership from either museum enter the market, consistent profits. By automating the decision of when to use the expert salesperson and
with the brand providing a quality signal, and second, a sub-group of customers when to use automatic pricing, issues of algorithm aversion and misuse could be
who previously purchased from either or both of the museums display decreased avoided, leading to further increase in profits to the company.
demand consistent with brand dilution. These results have implications for the
treatment of brand intercepts in counterfactuals for co-branding and merger
analysis.
18
INFORMS MARKETING SCIENCE – 2018 TC01

3 - Counter-Cyclical Price Promotion: Capturing Seasonal Category population, we propose a new approach, Bandit Adaptive MaxDiff, which can
Expansion under Endogenous Consumption increase efficiency between two- and four-times over current MaxDiff practices by
Minjung Kwon, NYU, 40 West 4th Street, New York, NY, 10012, accurately identifying the best items with fewer respondents. Our proposed
solution leverages information from previous respondents, so later respondents
United States, mkwon@stern.nyu.edu, Tulin Erdem,
receive designs that oversample the items that are most likely to turn out to be
Masakazu Ishihara the in the overall most-preferred set. Instead of learning all preference parameters
This paper provides a new and complementary explanation for a pricing puzzle with equal precision, Bandit Adaptive MaxDiff more precisely estimates the
for seasonal products, namely, counter-cyclical pricing, drawing on the category- parameters of most interest to the manager. And we find it performs even better
expansion effects of price promotions. Our study emphasizes the seasonal as the problem increases in size. Drawing on the classic multi-armed bandit
fluctuation in promotion frequency rather than the change in aggregate mean literature and the newer best-k-arm identification literature, the work is a
price across seasons, which motivates most existing studies. We propose a collaboration between academics, Sawtooth Software, and Proctor & Gamble
rationale for the counter-cyclical price promotions: consumers are more likely to (P&G). We validate our proposed methods empirically using a variety of
increase category demand in response to promotions during periods of high approaches: simulation, an existing MaxDiff survey results from P&G, and a live
demand, causing seasonally varying promotion effects on category expansion. We in-market randomized test with different target customer respondents with P&G
show promotion effects are amplified during high-demand periods if the product and Sawtooth. We introduce components to resolve practical issues with
category is subject to stockpiling and endogenous-consumption behavior; that is, implementing bandit algorithms, such as, controlling robustness to a changing
consumption is a function of inventory and future-price expectations. Using and faster approximations to full posterior sampling.
scanner-panel data on the canned-soup category, we find households’ purchase
patterns are consistent with the endogenous-consumption hypothesis.
2 - Bingeability and Ad Tolerance: New Metrics for the
Examination across multiple product categories also suggests counter-cyclical Streaming Media Age
pricing is often associated with the categories for which households exhibit Prashant Rajaram, Ross School of Business, University of
endogenous consumption. We investigate the seasonally varying promotion Michigan, 2016 Medford Road, Apt 29, Ann Arbor, MI, 48104,
e_ects using the framework of a dynamic inventory model with forward-looking United States, prajaram@umich.edu, Puneet Manchanda,
consumers (Erdem, Imai, and Keane, 2003; Hendel and Nevo, 2006a) by allowing Eric Schwartz
the consumption rate to be endogenous to household inventory and subject to
the exogenous seasonal fluctuation in category preference. Our results indicate Binge-watching TV shows on streaming services is becoming increasingly popular.
the long-run promotion effects are underestimated by 32% during periods of high However, there is a paucity of comprehensive metrics to effectively summarize
demand if endogenous consumption is ignored, and that with endogenous such media watching behavior. We address this gap by presenting two new
consumption, the long-run promotion effects increase by 24% across seasons, metrics—Bingeability and Ad Tolerance—to quantify key aspects of watching
implying a larger gain of promotions during high-demand periods, which is a streaming TV interspersed with ads. Bingeability captures the number of
motivation for the counter-cyclical price promotions. completely viewed unique episodes in a sitting, and Ad Tolerance captures the
effective amount of content viewed after each ad exposure in a sitting. These
4 - Marketing Strategies with Endogenous metrics are motivated by managerial concerns, consumers’ media consumption
Reference-Dependent Preferences patterns, and the consumer psychology literature on hedonic adaptation. Using
Zuhui Xiao, University of Minnesota, 3-150 CSOM, UMN, machine learning methods, including ensembles of regression trees, we predict
321 - 19th Avenue South, Minneapolis, MN, 55455, United States, the value of these metrics for a user’s viewing session based on their previous
one-week activity on the streaming platform. We also identify the key predictors
xiaox169@umn.edu
of these metrics, study non-linear effects and rank the predictors in order of
Price and compensation schemes used in practice are often much simpler than predictive power. Then the predicted values of the metrics are used as inputs to a
those predicted by neo-classical economic models; quite commonly, some friction novel optimization procedure that recommends improvements in ad delivery. Our
cost is invoked to explain this relative coarseness. My two essays show that focus is on improving two levers—spacing between ads and the duration of each
reference-dependent preferences provide a more robust, parsimonious ad. The performance of our optimization procedure is compared with standard
explanation. In Essay 1, I examine class pricing, which “divides a large set of practice and other ad delivery heuristics, and the implications of our findings are
goods or service into [a smaller number of] classes, and assign a single price to discussed.
any element of a class” (Wernerfelt, 2008), even when the costs and demands of
the individual items are self-evidently quite different. Wernerfelt (2008) invokes 3 - Focused Concept Miner(FCM): an Interpretable End-to-End
costly price setting activities (e.g., printing price labels, etc.) as the friction-based Deep Learning Approach to Mine Text for Prescriptive
explanation. However, class prices are still observed in settings where such Policy Exploration
frictions are much smaller (e.g., online). I model a firm selling multiple products Dokyun Lee, Carnegie Mellon University, 5000 Forbes Avenue,
to a continuum of heterogeneous consumers, and extend Koszegi and Rabin Posner Hall, Room 348E, Pittsburgh, PA, 15213, United States,
(2006)’s framework to depict customers’ credible reference beliefs as dokyun@cmu.edu, Emaad Ahmed Manzoor, Zhaoqi Cheng
endogenously determined via matching their optimal choices to their expectations
about consumption outcomes. Class pricing emerges when there are relatively We introduce the Focused Concept Miner (FCM), an interpretable end-to-end
small gaps in consumers’ tastes across the individual products and relatively small deep learning based text mining algorithm to (1) automatically extract
differences in products’ marginal costs, both of which are typical features of many interpretable “concepts” from text data, (2) “focus” the mined concepts to explain
product categories with large numbers of SKUs. Also, lower-end products tend to any user-provided business outcome, such as purchase conversion or project
be aggregated into larger sized classes, and the upper bound of numbers of classes success, and (3) quantify the relative importance of each mined concept for the
decreases in consumers’ loss aversion, but increases in quality gaps. business outcome, along with their relative importance to other user-derived
explanatory variables. We build into the algorithm an easy way for managers to
interpret extracted concepts to draw actionable insights or to inform prescriptive
Thursday, 1:30PM - 3:00PM

policy strategies. Applications can be found in any settings with text and
structured data tied to a business outcome of interest. For example, consumer
browsing behavior and review reading behavior connected to purchase
conversion, or project management emails and minutes connected to project
success or failure. To demonstrate the efficacy of our algorithm, we evaluate its
n TC01 performance on two proprietary datasets: (1) product reviews and purchase
outcomes obtained from a leading review platform, and (2) project management
Room 32, Alter Hall data and success outcomes from a Fortune 500 pharmaceutical company. We
Machine Learning and Marketing discuss managerial implications and future development ideas.
General Session
Chair: Eric Schwartz, University of Michigan, Ann Arbor, MI, 48109-
1234, United States, ericmsch@umich.edu
1 - Bandit Adaptive MaxDiff: Cost-Effective Scalable Idea Screening
Eric Schwartz, University of Michigan, Ann Arbor, MI, 48109-
1234, United States, ericmsch@umich.edu, Alexander Zaitzeff,
Kenneth Fairchild, Bryan Orme
Marketing research often measures consumers’ preferences in order to identify
their most preferred items among a set of candidates, such as product benefits,
innovative features, or message appeals. Common techniques are idea screening,
including conjoint analysis and maximum-difference (MaxDiff) scaling. These
methods, however, are not built for large-scale problems. For large MaxDiff
studies whose main purpose is identifying the top few items for the respondent
19
TC02 INFORMS MARKETING SCIENCE – 2018
n TC02
product categories. Review content information has a higher impact on sales
when the average rating is higher and the variance of ratings is lower. Consumers
depend more on review content when the market is more competitive, immature,
Room 33, Alter Hall or when brand information is not easily accessible. A counterfactual simulation
Digital Economy III: Reviews and Reputation suggests that re-ordering reviews based on content can have the same effect as a
1.6% price cut for boosting conversion.
General Session
4 - Consumer Reviews and Regulation: Evidence from
Chair: Georgios Zervas, Boston University, Boston, MA, United States, NYC Restaurants
zg@bu.edu Georgios Zervas, Boston University School of Management,
1 - Does Occupational Licensing Matter in an Online World? Boston, MA, United States, zg@cs.yale.edu, Chiara Farronato
Andrey Fradkin, Massachusetts Institute of Technology,
We investigate complementarities between two signals of restaurant quality:
179 Prospect Street, Cambridge, MA, 02139, United States, health inspections and online reviews. To protect consumers, health inspectors
Afradkin@gmail.com, Chiara Farronato, Erik Brynjolfsson periodically evaluate restaurant hygiene, and assign health grades to restaurants.
This paper examines how consumers’ choices of service professionals are related Consumers are also able to rate restaurant quality online, through review
to the occupational licensing status of service providers. The setting is a large, US platforms like Yelp. We investigate whether consumer reviews can predict
online labor market platform, where professional service providers bid on hygiene violations. To do so, we implement we use machine learning to predict
consumers’ projects. We outline an econometric approach to estimate the causal individual restaurant violations from the text of Yelp reviews. We find that
effect of a professional’s licensing status and reputation on the consumer’s choice consumer reviews are good predictors of food handling violations, but are poor
of whom to hire. Our findings suggest that a professional’s digital reputation predictors of facilities and maintenance violations. We then investigate how the
matters more than the professional’s licensing status for customer choice. We also hygienic information contained in online reviews affects demand and supply. On
study the market wide effects of occupational licensing stringency on competition the demand side, we find that conditional on hygiene related information
and service quality. contained in online reviews, consumers still take health grades into account when
choosing restaurants. On the supply side, we find that review platforms create
2 - Revealed Preference Heterogeneity Through Online Ratings reputational incentives for restaurants to reduce hygiene violations that are
Brett Hollenbeck, University of California-Los Angeles Anderson, predictable by Yelp reviews. Specifically, we find that relative to restaurants not
1317 S Westgate Avenue, Apt 204, Los Angeles, CA, 90025, on Yelp, restaurants on Yelp score better on hygiene dimensions detectable by
United States, brett.hollenbeck@gmail.com, Yufeng Huang consumers than on dimensions not detectable by consumers. Our results have
implications for the design of government regulation in a world where consumers
Consumers often rely on product reviews to make purchase decisions, but how rate their service experiences online.
consumers use review content in their decision making has remained a black box.
In the past, extracting information from product reviews has been a labor
intensive process that has restricted studies on this topic to single product
categories or those limited to summary statistics such as volume, valence, and n TC03
ratings. This paper uses deep learning natural language processing techniques to
overcome the limitations of manual information extraction and shed light into Room 34, Alter Hall
the black box of how consumers use review content. With the help of a
comprehensive dataset that tracks individual-level review reading, search, as well When Fashion Meets Marketing Science
as purchase behaviors on an e-commerce portal, we extract six quality and price General Session
content dimensions from over 500,000 reviews, covering nearly 600 product
categories. The scale, scope, and precision of such a study would have been Chair: Yu-San Lin, Penn State University, University Park, PA, 16802,
impractical using human coders or classical machine learning models. We achieve United States, yusan@psu.edu
two objectives. First, we describe consumers’ review content reading behaviors.
Co-Chair: Tavy Ronen, Rutgers University, Bridgeton, NJ, United States,
We find that although consumers do not read review content all the time, they do
rely on review content for products that are expensive or of uncertain quality. tronen@gmail.com
Second, we quantify the causal impact of content information of read reviews on Co-Chair: Tawei (David) Wang, DePaul University, Chicago, IL, 60604,
sales. We use a regression discontinuity in time design and leverage the variation United States, david.wang@depaul.edu
in the review content seen by consumers due to newly added reviews. To extract
content information, we develop two deep learning models: a full deep learning 1 - The Role of Imagery in Equity Crowdfunding
model that predicts conversion directly and a partial deep learning model that Yusan Lin, Penn State University, State College, PA, United States,
identifies content dimensions. Across both models, we find that aesthetics and yusan@psu.edu, Miwako Nitani, Tavy Ronen, Tawei Wang
price content in the reviews significantly affect conversion across almost all
This paper examines the role of imagery in crowdfunding from 2014-2016. While
product categories. Review content information has a higher impact on sales
previous papers have documented the correlation between entrepreneurs’ social
when the average rating is higher and the variance of ratings is lower. Consumers
networks and the probability of campaign success, the underlying mechanism has
depend more on review content when the market is more competitive, immature,
not been fully investigated. This paper addresses this gap in the literature by
or when brand information is not easily accessible. A counterfactual simulation
exploring the role of images originating from social media networks in
suggests that re-ordering reviews based on content can have the same effect as a
crowdfunding campaigns. We focus on fashion and beauty related companies and
1.6% price cut for boosting conversion.
argue that the probability of campaign success depending on reliable imagery. By
3 - Large-Scale Cross-Category Analysis of Consumer Review leveraging deep learning neural networks to understand the contents of imagery,
Content on Sales Conversion Leveraging Deep Learning we show that by transmitting reliable imagery regarding the main product line,
Xiao Liu, New York University, Stern School of Business, 44 W 4th fundraising campaigns on crowdfunding platforms are more likely to be
successful. Finally, we document how crowd investors interpret those signals and
Street, New York, NY, 10013, United States, xliu@stern.nyu.edu, use for their investment decisions.
Dokyun Lee, Kannan Srinivasan
2 - Social Competition of Fashion Brands on Instagram
Consumers often rely on product reviews to make purchase decisions, but how
consumers use review content in their decision making has remained a black box. Tawei (David) Wang, DePaul University, Chicago, IL, United States,
In the past, extracting information from product reviews has been a labor david.wang@depaul.edu, Yusan Lin
intensive process that has restricted studies on this topic to single product Since Instagram started its service about 7 years ago, it has been a popular social
categories or those limited to summary statistics such as volume, valence, and media outlet for all kinds of fashion brands. For instance, Nike, Victoria’s Secret,
ratings. This paper uses deep learning natural language processing techniques to H&M, and Louis Vuitton all have more than 20 million followers on Instagram in
overcome the limitations of manual information extraction and shed light into 2017. Another example, in the month before the London Fashion Week in 2016,
the black box of how consumers use review content. With the help of a there were more than 5,500 posts with #LFW2016 on Instagram compared to
comprehensive dataset that tracks individual-level review reading, search, as well only about 1,100 Twitter mentions in the same period. These pieces of anecdotal
as purchase behaviors on an e-commerce portal, we extract six quality and price evidence suggest that Instagram has become a crucial part of fashion brands’
content dimensions from over 500,000 reviews, covering nearly 600 product competing fields. In this study, we explore (1) the information posted by fashion
categories. The scale, scope, and precision of such a study would have been brands and (2) the competitive actions (both action timing and types of actions)
impractical using human coders or classical machine learning models. We achieve taken by fashion brands in the context of Instagram. We collected Instagram posts
two objectives. First, we describe consumers’ review content reading behaviors. by 480 fashion companies across a two-year period, and find that the more
We find that although consumers do not read review content all the time, they do consumers two fashion companies share, the more frequently they take actions to
rely on review content for products that are expensive or of uncertain quality. respond each other’s signals. Our preliminary findings would sketch the
Second, we quantify the causal impact of content information of read reviews on competitive landscape on Instagram for fashion brands and provide managerial
sales. We use a regression discontinuity in time design and leverage the variation implications when forming social media strategies.
in the review content seen by consumers due to newly added reviews. To extract
content information, we develop two deep learning models: a full deep learning
model that predicts conversion directly and a partial deep learning model that
identifies content dimensions. Across both models, we find that aesthetics and
price content in the reviews significantly affect conversion across almost all
20

3 - A Recurrent Neural Net for Modeling Dependency in 2 - The Summarization of Creative Content
Instagram Images Olivier Toubia, Columbia Business School, 3022 Broadway, Room
Ashwin Malshe, University of Texas at San Antonio, 1 UTSA 522, New York, NY, 10027, United States, otoubia@yahoo.com
Circle, Suite BB 4.06.20, San Antonio, TX, 78249, United States, We develop a topic model that quantifies how humans summarize creative
ashwin.malshe@utsa.edu, Yu-San Lin documents (e.g., from movie scripts to synopses). Our topic model, inspired by
The last decade witnessed a rapid emergence of image sharing platforms such as the creativity literature, relies on Poisson Factorization to link the text in a
Instagram as essential social networks for luxury and fashion brands. A key summary to the text in the original document, in any domain of interest.
challenge for these brands is to choose images for a fixed-duration campaign (e.g., Traditional Poisson Factorization approximates documents as positive
a week) so as to maximize customer engagement (e.g., likes and comments). Prior combinations of topics, i.e., as points in the cone defined by a set of topics (in the
literature in computer vision has attempted to predict number of likes for an Euclidean space defined by the words in the vocabulary). Our model captures not
image using convolutional neural net. However, these models don’t apply well to only this “inside the cone” portion of a document, but also the “outside the cone”
Instagram campaigns because consumers evaluate images in the context of portion that is not explained by a combination of common topics. The model
the entire campaign rather than in isolation. In this research, we build upon captures how these two types of content are weighed in summaries as compared
recent advances in recurrent neural nets and model Instagram campaigns as a to full documents. In addition, it captures writing norms that influence the extent
sequence of interconnected images. We train the model on thousands of to which each topic appears in summaries compared to full documents in the
Instagram images pertaining to 15 luxury brands. We compare the results of our domain of interest. We apply this model to a dataset of marketing academic
model to that of existing models and find that our model has a superior prediction papers and their abstracts, and to a dataset of movie scripts and their synopses.
performance. An important managerial implication is that luxury brands can use We illustrate a practical application of our research by creating a public, online
an automated image selection tool based on our model. interactive tool meant to assist users interested in writing summaries of creative
documents.
4 - Personalized Garment Recommendations via Heterogeneous
Traits Inferred Fashion 3 - Temporal Sequencing of Ads in Mobile In-App Advertising
Julian Eison, Eisonomics, San Francisco, CA, United States, Omid Rafieian, University of Washington, Seattle, WA,
jeison@eisonomics.com, Yusan Lin United States, rafieian@uw.edu, Hema Yoganarasimhan
Personalized recommendation has been a highly demanded and broadly studied Mobile in-app advertising is now a major source of revenue for many app
topic in e-commerce, in particular the fashion retail industry. However, common developers. In this paper, we focus on a unique aspect of in-app advertising —
approaches of personalized recommendations made by retailers have been heavily sequential ad placement. In this form of advertising, users are exposed to a
relying on internal information such as customers’ browsing and purchase sequence of potentially different ads within a session. This gives rise to a series of
history. Such approach often suffers from data sparsity, and leads to undesirable questions related to the effects of temporal sequencing of ads. We use data from
recommendations. In this work, we connect individuals tastes in fashion and the leading in-app ad-network of an Asian country to answer these questions. A
other external information and preferences to conduct a new personalized unique feature of our data is the use of probabilistic auction for ad placement that
garment recommendation system, which is deployed on a premium made-to- has created great variation in the sequence of ads users are exposed to within the
measure platform. In particular, we leverage the individuals’ demographic session. We find that when exposed to a higher variety of previous ads, users are
information and their music preferences. Through A/B testing, we find that our more likely to click on the subsequent ad. This finding is in line with behavioral
proposed approach outperforms recommendation without external information. literature on categorization. However, we also show that such strategies for
We also leverage the system to find unexpected correlation between different temporal sequencing of ads can negatively affect app usage, leading to a challenge
traits of tastes. for publishers when deciding to allocate their ad inventory. Given the detailed set
of covariates in our data, we address this issue by obtaining personalized estimates
of the effect for each individual using Generalized Random Forest. We show that
the percentage of population for whom the conflicting effect exists amounts to a
n TC04 negligible portion of the total population. Finally, we propose an adaptive
framework based on Causal Forests that helps publishers make real-time
Room 35, Alter Hall decisions.
Machine Learning Applications in Marketing: I 4 - Product Return Management in Omnichannel Retail:
General Session Predicting Return Rates from Product Images
Chair: Daria Dzyabura, NYU Stern School of Business, New York, NY,
Chair: Daria Dzyabura, MIT, Cambridge, MA, 02142, United States, ddzyabur@stern.nyu.edu, Marat Ibragimov, Siham El Kihal
ddzyabur@stern.nyu.edu
Most omnichannel retailers sell all products online and only a subset offline due
1 - Combining Machine Learning and Human Judgment to Identify
to space constraints associated with the offline channel. However, selling all
Customer Needs—New Tests and Applications products online might be suboptimal since many products have high return rates
Artem Timoshenko, PhD in Marketing Student, and result in net loss to the firm (~18% in our data), due to return costs. The
MIT Sloan School of Management, Cambridge, MA, United States, question that remains unresolved in omnichannel retail is therefore: which
timoshenko.artem@gmail.com, John R. Hauser products should be sold via which channel? Based on the sales and return data of
a large European apparel brand in the online and offline channels, we use the
We build on our earlier research on identifying the abstract context-dependent
product images to train machine learning models to predict demand, in both
customer needs from user-generated content (UGC), such as online reviews,
channels, as well as returns, for completely new products. We demonstrate that
social media and call-center data. Traditional methods for identifying customer
first, consumers purchase different products online and offline, such that some
needs are neither efficient nor effective when applied to large UGC corpora
products attain higher market shares online than offline. Second, we find that
because much content is non-informative and repetitive. We combined machine
items more likely to be returned are those that sell more online and less offline.
learning to select the efficient content for review and human judgement to
This finding suggests that, when shopping online, consumers make their purchase
formulate customer needs. We evaluated the approach using a custom dataset
decision based on their online evaluation of the product. Once they receive the
matching Amazon reviews for oral care products to the customer needs identified
product, they rely on their offline evaluation of the product to decide whether to
from the experiential interviews by professional analysts. We showed that (1)
keep or return it. Third, we demonstrate that images considerably improve
Amazon reviews are at least as valuable as a source of customer needs for product
predictions of product returns rates. Using our models, retailers are able to decide
development as the conventional methods, and (2) machine-learning methods
on which products should be sold via which channel to generate large demand,
improve efficiency of identifying customer needs from UGC. This research extends
and also identify which products will be unprofitable if placed in the online
earlier work by examining the ability to identify rarely mentioned customer needs
channel, due to product returns.
(often called unarticulated needs). We test whether frequency counts and
helpfulness scores help identify important customer needs and/or unarticulated
needs. We examine the feasibility of using Amazon Mechanical Turk to train the
machine-learning algorithm, and we describe industry’s applications of our
methods to new product categories beyond those tested in our paper.
21
n TC05
currently employed by Automotive Lubricant companies in India. This research is
exploratory in nature and its scope is to find out the existing process of devising
an integrated marketing communication channel strategy currently in practice by
Room 232, Alter Hall Indian Automotive Lubricant companies. The question broadens its scope to
Panel Discussion on Digital Marketing Applications of understand the selection of the available mediums currently employed by
AI and Deep Learning III Automotive Lubricant Companies.Qualitative Research Method involving Case
Study Method have been used to address the subject. The question broadens its
Invited Session scope to understand the selection of the available mediums currently employed
1 - Panel Discussion on Digital Marketing Applications of AI and by Automotive Lubricant Companies. The two major steps for the data analysis in
this research include Within Case Analysis and Multi Case Analysis.The data
Deep Learning III analysis using grounded theory has been done involving several iterations
Moderator: Xueming Luo, Temple University, 1801 Liacouras between interview data, existing theory and observation data.In the multi case
Walk, Philadelphia, PA, 19122, United States, luoxm@temple.edu analysis, replication logic is used. This analysis is done to seek comparison and
AI and DL algorithms will leverage big and rich data like sentiment, image, video, explain common, different and complimenting findings in the study of channel
and diverse subtleties of human interactions in one end-to-end process, not selection mechanism of marketing communication by automotive lubricant
captured by traditional marketing. Empowered by deep neural networks, new companies in India. The findings across cases are integrated to form common
marketing applications in the industry are astonishing (academic works are analysis background. Five relevant stages have been found from the empirical
lacking): smart chatbots with personality, consumer classification and unmet data in this research study which includes the new dimensions under which the
needs detection, user preference discovery and recommendation, social semantics processes were carried out.
and personalized content curation, digital fraud and data breaches prevention, 3 - Intra-firm and Inter-firm Spillover Effects in Display
intelligent customer service and ad targeting, omnichannel marketing and
Advertising:implications for Multi-brand Portfolio Firms
Lin Boldt, Clark University, 950 Main Street, Worcester, MA,
Panelists 01610, United States, lboldt@clarku.edu, Neeraj Arora
Oded Netzer, Columbia Business School, New York, NY, 1027, Advertising spillover effect refers to the phenomenon that the advertising of one
United States, onetzer@gsb.columbia.edu brand could not only benefit brand being advertised, but also increase demand for
Arun Sundararajan, New York University, Stern School of Business other brands. In this paper, we examine the spillover effect of online display
Info Sys Dept, 44 West 4th Street KMC 8-93, New York, NY, advertising for firms that own a portfolio of brands in a category. First, who
10012, United States, arun@stern.nyu.edu benefits from online display advertising? The advertising brand? The other brands
in the firm’s portfolio? Or the brands from a competing firm? Second, how should
Avi Goldfarb, University of Toronto, Rotman School of a multi-brand firm accurately attribute the effect of each brand’s advertising and
Management, 105 St George Street, Toronto, ON, M5S 3E6, optimally allocate the advertising budget across a portfolio of brands? Third, what
Canada, avi.goldfarb@rotman.utoronto.ca are the moderators of spillover effects? In particular, we focus on intra-firm and
Kannan Srinivasan, Carnegie Mellon University, Pittsburgh, PA, inter-firm product feature and price similarity. We address the questions using a
15213, United States, kannans@andrew.cmu.edu unique household-level panel data, which include each household’s exposure to
randomized display ads from multiple advertisers on media websites and the
Daria Dzyabura, New York University, 44 West 4th Street, household’s browsing behavior on e-commerce websites. Our findings contribute
Tisch Hall, New York, NY, 10012, United States, to the literature in the following ways. First, we provide evidence of the display
ddzyabur@stern.nyu.edu advertising effect not only on the advertised brand, but also on the other brands
in the firm’s portfolio and competing brands offered by other firms. Second, we
propose an attribution and allocation strategy for multi-brand companies in the
n TC06 face of the intra-firm and inter-firm advertising spillover effect. Third, this paper is
the first in the literature to understand the role of feature similarity and price
Room 234, Alter Hall similarity on the advertising spillover effect for a multi-brand firm. Our proposed
framework provides guidance for multi-brand companies on how best to spread
Advertising Strategies its advertising dollars across the brands in its portfolio.
Contributed Session 4 - The Debate over Loyalty Program Performance: Identifying
Chair: Sreyaa Guha, IE Business School, IE University, Calle Maria De Factors that Drive Success of Coalition Loyalty Programs
Molina 12, Madrid, 28004, Spain, sreyaa.guha@student.ie.edu Sreyaa Guha, PhD Candidate, IE Business School, IE University,
Calle Maria De Molina 12, Madrid, 28006, Spain,
1 - Using Advertising Disclosure Choices to Predict Firm sreyaa.guha@student.ie.edu, Shameek Sinha
Demand Evolution
Simone Wies, Goethe University Frankfurt, Theodor-W-Adorno Loyalty programs are valuable relationship building tools, especially since the
Platz 3, Frankfurt, 60323, Germany, wies@econ.uni-frankfurt.de associated customer datasets can be used for targeted marketing. However, the
performance of standalone loyalty programs is debatable with issues of self-
Firms have considerable leeway in deciding whether they report advertising selection, competition and diverse customer requirements. Coalition loyalty
expenses or not. We argue that the reporting of advertising expenses can reveal a programs with extensive category partnerships, variety of rewards and enhanced
firm’s expected demand evolution. Specifically, we theorize that firms might stop customer experience provide a viable alternative. In this research we analyze
disclosing advertising spending when they seek to disguise reduced demand for its strategic dimensions of customer involvement in such programs and identify
products. That is, if the firm sees its demand eroding, it might boost advertising tactical drivers, which if implemented, facilitates program success. The three
spending in an effort to buffer demand shortcomings. We also examine whether strategic behavioral metrics we analyzed were transactions with partners across
investors understand these motivations and interpret ceased advertising disclosure categories, responses to promotional campaigns and redemption of rewards. With
as a firm’s signal of despair to secure sales. To test our predictions, we estimate access to an unique customer panel from a coalition loyalty program, we used
forecasting models for size-adjusted advertising series to identify the difference panel estimation techniques on euros spend on transactions and points used for
between actual and expected advertising levels and to determine whether the redemptions (continuous) and choice of store format in transactions, choice of
firm reports above- or below-normal advertising. We then link the firm’s channels for reward redemptions, choice of response mode in campaign responses
reporting choice and advertising deviations to actual and future performance. and likelihood of campaign impact (discrete) to investigate the tactical drivers that
Using both an event study and a calendar time portfolio approach, we finally test increase customer involvement. We find that not only managing the point offers
to which extent the stock market understands and assesses the signal of demand on transactions and reward offers for redemptions are critical, but also
evolution. Our study contributes to the ongoing discourse of whether and how to understanding the customer profile plays an important role. Promotional
report marketing investments, and outlines how advertising reporting can serve strategies and their timing need consideration. Firms should analyze the partners
as (unintentional) signal of a firm’s demand evolution. and channels where customers transact, respond and redeem. The managerial
insights from this research will help firms efficiently retain and acquire customers
2 - Integrated Marketing Channel Selection Mechanism of under coalition loyalty programs. This research also provides theoretical support
Automotive Lubricant Industry in India- An Exploratory Study for investigating all three behavioral metrics simultaneously.
Meenakshi Tomar, O P Jindal Global University, Sonepat Narela
Highway, Village:Jagdishpur, Sonepat, 131001, India,
mtomar@jgu.edu.in
In Indian context the Automotive Lubricant Marketers have been relying on
traditional mediums for promotional aspects, creating awareness, building brands
and approaching new markets. They now need to study the modern mechanism
used by people in their daily lives to communicate with each other. The
Automotive Lubricant companies in India continue to witness a static growth
which has proved to be a hurdle to increase their market share because of their
reliability on traditional mediums. Therefore an attempt has been made to arrive
at the channel selection mechanism of Integrated Marketing Communications
22
n TC07
that specializes in second-hand property trading. An agent network is formed
around a specific property that includes multiple agents of different roles on the
homeowner side and multiple agents of different roles on the homebuyer side.
Room 237, Alter Hall The structure of the agent network is dynamic, constantly changing with the
Sales & Salesforce Management I arrival of a new potential buyer and her associated agents. To overcome the
endogeneity concern that is typical of agent network formation, we take
Contributed Session advantage of the real estate platform’s special policy and the exogenous arrival of
Chair: Junhong Chu, National University of Singapore, Nus Business property buyers. Lianjia has been practicing the “gong-fang-si-ke” (“public-
School, 15 Kent Ridge Drive, Singapore, 119245, Singapore, property-private-customer”) policy that stipulates (1) all properties, regardless
how they are acquired and who acquires them, are the company’s public
bizcj@nus.edu.sg resources (or “commons”) and managed by the specific trading zone’s storefront
1 - Free Riding Effect Between Sales People in Adoption of a and can be accessed by all buyers’ agents, and (2) a property buyer is the private
Complex New Product customer of the agent who acquires the buyer. Both the arrival of a property
Vahideh Sadat Abedi, Cal State Fullerton, 3099 W Chapman Ave, buyer and her preferred location for a property are exogenous to Lianjia and its
Apt 259, Orange, CA, 92868, United States, vabedi@fullerton.edu, agents, which help generate exogenous agent networks. Further, the same agent
Rahul Bhaskar can play different roles in different properties acting on both the buyers and the
homeowners. These special data structure and institutional arrangements enable
Purchase of complex new products (e.g. insurance plans) typically depends on us to separately measure the effects of agent network structure, different agent
both customer word-of-mouth about the product and about the service offering roles, and each agent on the outcomes of a property, and identify the optimal
brokers. We show that this leads to a free-riding effect between the brokers. We agent network size to maximize the sales outcome.
model this sales process, and validate it from data for an insurance product. We
measure the free-riding effect, and show how the resulting model can facilitate
decision making in managing the sales force.
2 - Effect of Sales Momentum on Salesperson Performance
n TC08
Irene Nahm, Doctoral Student, University of Houston, Room 238, Alter Hall
4750 Calhoun Road, Houston, TX, 77204, United States, CB - Time, Tourism & Culture
iynahm@uh.edu, Michael Ahearne, Seshadri N Tirunillai, Nick Lee
Contributed Session
Inside sales force are agents that mostly reach customers remotely, usually aided
by technology. This research examines the role of momentum in managing Chair: Ozum Zor, Rutgers Business School, Piscataway Township, NJ,
individual sales performance for inside sales force. We argue that salesperson 0885, United States, ozum.zor@rutgers.edu
experience periods of increased (or decreased) performance, when compared with
1 - Time Use and Purchase Behavior
their expected performance. We refer to this short-term persistence in a
salesperson’s performance as (sales) momentum. We examine momentum using a Yan Xu, Assistant Professor, The Hong Kong Polytechnic
novel, high-frequency transactional dataset from a large European call-center University, Hong Kong, China, yan-xy.xu@polyu.edu.hk,
firm. The results provide a strong evidence for the existence of momentum and Bart Bronnenberg, Tobias Klein
indicate that momentum is not an inherent trait of a salesperson that makes a Consuming goods not only costs money to buy market goods, but also time spent
specific salesperson prone to clumps of successful (or failed) outcomes. Rather, on home production broadly defined, i.e., on shopping, evaluating products,
momentum is a state some salespeople transition into under appropriate preparing meals, and consumption. Consequently, time availability affects how a
conditions. We also examine how momentum influence individual salesperson’s household uses the market and which bundle of market goods it chooses. Using a
performance over time and how social factors moderate this relationship. We unique individual level data set combining purchase records, household
exploit the variation across the two call-center locations to understand the characteristics, and home production preferences, this paper studies how
importance of social factors in sustaining the momentum in sales performance plausibly exogenous shocks on time-availability impact purchasing behavior. We
and find that accounting for both social effects and momentum is important in classify a subset of products according to the time it takes to turn them into
explaining salesperson performance. The results suggest an asymmetry in the consumption experiences. Controlling for household fixed effects, we show that
influence of social factors on momentum. While social factor has a strong increases in the availability of time from, e.g., retirement lead to more shopping
influence in negative momentum, it does not help sustain positive momentum. trips, a more diverse set of stores, more overall spending on groceries, and more
These findings suggest that managers can enhance salesperson performance by variety purchased. In line with our main hypothesis, time availability also shifts a
detecting momentum. Further, managers could significantly alter the win rates by household’s shopping bundle into more time-intensive goods. Therefore, it is
using timely intervention to break the negative momentum of a salesperson. important to account for the availability of time when analyzing consumer
3 - A Holistic View of Sales Effectiveness an Empirical Investigation purchase behaviors. Firms can make their products attractive to the consumer not
Srinath Gopalakrishna, Professor of Marketing, University of only by lowering the price but also by making products more convenient to use.
Missouri, Trulaske Sr. College of Business, 434 Cornell Hall, 2 - The Impact of Inbound Tourist Lifestyles on Travel Behaviors
Columbia, MO, 65211, United States, srinath@missouri.edu, Yusuf Erkaya, International Burch University, Sarajevo,
Ashutosh R Patil, Andrew Crecelius Bosnia and Herzegovina, yusuf.erkaya.yusuf@gmail.com,
Researchers and practitioners agree that customer acquisition and retention are Teoman Duman, Omer Topaloglu
critical aspects of sales success. Salespeople spend considerable time across these Despite the fact that understanding tourist motivations and lifestyles is important
two activities which are respectively known as “hunting” and “farming” in the in devising marketing strategies for tourism service providers, research in these
sales literature. There is general agreement that the effectiveness with which each areas with respect to inbound tourism is very limited. Overwhelming majority of
activity is performed varies considerably across salespeople. Some are better at recent research studies on tourist motivation, lifestyles, and behavior have
acquisition, others are better at retention, while still others are effective at both focused on demand for mass tourism vacations. Relying on the lifestyle theory,
activities. We develop a composite sales effectiveness metric and undertake a this paper focuses on inbound tourism where local and regional tourism activities
systematic empirical investigation of the drivers of each component as well as the have been analyzed to formulate marketing strategies for tourism service
drivers of overall sales effectiveness. We find that such an investigation that providers based on an investigation of inbound tourists’ motivations and
examines the comprehensive effectiveness at both these activities is missing in lifestyles. Data for this study include 575 self-administered surveys completed by
extant literature. Based on reviewing relevant theories, we develop a bivariate inbound tourists in Vienna, Austria. Austrian inbound tourism provides a typical
model of hunting and farming effectiveness. We propose and test several context that is present in few European destinations. As an inbound tourism
hypotheses involving the drivers - notably we consider impersonal destination, Austria serves as an ideal setting because of its location and its ability
communication, operationalized by advertising spending and personal contact, to satisfy various types of touristic motivations, such as historic, family, summer
operationalized by number of customer service personnel. We assess the impact of vacation, etc. The data is analyzed by structural equation modeling. The results
these two variables, among others, and highlight the trade-off that occurs reveal twelve main types of tourists in the inbound tourism sector. Local food and
between these two activities as salespeople balance acquisition and retention local life-motivated tourists emerged as the most prevalent tourist types. Besides,
efforts. We offer several managerial implications from our research that can help relaxation-pleasure seeking, romance seeking, novelty-adventure seeking, and
managers understand the impact of salesperson, territory, and marketing variables peer acceptance seeking are the other four most dominant types of tourists. In
on hunting, farming and overall sales effectiveness and offers some insights into addition, this study shows that the motivational lifestyle characteristics depend on
how they can deploy resources in an effective manner. travel frequency, household income, time spent for travel, the latest vacation,
4 - Agent Network Structure and Performance in the Second-hand average vacation period, accommodation preferences as well as demographic
characteristics of inbound tourists. Managerial and theoretical implications of the
Property Market findings are discussed.
Junhong Chu, National University of Singapore, Nus Business
School, 15 Kent Ridge Drive, Singapore, 119245, Singapore,
bizcj@nus.edu.sg, Xianling Yang, Li Wang
We study how agent network structure affects the outcomes of second-hand
properties, including the probability to sell, time on market, and sale price, using
proprietary data from Lianjia, one of China’s largest real estate platform agencies
23

3 - National Culture and Consumption of Technological Products: 2 - Does the Secondary Market Foster Biases in
A Meta-analytical Review Purchase Behaviors?
Bipul Kumar, Assistant Professor, Indian Institute of Management Adithya Pattabhiramaiah, Assistant Professor of Marketing,
Indore, Prabandh Shikhar, Rau-Pithampur Road, Indore, 453556, Georgia Institute of Technology, Scheller College of Business,
India, bipulk@iimidr.ac.in, Ajay K Manrai, Lalita A. Manrai 800 West Peachtree Street NW, Atlanta, GA, 30308, United States,
This papers discusses the role of national culture on consumption of technological adithyap@gatech.edu, Cheng He, Necati Tereyagoglu
products. Using Hofstede’s cultural dimensions and drawing from the literature on In this paper, we leverage detailed transaction data from the Collegiate Athletics
consumer behavior for technological products, the study develops a marketplace and combine them with ticket resale activities on the secondary
comprehensive framework that elaborates the antecedents of consumption of market (such as StubHub) to document how losses incurred from ticket resale on
technological products under the influence of various mediating and moderating the secondary market can lead to suboptimal re-purchase behaviors in the
variables. The proposed framework shows that the various dimensions of national following season. Our data span both season and individual-game ticket
culture such as Individualism-Collectivism dimension has moderating effect on purchases. We utilize a unique aspect of the firm’s pricing strategy wherein it
the consumption of technological products. The study also proposes that in requires a mandatory donation (in support of the University’s Athletics program)
individualistic societies, there is higher preference for technological products and for season ticket purchases in certain sections of the stadium, but not for
members of these societies may chose products which are technically individual-game ticket purchases. Our primary objective is to - a) document the
sophisticated in nature. Such findings are in line with their cultural preference for impact of possible gains/losses incurred during ticket resale on ticket (re)purchase
independent and achievement oriented motivation. Next, we tested the proposed activities (and consequently ticket revenues) for the University’s football games,
framework using a meta-analytic approach. We also meta-analytically tested the and b) characterize the extent of heterogeneity in this impact, with a view of
effect of mediators and moderators. After an extensive literature search based on offering implications for the firm’s pricing decisions.
multiple selection criteria, we use data from 41 independent research studies to
test hypotheses. To the best of our knowledge, this study is first of its kind to 3 - Price Response in Multiple-item Choice: Spillover Effects of
provide a holistic framework on the subject, thus contributing to the literature. Reference Price
This study also has some important implications for marketers. It concludes that Kyuseop Kwak, University of Technology Sydney, Marketing DG,
the cultural factors signal characteristically different line of approach for UTS Business School, P.O. Box 123, Broadway NSW, 2007,
marketers to respond to the needs of the consumers belonging to a particular Australia, kyuseop.kwak@uts.edu.au, Sri Devi Duvvuri,
cultural setting. Gary J. Russell
4 - Time-of-day Effects on Consumers’ Engagement on Social Media We develop a SKU level market basket model and apply the model to investigate
Ozum Zor, Doctoral Candidate, Rutgers Business School, Newark cross-category reference price effects. This research extends previous work on the
and New Brunswick, NJ, United States, ozum.zor@rutgers.edu, category-level multivariate logit model (Russell and Petersen 2000). Our model is
Kihyun Hannah Kim, Ashwani Monga a generalization of the multivariate logit model which allows for both
complementarity and substitution effects at the brand level. We use this model to
With the growing engagement of consumers on social media, marketers are investigate how consumers’ responses to reference prices within a category
increasingly concerned with the variables that determine such engagement. The spillover into their choices across multiple categories. The notion is that a
variable we examine is the time at which consumers engage with social media consumer’s subjective judgment of the fairness of the price levels in one category
during a given day (i.e., morning vs. evening). We show not only that time-of- influences the choice decisions of related items in other categories. We begin with
day has an influence, but that such influence depends on the social media content building within-category SKU-level model based on previous findings from single
that consumers engage with (i.e., virtue vs. vice). Our theory follows from the category reference price models (i.e., internal versus external reference prices,
literature of self-control, which suggests that self-control is strongest in the asymmetric response due to loss aversion, and heterogeneity in response across
morning, making it relatively easier to resist vices; but weakest in the evening, consumers). We then develop four alternative model specifications for cross-
making one succumb more easily to vices. Consequently, the release of social category spillover effects and test competing theories about those effects. Using
media content by marketers and the corresponding engagement of consumers scanner panel data for detergent and softener categories, we discover valuable
ought to follow a pattern: a shift away from virtue content and toward vice implications for reference price effects. First, SKU-level reference price effects
content as the day progresses. We observe such a pattern in data that we collected exist and improve forecasting ability. Second, those reference price effects
on Twitter for several virtue and vice magazines. To the best of our knowledge, influence category attractiveness, but do not spillover across categories.
this is the first research investigating this novel effect of time-of-day effects on
engagement with social media. Implications arise for marketers who, depending 4 - Segmenting Low Price Conscious and Discount
on the nature of the social media content, may want to release different content Conscious Consumers
at different times during the day. Ushio Dazai, Associate Professor, Fukuoka University, 8-19-1
Nanakuma, Jonan Ward, Fukuoka, 814-0180, Japan,
udazai@fukuoka-u.ac.jp
n TC09 In this exploratory study, the author tried identifying two price sensitive
segments, Discount-Conscious segment and Low-Price-Conscious segment.
Room 239, Alter Hall Previous research defines cherry pickers as those shoppers who visit a target
Price Perceptions retailer infrequently and move from one store to another. However, there is a
segment who visit a EDLP chain frequently and does not switch chains. There are
Contributed Session some previous researches focusing on Cherry-Picking or store choice behavior.
Chair: Ushio Dazai, Fukuoka University, 8-19-1 Nanakuma, Jonan However, these researches have a same limitation to using ID-POS data from one,
or a few stores (e.g., Bell, Ho, and Tang 1998; Fox and Hoch 2005; Leigh, George,
Ward, Fukuoka, 814-0180, Japan, udazai@fukuoka-u.ac.jp
and Chien 2009.) In this study, using single-source panel data of Japanese milk
1 - Reference Price Effects in Vacation Rental Markets category that is assumed to be a loss leader, the author calculated the discounts
Shrabastee Banerjee, PhD Candidate, Boston University, 595 and switching of brand and channel. For the purpose for identifying two
Commonwealth Avenue, Boston, MA, 02215, United States, segments, the author uses the average unit price and the standard deviation of
sban@bu.edu, Anita Rao, Georgios Zervas each individual. If the average unit price and standard deviation are both low,
these denote price-conscious consumers. If the average unit price is low and the
Do consumers respond to prices irrelevant to the purchase price? A large standard deviation is high, these denote discount-conscious consumers. Low-
literature on reference prices has shown this to be true in lab experiments. Price-Conscious consumer buys routinely from EDLP chains. A
However, measuring the effect of reference prices in the field is challenging Discount-Conscious consumer buys something when the price is lower than it
because consumers’ internal reference prices are not observable. We solve this normally is. Furthermore, the author discusses the demographic and
problem by exploiting the fact that travel websites often advertise a minimum psychographic characters of each of these segments. In addition, the author offers
price for each property. The minimum price can plausibly serve as a reference suggestions for future research on discounting and pricing.
price for consumers. Moreover, minimum prices have no direct bearing on the
price paid by the consumer. Using a panel dataset from Airbnb covering
approximately 17000 hosts, we investigate whether consumers respond to
minimum prices, and whether increases in minimum price result in more
bookings. Our preliminary results indicate that demand is positively correlated
with minimum price, suggesting that consumers use minimum prices reference
prices.
24
n TC10 n TC11
Corporate Social Responsibility I Digital Marketing III
Chair: Chandra Srivastava, University of Texas-Austin, 4711 Avenue G, Chair: Jungju Yu, Yale University SOM, 186 Edwards St, Apt 2r,
Austin, TX, 78751, United States, cnsrivastava@utexas.edu New Haven, CT, 06511-3780, United States, jungju.yu@yale.edu
1 - Forced to do Good: Economic Consequences of CSR Mandates 1 - On the Choice Between Open and Private Ad Exchanges in Online
Nandini Ramani, University of Texas-Austin, 800 West 38th Street, Display Advertising
Unit 4206, Austin, TX, 78705, United States, Amin Z Derakhshi, University of Washington, 840 E Denny Way
Nandini.Ramani@mccombs.utexas.edu, Raji Srinivasan Apt 206, Seattle, WA, 98122, United States, aminz@uw.edu,
While firms’ corporate social responsibility (CSR) initiatives are, for the most part, Amin Sayedi
voluntary and government intervention in CSR initiatives may seem antithetical, Display advertising impressions in real-time bidding are bought and sold in two
in an attempt to achieve inclusive development, some governments (e.g., China, types of marketplaces: open ad exchanges and private ad exchanges. An open ad
India, and the United Kingdom) are enacting policy to encourage firms to engage exchange is accessible to all advertisers and publishers who want to buy and sell
in CSR initiatives and even, going so far as to mandate firm CSR spending. A impressions. However, only a prescreened set of advertisers and publishers have
priori, it is not clear what the effects of such government intervention in CSR access to a private ad exchange. We investigate the pros and cons of the two ad
spending are on firm behavior and performance. Does government intervention exchange types and realize that open exchanges pose a bilateral adverse selection
in CSR spending alter a firm’s strategy? How can firms make strategic use of CSR problem, whereas private exchanges soften the competition among advertisers.
mandates? In this paper, we examine how firms can use marketing to strategically We identify the heterogeneity among advertisers and the heterogeneity among
improve their performance in the light of mandated CSR spending. Combining publishers as the two key market factors that could impact the choice of an ad
developments in stakeholder theory and agency theory, we hypothesize exchange type in equilibrium. We build a game-theoretic model to investigate the
heterogeneous effects of mandated CSR spending on firm performance based on strategies of vertically differentiated advertisers and publishers in the market. We
firms’ consumer orientation and ownership structure for two groups of firms - find that, in equilibrium, publishers set a relatively high reserve price in the
those who were already spending on CSR before the mandate, and those who are private exchange and sell an impression to the winner of an open exchange only
spending on CSR for the first time after the mandate. We exploit a 2013 CSR if the impression is left unsold in the private exchange. We also find that when
mandate in India which required some firms to spend two percent of profits on the heterogeneity among the publishers is high and that among the advertisers is
CSR to identify the effects of mandated CSR spending on performance. Our low, all advertisers bid in the open exchange. Conversely, when the heterogeneity
findings indicate that increasing CSR spending following the mandate improves among the publishers is low and that among the advertisers is high, different
performance for firms’ with high spending on advertising, R&D, and distribution. advertisers bid in different types of ad exchanges. Implications for the auditing
Further, increasing CSR spending following the mandate improves performance and monitoring practices in the display ad industry are discussed.
for firms belonging to business groups. Our findings suggest that marketing can
help firms strategically use mandated CSR spending to improve performance, and 2 - Can Bad-quality Images Lead to Greater Demand on Airbnb?
provide guidance to firms on optimal CSR and marketing spending levels to Nitin Mehta, University of Toronto, 105 St George Street, Room
maximize shareholder value. 5072, Rotman School of Management, Toronto, ON, M5S3E6,
Canada, nmehta@rotman.utoronto.ca, Shunyuan Zhang,
2 - Corporate Social Responsibility and Product Quality:
Param Vir Singh, Kannan Srinivasan
The Role of Social Comparison Effect
Moein Javadian, Rotman School of Management, This study answers the question of ‘Why are Airbnb hosts using low-quality
University of Toronto, Toronto, ON, Canada, property images?”. Existing studies on Airbnb show that high-quality images,
moein.javadian14@rotman.utoronto.ca compared to low-quality images, generate more demand for the Airbnb
properties. However, a large number of Airbnb hosts use low-quality images—
The genesis of CSR as an instrument to attract consumers and increase market even when Airbnb offered a professional photography program for free. This is
power has raised a question on how it interacts with conventional components of because high-quality images come with a risk of creating a high expectation on
marketing strategy. In particular, the relationship of product or service quality is the delivered lodging experience for the guests. As a result, high-quality images
critical because brand managers need to allocate limited resources across these increase the ‘gap’ between the images-induce expectation and the realization, and
two levers to optimize profitability. In a nutshell, it is critical for the manager to hence reduce the likelihood that a consumer leaves a review. High-quality
understand the relationship between CSR and quality in order to deliver the images, though boost demand in the short-run, may hurt hosts in the long-run, if
correct combination to the marketplace. CSR is not simply another dimension of the hosts cannot deliver a lodging experience that meets the expectation and
quality, but they differ in the sense that CSR can have a strong impact on a grow the reviews. Hence, a host may not want to have (free) high-quality images,
person’s image in social context. The extent to which social comparisons influence if his marginal cost of providing high-quality service (e.g., respond to guest
preferences for CSR is then controlled by consumption visibility. In this context, I promptly) is high. We build a structural model on both the demand and the
look at the impact of consumption visibility on the relation between CSR and supply side of the platform. On the demand side, leveraging GPU parallel
quality. More specifically, the question is whether quality and CSR are substitutes computing, we estimate a random-coefficient logit aggregated-demand model,
or complements when the strength of social comparison effect due to with heterogeneous consumers choose from over 2,000 differentiated lodging
consumption visibility is low or high. alternatives. On the supply side, we build a dynamic game model, with
heterogeneous Airbnb hosts dynamically choose the optimal quality of images
3 - Balancing Act: Effect of Female Power in the Top Management
and effort of service to maximize their expected long-term profits. Our analysis
Team on Investments in Marketing reveals interesting (reviews-induced) separating equilibrium, where hosts who
Chandra Srivastava, University of Texas at Austin, 4527 North are able (unable) to provide good lodging experience choose high-quality images
Lamar Blvd., Apt. 5139, Austin, TX, 78751, United States, and serve ‘high-type’ (‘low-type’) consumers. Counterfactual analysis
cnsrivastava@utexas.edu, Saim Kashmiri, Vijay Mahajan recommends an image program for Airbnb to improve the revenues. The
proposed policy outperforms Airbnb’s current photography program, by providing
A substantial body of work has illuminated the effect that marketing has on firm
images with medium quality to hosts who would use low-quality images under
performance. However, less research has investigated marketing’s antecedents
the current policy. The medium-quality images generate more demand for the
and what factors make firms more likely to invest in marketing in the first place.
hosts, without creating a big dissatisfaction.
The authors build on upper echelons theory and agency-communion theory to
hypothesize that gender balance in the top management team (TMT) positively
influences a firm’s attention to customer relationships and its investments in the
marketing function. A longitudinal analysis of 221 publicly traded U.S. Fortune
500 firms from 2007 to 2013 supports the authors’ hypotheses that a relative
increase in female power in the TMT is positively associated with CMO presence,
advertising intensity, and corporate social responsibility (CSR), and that
advertising intensity and CSR, in turn, mediate the positive relationship between
female power in the TMT and firm performance.
25

3 - The Optimal Targeted Advertising Throughout Consumer 2 - The Dark Side of Warranty Payments and Firm Value
Search Process Shuba Srinivasan, Adele and Norman Barron Professor of
Jiwoong Shin, Yale School of Mangement, 165 Whitney Avenue, Management, Questrom School of Business Boston University,
Room 5520, New Haven, CT, 06520, United States, 595 Commonwealth Ave, Boston, MA, 02215, United States,
jiwoong.shin@yale.edu, Jungju Yu ssrini@bu.edu, Didem Kurt, Ahmet Kurt, Koen Pauwels
We consider a new product category in which consumers are uncertain about The authors examine how the stock market reacts to unanticipated changes in
their valuation for the category, as well as each firm’s quality. Firms can send firms’ warranty payments. They propose two competing hypothesis: the customer
costly targeted advertising using consumer data. Consumers make inferences relationship management hypothesis and the product quality hypothesis. The
from advertising and decide whether to search across firms in the category. Each former argues that increasing warranty payments signal responsiveness to
firm can benefit from delivering an advertising at an initial stage as it makes the customers’ needs and claims, predicting a positive relation between warranty
firm prominent for the consumer. However, other firms in the category can free- payments and stock returns. The latter makes the opposite prediction by
ride on its efforts to help consumer learn about the category. In this paper, we highlighting that rising warranty payments may indicate product quality issues
investigate the optimal advertising strategy throughout the consumer journey. We and hidden operational problems. The authors also propose a contingency model
find that in a category whose valuation of consumers is large enough (mass of the warranty payment-stock return relationship and identify three important
product) high quality firms have more incentives to invest in advertising in the moderators: (1) marketing intensity, (2) research and development (R&D)
early stage. Otherwise, for a niche product category, low quality firms become intensity, and (3) financial leverage. Using a large, novel data set covering the
more invested. We identify the value of customer data to firms and examine period 2010-2016, the authors document a negative relation between
implications of targeting accuracy on firms’ advertising strategy and consumers unanticipated changes in warranty payments and stock returns, which is robust to
search. the use of an instrumental variable. This finding supports the product quality
hypothesis. The negative effect of increased warranty payments on stock returns
4 - A Model of Brand Architecture Choice: A Branded House decreases with an unanticipated rise in marketing spending, whereas it increases
vs a House of Brands with an unanticipated rise in R&D spending. A deterioration in financial flexibility
Jungju Yu, Yale University SOM, New Haven, CT, 06511-3780, as measured by an unanticipated increase in financial leverage also magnifies the
United States, jungju.yu@yale.edu adverse impact of increasing warranty payments on stock returns.
Some firms use the same brand (umbrella branding) for different product 3 - The Spillover Effect of Product Recalls on a Non-recalling
categories, while others use different brands (independent branding). In this Firm’s Financial Value
paper, we investigate for which product categories a firm should use the same or Dong Liu, University of South Florida, 4202 E Fowler Ave. BSN
different brands. To answer this question, we propose a framework of market-
3403, Tampa, FL, 33620, United States, dongliu@mail.usf.edu,
relatedness to characterize the relationship between product markets through
supply-side (similar production technology) and demand-side (similar target Sajeev Varki
customers). We apply this framework to a model of reputation in which a brand Although product recalls hurt the recalling firm’s revenue, market share, and
conveys information about both the firm’s unobserved capability type (adverse brand equity, little is known about how this hurts a non-recalling firm’s financial
selection), as well as its unobserved effort decision (moral hazard). We show that value (spillover effect). Drawing from assimilation-contrast theory, this paper
umbrella branding is optimal if the product markets are closely related on either examines the factors that affect the spillover effect on non-recalling firms’
supply-side or demand-side. However, we find that independent branding is financial value. Based on an analysis of auto recall data from 2010 to 2016, the
optimal if product markets are closely related on both dimensions. Our findings authors find that a non-recalling firm with moderate brand reliability has the
provide implications for a firm’s brand architecture choice between a branded highest idiosyncratic risk when a firm in the industry undertakes a product recall.
house (umbrella branding) and a house of brands (independent branding) Interestingly, when the last two recalls are from different firms within the
strategy and identify boundaries of an umbrella brand. We also discuss effects of industry, the current recall has a negative spillover effect only on the financial
category-wide innovation in quality on the optimal branding decision. We further value of the non-recalling firm with moderate brand reliability. That is, non-
provide an implication for an umbrella brand’s optimal customer targeting. recalling firms with moderate brand reliability experience a greater negative
spillover effect compared to firms with high and low brand reliability. The severity
of the current recall strengthens the negative spillover effect.
n TC12 4 - Value Drivers in Brand Acquisitions
Sundar Bharadwaj, Professor, University of Georgia, Georgia
Room 745, Alter Hall Athens, GA, 48824, United States, Sundar@uga.edu,
Marketing Strategy – Creating Firm Value Hang Nguyen, Ranjani Krishnan
Contributed Session Despite the popularity of acquiring brands of alliance partners, little is known
about the financial implications to the buyer. An empirical test on a sample of
Chair: Shuba Srinivasan, Boston University, School of Management, 1,858 brand acquisitions over a 25-year period shows that while the short-term
595 Commonwealth Ave, Boston, MA, 02215, United States, and long-term returns from acquiring a partner brand to the buyer are positive,
ssrini@bu.edu the long-term returns are larger. We find support for hypotheses based on
1 - Activist Investor Intervention, Marketing Spending, organizational learning and network theories. Buyer returns are an inverted U
function of the quantity and the duration and linearly positive with diversity of
and Firm Performance
pre-acquisition partner brand alliances. Exploration alliances (new product) enjoy
Hooman Mirahmad, Texas A&M University, 1001 Harvey Road higher returns than exploitation alliances (marketing, distribution, and licensing
Apt 77, College Station, TX, 77840, United States, alliances). While the buyer’s network centrality attenuates the alliance effect on
hmirahmad@mays.tamu.edu, Venkatesh Shankar buyer returns, the seller’s network centrality accentuates this effect. Consistent
In recent years, activist investors and the firms they target have attracted with learning benefits of lower information asymmetry and adverse selection
considerable attention from media, academia, and legal communities. During the mitigation, partner brand acquirers pay a lower premium and complete the
past 15 years, the number of activist investor campaigns has increased more than acquisitions faster compared to non-partner acquisitions. The results are robust to
five-fold. While finance, accounting, and management scholars have examined endogeneity, alternative measures and methods. Together, the findings offer new
the impact of activist investors on several financial and managerial outcomes such insights into the drivers of brand acquisition success.
as stock price, corporate governance, and analysts’ recommendations, the impact
of activist investors on marketing spending and marketing capabilities of firms has
been unexplored. In this research, using a sample of 718 firms targeted by activist
investors over 15 years (2000-2014), the authors examine the impact of activist
investor intervention on marketing spending, marketing capabilities, and firm
value through a differences-in-differences (DIFF-IN-DIFF) approach. They further
explore the moderating role of CEO’s marketing experience on the impact of
activist investor intervention on these outcomes. Preliminary analyses using
propensity score matching (PSM) show that firms with activist investor
intervention have lower advertising expenditures and firm value measured by
Tobin’s q than matched firms without activist investor intervention. Furthermore,
the effect is moderated by CEO’s marketing experience. These results suggest that
activist investor intervention has a detrimental effect on not just advertising
spending but also firm value, but CEOs with marketing experience can mitigate
the deleterious effect.
26
n TC13
level purchase records in physical stores. Using a doubly robust estimator that
incorporates nonparametric machine learning methods, we find that receiving
email ads can increase a consumer’s spending in physical stores by approximately
Room 746, Alter Hall $11.82. Additionally, we find that the increased offline sales result from increased
Multi-Channel Marketing I purchase probability and a wider variety of products being purchased. Further, we
demonstrate that the effect of email ads is heterogeneous across different
Contributed Session consumer segments using a data-driven approach. Interestingly, the effect is
Chair: Vibhanshu Abhishek, Carnegie Mellon University, 4800 Forbes highest among consumers who have fewer interactions with the focal retailer
Avenue, 3024 Hbh, Pittsburgh, PA, 19104, United States, vibs@cmu.edu recently (i.e., lower email opening frequency). Overall, our results suggest a
reminder effect of email ads. Receiving email ads from the retailer can generate
1 - For Better or for Worse: The Halo Effects of Online Marketplaces awareness and remind the consumer of the retailer’s offerings of various products
on Entrenched Brick-and-Mortar Stores and services, which gradually increase the consumer’s purchase probability in the
Zhiling Bei, University of North Carolina at Chapel Hill, McColl retailer’s physical stores. These findings have direct implications for marketers to
Building Suite 5103, 300 Kenan Dr, Chapel Hill, NC, 27599, improve their digital marketing strategy design and for policy makers who are
United States, bei@unc.edu, Katrijn Gielens interested in evaluating the economic impact of prevalent email advertising.
Traditionally, consumer packaged goods (CPGs) manufacturers have no direct

gateway to consumers but have to rely on retailers. With the advent of online
marketplaces, direct access to consumers is becoming a truly realistic option for n TC14
CPG manufacturers. Online marketplaces seems a winning proposition to
manufacturers at first glance. Not only can they create additional consumer Room 607, Alter Hall
demand, they also work as a bargaining chip and reduce dependencies on
retailers. However, in the context of CPG categories where retailers typically have
Machine Learning - Customers & Products
the exclusive control over retail price, promotion, and shelf space allocated to Contributed Session
each brand in the brick-and-mortar stores, the brand’s performance implications
of complementing entrenched reselling channels with online marketplaces are Chair: Fanglin Chen, New York University, Leonard N. Stern School of
less straightforward. The question remains whether and to what extent retailers Business, 321 East 48th Street, Apt 7H, New York, NY, 10017,
and all brands within the category stand to lose or win. To address this question, United States, fchen@stern.nyu.edu
online marketplace entries by 195 national brands (NBs) across 45 CPG categories 1 - Finding Anomalous Yet Profitable Customers
between 2011 to and 2014 are analyzed using a seemingly unrelated regression Keith Botner, Assistant Professor of Marketing, Lehigh University,
(SUR) model that quantifies the impact of online marketplaces on category sales,
621 Taylor Street, Bethlehem, PA, 18015, United States,
focal NB share, rival NB share, and rival private label (PL) share. Drawing on
empirical generalizations, the authors find that, on average, entries by NBs, keith.botner@lehigh.edu, Himanshu Mishra, Arul Mishra
especially leading NB, boost categories sales in entrenched offline stores. How to find promising customers, opinion leaders, strong sales leads, or those
Moreover, entries by secondarily leading and weak NBs are more likely to boost most likely to redeem an offer are questions that most firms are interested in
own share. With respect to the competitive impact, entries by NBs tend to hurt answering. Because such groups may form just a small percentage of the firm’s
rival PLs. In contrast, entries by leading and weak NBs boost the share of rival customer base and possess characteristics unknown to the marketer, they can be
NBs. quite difficult to detect in data sets. Making this more of a challenge, a majority of
existing anomaly detection methods do not have the ability to incorporate all
2 - Interrelated Visits and Sales in an Omni-channel System: features of the current, rich marketing data. In this research, we develop a new
An Empirical Dynamic Modelling Approach kernel-based method suitable for the big data that firms are collecting. Our
Florian Dost, Lancaster University Management School, Lancaster, proposed method provides the benefits of identifying promising customers in:
LA14YX, United Kingdom, f.dost@lancaster.ac.uk, Erik Maier, unlabeled data with no known a priori distribution, mixed attribute data, or data
Tammo H A Bijmolt with more variables than observations. Using different kernel combinations across
synthetic data as well as customer referral data from an online retailer, we
Today’s retail environment is characterized by an increasingly complex and
examine and show the efficacy of the proposed method. Utilizing data from the
interrelated set of channels across which consumers move freely. These
online retailer, we examine the revenue generated from a successful referral, and
movements include visits to one channel and sales in another, referred to as
the cost of incentivizing customers to refer. We compare this method to
research shopping, as well as post-purchase experience effects that create
competing methods and approaches, including a no-model condition. In addition
feedback within the omni-channel system. As a result, channels become causally
to theoretical advances, findings introduce an actionable, flexible tool with
interrelated, depending endogenously on each other. The emerging omni-channel
significant implications for marketers attempting to identify the most valuable
system may exhibit non-linear and state-dependent behavior rather than linear
customers.
behavior in equilibrium. To assess these channel interrelations based on the
movements of consumers, often only aggregate time series data are available (e.g., 2 - The Power of Deep Neural Networks: How Machine Learning Can
online visits per time period). The authors introduce empirical dynamic models Advance the Forecasting of Product Success Based on Aesthetic
(EDM), a nonlinear methodology used in research on biological eco-systems, to Appearance
capture different types of channel interrelations and non-linear behaviors. In
Stefan Mayer, Goethe University Frankfurt,
particular, EDMs allow for empirically testing all pairs of channel time series
variables for an uni-directional or bi-directional, possibly non-linear relationship Theodor-W.-Adorno-Platz 4, Frankfurt, 60629, Germany,
within a common omni-channel system. The resulting interrelation network can smayer@wiwi.uni-frankfurt.de, Jan R. Landwehr, Oliver Beck
be exploited to assess the state-dependent and interacting within-channel and The capability of neural networks to automatically classify visual images has
cross-channel effects. EDM are applied to examine daily visits and sales time increased tremendously in recent years. In fact, since 2015, neural networks have
series data from a three-channel system (brick-and-mortar, online store, and been able to outperform human beings in correctly classifying the content of
mobile store) of a fashion retailer. We find that not all possible relationships images. In this study, we present an application of this powerful image-
between channel variables are relevant. Specifically, the online and mobile visits recognition technique to a core marketing problem: The prediction of a product’s
remain independent of each other. Furthermore, not all channels interact market performance. In particular, we develop a novel approach to automatically
synergistically such that the retailer should focus on increasing the number of assess the visual typicality of a product’s appearance using transfer learning.
visits in mobile and brick-and-mortar stores, but not the online store. Extant literature has established that visual typicality is a key determinant of
3 - Estimating the Causal Effects of Online Ads on consumers’ aesthetic appreciation of product design and of a product’s success in
the market (e.g., Landwehr, Labroo, & Herrmann, 2011; Liu, Li, Chen, &
Omni-channel Sales Balachander, 2017; Rubera, 2014). Against this background, we introduce a novel
Vibhanshu Abhishek, Carnegie Mellon University, 4800 Forbes measure and empirically compare it to alternative measures using car models
Avenue, 3024 Hbh, Pittsburgh, PA, 19104, United States, from different brands. We show that our novel measure is superior at forecasting
vibs@cmu.edu, Mi Zhou, Kannan Srinivasan, Edward Kennedy, both sales and aesthetic liking. Our research provides an easily applicable
Ritwik Sinha approach to automatically assess a key determinant of a product’s success in the
market and emphasizes the enormous potential of deep neural networks and
Businesses have widely used email ads to directly send promotional information
transfer learning for marketing applications.
to consumers. While email ads serve as a convenient channel that allows firms to
target consumers online, are they effective in increasing offline revenues for firms
that predominantly sell in brick-and-mortar stores? Is the effect of email ads, if
any, heterogeneous across different consumer segments? If so, on which
consumers is the effect highest? In this research, we address these questions using
a unique high-dimensional individual-level dataset from one of the largest
retailers in the US, which links each consumer’s online behaviors to the item-
27

3 - Topic Hidden Markov Model (THMM): A New Machine Learning 2 - The Role of Interfunctional Conflicts on the Brand Orientation and
Approach to Make Dynamic Purchase Predictions Innovativeness Relationships
Milad Darani, Texas A&M Universtiy, 503 Southwest Parkway, Emine Erdogan, PhD Candidate, Rutgers University,
Apt 1204, College Station, TX, 77840, United States, 1 Washington Park, Newark, NJ, 07102, United States,
milad.md183@gmail.com, Venkatesh Shankar ee134@scarletmail.rutgers.edu, Omer Topaloglu
Prediction of customers’ next purchases is increasingly becoming important to The brand is the most valuable strategic asset for any business and it requires an
retailers and direct marketers as it allows them to design effective and effort more than satisfying the needs and wants of customers. It is an identity that
personalized marketing campaigns and recommender systems to enhance sales. frames the company objectives and strategies in the process of value and meaning
Prediction of next purchases in these contexts is a big data dynamic problem as creation. Brand orientation is an inside-out approach that allows building
they involve a large number of products and a huge customer base. Current strategies around the brand and tying all functions of the company into this brand
purchase prediction models (e.g., collaborative filtering, stochastic models) do not identity (Urde et al., 2013). In this framework, market orientation becomes an
scale well as it is not managerially practical to rely on product characteristics and antecedent of brand orientation. Scholars argue that interfunctional conflict
limited customer characteristics. In this paper, we propose a new machine serves as an important antecedent to market orientation (Jawoski and Kohli,
learning approach, which we call the Topic Hidden Markov Model (THMM) that 1993 and Kirca et al., 2005). They claim that conflict among different functions
combines topic modeling with Hidden Markov Model (HMM). Our approach has reduces the level of market orientation by inhibiting communication across
several unique aspects that set it apart from alternative models. First, it can learn departments. Conflict literature also suggests that whether conflict has beneficial
patterns that exist in transactions of multiple items in a purchase occasion. or detrimental outcomes depends on the type of conflict. While task-related
Multiple item transactions are common in categories such as salty snacks and conflict is positively related to outcomes, relationship conflict is negatively related
cereals and existing methods of modeling these transactions do not offer (Jehn, 1995; Jehn, 1997). Mindfulness literature, on the other hand, has found a
sufficiently accurate predictions. Second, the model can capture the dynamic or positive relationship between individual mindfulness and interpersonal conflict
time-varying patterns in customers purchase habits. Finally, the proposed model handling (Fiol et al., 2009; Horton-Deutsch and Horton, 2003), problem-solving
can explicitly find segments of customers based on their shopping habits and capability (Ostafin & Kassman, 2012) and better work performance (Giluk, 2010).
predict every customer’s tendency of deviating from the common shopping Based on these works of literature, this study explores the question of how
behavior within the segment. We empirically test our model using data from different kinds of interfunctional conflict (task and relationship conflicts)
retailer settings. We compare our approach to alternative models. The model influence brand orientation, market orientation, and innovativeness relationships
validation tests demonstrate the superior prediction accuracy of our proposed and how mindfulness can help to reduce the negative effect of these conflicts in
approach over benchmark models. organizational environments.
4 - Understanding Product Competition with 3 - A Comparison of Brand Loyalty Between on the Go and Take
Representation Learning Home Consumption Purchases
Fanglin Chen, New York University, New York, NY, 10017, Giang T. Trinh, Senior Marketing Scientist, Ehrenberg-Bass
United States, fchen@stern.nyu.edu, Xiao Liu, Davide Proserpio Institute-UniSA, Ehrenberg-Bass Institute, School of Marketing,
Identifying key competitors is essential to a firm’s pricing, product design, and Adelaide, 5001, Australia, Giang.Trinh@marketingscience.info,
brand positioning strategies. In mature markets, companies often have long John G. Dawes, Rachel Kennedy
product lines with numerous products under the same brand. As a result, This paper compares consumer brand purchasing loyalty for on the go and for
competition does not only occur among brands but also among different products take home consumption. The study uses two UK consumer packaged goods
or UPCs within a brand. Studying competition at the UPC level can provide firms datasets: the first details actual consumer repeat purchasing of brands in three
with insights on cannibalization, cross-category competition and product line product categories, soft drinks, crisps, and savory snacks for on the go
optimization. However, prior methods for mapping competitive relationships (i.e., consumption; the second contains actual consumers repeat purchasing of the
choice models) focused on measuring brand-level competition, overlooking same brands for take home consumption. Using polarization index as a behavioral
competition at the UPC level. This choice was mainly driven by computational loyalty measure, estimated from the Beta Binomial - Negative Binomial
constraints because incorporating the intrinsic preference for a myriad of UPCs Distribution, the study finds that consumer loyalty to brands is markedly higher
will explode the parameter space and make estimation intractable. In this paper, in purchasing for on the go consumption than for take home consumption.
we overcome the limitations of traditional choice models by combining them with
a machine learning technique - representation learning. The proposed model is 4 - An Application of Place Branding to City and Theme Park Tourism
highly scalable, allowing us to analyze competition among hundreds of thousands Sangkil Moon, Professor of Marketing, University of North
of products in a few hours. The representation learning technique, i.e. Word2vec, Carolina-Charlotte, Charlotte, NC, 28223, United States,
maps products to an N-dimensional vector space such that products close in the smoon13@uncc.edu, Young Han Bae, Jong Woo Jun, Ilyoung Ju
vector space are more likely to compete with each other than products that are
far apart. We demonstrate how to use this model to uncover inter-brand and Place branding research has deepened and broadened the mainstream branding
intra-brand competition. domain by developing marketing strategies focusing on places. We examine how
to improve prospective consumers’ attitudes toward places (e.g., city) through the
city’s major tourism attractions (e.g., theme park). A major theme park can attract
tourists to its city by improving tourists’ attitudes toward the city through their
n TC15 favorable attitudes toward the theme park. Based on this place branding
mechanism, we examine consumers’ attitudes toward a theme park and a city. In
Room 603, Alter Hall our empirical analysis, we conducted a survey on the relationship of Disneyland
Brand Image and Los Angeles (LA) as a representative example. In measuring the specified
relationships, we use the tripartite framework of attitudes - cognition, affect, and
Contributed Session conation. Specifically, our proposed model investigates the relationships of Disney
content, Disneyland tripartite attitudes, and LA attitudes. Our results show that
Chair: Giang Tue Trinh, University of South Australia, Ehrenberg-Bass international tourists’ evaluations of Disney theme park content positively
Institute, School of Marketing, Adelaide, 5001, Australia, influences Disneyland cognition, affect, and conation, while both cognition and
Giang.Trinh@marketingscience.info affect are also positively linked to conation. Furthermore, survey participants’
1 - New Product Introductions, Category Typicality and Firm Value favorable Disney content evaluation and affect toward Disneyland enhance their
Burcu Sezen, Universidad de los Andes, Bogota, Colombia, attitude toward LA positively. To conclude, this study incorporates theme parks as
an antecedent of consumers’ attitudes toward cities to illuminate the
burcu.sezen@ozu.edu.tr, Dominique M Hanssens
interrelationships of relevant constructs capturing the synergistic effect of cities
New product introductions by family brands cause stock price movements in the and their tourism attraction components. At the end, we discuss how theme parks
parent brand. The family brand is successfully stretched into various categories, and cities can use our study results to attract more tourists as strategic partners in
however the nature of the category plays an important role in determining the the context of place marketing and branding.
magnitude of the spillover in the financial market. Particularly, typicality of the
category for the brand determines how seriously consumers and investors take
any action that comes from the brand in this category. Using insights from
categorization theory, the authors hypothesize that 1) The more typical is the
parent category for the brand, 2) the more typical is the category for the
extending brand, the more of a reciprocal effect there is back from the new
product introductions. The authors use the Virgin Family Brand case and event
study methodology to empirically test their hypotheses. The results have the
implication that managers of family brands should pay particular attention to the
typicality of the category of the brand when predicting abnormal returns caused
by an event such as a new product introduction.
28
INFORMS MARKETING SCIENCE – 2018 TD01
n TC16 4 - The Impact of Language Switching on Quality Evaluations

Alexander Chaudhry, Assistant Professor, Texas Tech University,
Room 231, Alter Hall 703 Flint Avenue, Lubbock, TX, 79409, United States,
alexander.chaudhry@ttu.edu, Yang Wang
UGC I - Online Reviews
We identify the phenomenon of language switching among online reviewers and
Contributed Session study motivations for language switching and its impact on product evaluation.
Chair: Alexander Chaudhry, Texas Tech University, 703 Flint Avenue, We find evidence that language switching cues cultural frame shifts that lead to
holistic overall judgments. These shifts lead to overall judgments that are less
Lubbock, TX, 79409, United States, alexander.chaudhry@ttu.edu
influenced by a product’s outlier attribute evaluations. We document the
1 - The Effects of Review Extremity and Rhetorical Devices on Online perceived quality differences between reviewers’ native language and English,
Review Helpfulness finding the same effect across 11 languages. However, the magnitude of the
Masoud Moradi, PhD Candidate, Texas Tech University, 5001 quality ratings across cultures vary when considering reviewer demographics and
Chicago Avenue, Apt 415, Lubbock, TX, 79414, United States, review topics and verbosity.
masoud.moradi@ttu.edu, Mayukh Dass, Dennis Arnett
Thursday, 3:30PM - 5:00PM

How do review extremity and content of online reviews affect review
helpfulness? This paper focuses on four rhetorical devices -Emotional Tone (ET),
Linguistic Style Match (LSM), Perceived Clout (PC), and Categorical Language
Style (CLS), and investigates three research questions: (1) Does review extremity
(i.e., one-star or five-star rating) affect review helpfulness? (2) Do rhetorical
devices affect review helpfulness? (3) Do rhetorical devices moderate the effect of n TD01
review extremity on review helpfulness? Focusing on 1,042,265 Video Games
reviews posted on Amazon.com over 18 years, we examined the above questions. Room 32, Alter Hall
Results of the Poisson regression show a U-shaped effect of the overall rating on
review helpfulness suggesting that review extremity has a positive effect on
Consumer Response to Visual
review helpfulness. With regards to the rhetorical devices, we found that ET, User-Generated Content
LSM, PC, and CLS have positive effects on review helpfulness. On examining the General Session
moderating effects, we found an inverted U-shaped effect of the interaction
between emotional tone and overall rating on review helpfulness suggesting that Chair: Purushottam Papatla, University of Wisconsin-Milwaukee,
emotional tone decreases the effect on review extremity on review helpfulness. Milwaukee, WI, 53201-0742, United States, papatla@uwm.edu
However, LSM, PC, and CLS increase the effect of review extremity on review 1 - Mixed Methods and Importance of Multi-Modality in
helpfulness. Our paper contributes by expanding the online review literature and
examining the effects of textual information on the review helpfulness and
Understanding Online Content
provide a justification for inconsistent results reported in the previous literature Saeideh Bakhshi, PhD, Facebook, CA, United States,
regarding the effect of review extremity on review helpfulness. saeede83@gmail.com
2 - Longitudinal Analysis of Online Consumer Review Humans are complex and their behaviors follow complex multi-modal patterns,
however to understand content on social media, researchers often look at
Ping-Yu Liu, Doctoral Candidate, National Taiwan University,
complexity in large-scale yet single point data sources or methodologies. Visual
No. 1, Sec. 4, Roosevelt Road, Taipei, 106, Taiwan, content is one of the examples of social media content that is often looked at
d01741008@ntu.edu.tw, Chun-Yao Huang using single data source or single methods. Often with one type of data and
The Internet nowadays has become an important source of information for method, all the other aspects of human behavior are overlooked, discarded, or,
consumers to make purchase decision. Consumers rely heavily upon online worse, misrepresented. We identify this as two succinct problems. First, social
reviews and ratings to seek out opinions and experiences on the Internet from computing problems that cannot be solved using a single data source and need
people they might even unfamiliar with. Although abundant studies concern intelligence from multiple modals of visual, textual and attitudinal and, second,
about online reviews in existing literature over last decade, there is scarcity of social behavior that cannot be fully understood using only one form of
studies explore the issue of how online reviews of a specific product or service methodology. Throughout this talk, we discuss these problems and their
differ across review platforms and change over time. It would be highly interested implications, illustrate examples, and propose new directives to properly approach
by researchers, especially practitioners. We choose the hotel category because it in the social computing research in today’s age.
represents a kind of experience products that quality is difficult to assess in 2 - Visual Listening In: Extracting Brand Image Portrayed on
advance, and therefore consumers highly depend on online review to make
booking decisions. Based on scraping data of hotel online review, we focus on
Social Media
ratings across time, and explain such differences by those review texts. In our Liu Liu, New York University, Leonard N Stern School of Business,
empirical analysis, we utilized sentiment analysis and General Inquirer (GI) 40 West 4th Street, New York, NY, 10012, United States,
dictionary to identify and tag the sentiment categories of words in the text lliu@stern.nyu.edu
content of consumer review. Furthermore, we explored how sentiments of review Marketing academics and practitioners recognize the importance of monitoring
texts change along with hotel rating changes. Our empirical research reveals that consumer online conversations about brands. The focus so far has been on user
the change of online ratings is highly significant for specific providers in the generated content in the form of text. However, images are on their way to
longitudinal situations. Moreover, the change of positive- and pleasure-sentiment surpassing text as the medium of choice for social conversations. In these images,
relate to the change of review rating positively and significantly. Conversely, the consumers often tag brands. We propose a ``visual listening in” approach to
change of negative- and pain-sentiment relate to the change of review rating measuring how brands are portrayed on social media (Instagram) by mining
negatively and significantly. Overall, our result demonstrates that information visual content posted by users, and show what insights brand managers can
extracted from review text content can substantially explain such differences by gather from social media by using this approach. Our approach consists of two
adopting a systematic analysis approach and utilizing an established semantic stages. We first use two supervised machine learning methods, traditional support
dictionary. vector machine classifiers and deep convolutional neural networks, to measure
3 - The Dynamic Impact of Different Reviewer Types on Different brand attributes (glamorous, rugged, healthy, fun) from images. We then apply
Groups of Customers the classifiers to brand-related images posted on social media to measure what
consumers are visually communicating about brands. We study 56 brands in the
Shyam Gopinath, Kelley School of Business, Bloomington, IN,
apparel and beverages categories, and compare their portrayal in consumer-
United States, shgopi@iu.edu, Elham Yazdani created images with images on the firm’s official Instagram account, as well as
Online opinion leaders have a role to play in disseminating information and with consumer brand perceptions measured in a national brand survey. Although
driving product sales. In this research, a dynamic modeling framework is used to the three measures exhibit convergent validity, we find key differences between
investigate the differential dynamic impact of different reviewer types on product how consumers and firms portray the brands on visual social media, and how the
sales. The dataset consists of a panel data of all reviews and product sales average consumer perceives the brands.
information covering the first two months of release for all 141 new music
albums released on Amazon.com over an approximately three-month period.
There are several key findings. First, we find that different reviewer groups have
different impacts on product sales, which arises due to their differences in both
writing style and product level knowledge. Second, we find that the influence of
the reviewer groups vary across different consumer demographics. Finally, our
market level econometric model allows us to rank different markets based on the
responsiveness of the demographic groups to the different reviewer types. Our
findings have important implication for both online retailers as well as brick and
mortar stores.
29
TD02 INFORMS MARKETING SCIENCE – 2018

3 - Face, Body or Both? Effects of Partial and Full Visibility of People 2 - What Makes Movies Popular? The Role of Emotional Arcs
in VUGC on Consumer Response. Jonah Berger, University of PA - Wharton, 700 JMHH,
Purushottam Papatla, University of Wisconsin-Milwaukee, 3730 Walnut Street, Philadelphia, PA, 19104, United States,
University of Wisconsin-Milwaukee, Milwaukee, WI, 53201-0742, jberger@wharton.upenn.edu, Robert J. Meyer, Yoonduk Kim
United States, papatla@uwm.edu Why do some cultural items (e.g., movies and songs) succeed while others fail?
Photos posted on social media like Instagram often include people using specific While some have argued that success is random, we suggest that fit with
brands of products. Online retailers of these brands have begun to display the individual-level psychological processes plays an important role. Using automated
photos on their sites with the assumption that seeing other consumers using the sentiment analysis, we plot the emotional trajectories of thousands of movies,
products can attract attention and increase product interest in site visitors. One examining the link between emotional volatility (i.e., short-term shifts in
disadvantage of displaying VUGC for retailers is that people rather than products emotion) and popular reception. Results indicate that more emotionally variable
in the displayed photos could attract a substantial share of visitors’ attention. This movies receive higher ratings, and this relationship is stronger in genres where
could be particularly the case when the photos display faces prominently. Among uncertainty and surprise should be more desirable (e.g., thrillers and mysteries).
visual stimuli, faces attract the most attention because of humans’ evolutionary These findings shed light on cultural dynamics, why things become popular, and
need to understand facial emotions for survival. Recent research in fact finds that the psychological foundations of culture more broadly.
the presence of faces in VUGC is detrimental to consumer response. A question
3 - Technology Adoption and Depression Diagnosis: Evidence from
raised by these findings is whether the presence of faces in VUGC could be less
detrimental if they are less prominent. This is the question that we investigate the Adoption of Multiple Technologies
based on findings that faces and bodies of humans in the visual field are processed Xiaolin Li, University of Texas at Dallas, Dallas, TX,
holistically even if they are seen as distinct stimuli. If this is the case, faces should United States, lixiaolin420925@gmail.com, Elisabeth Honka,
be less distractive when an entire person rather than just the face is prominent in Pradeep Chintagunta
the displayed photo since the focus will not be entirely on the face and emotions
Other than anecdotal evidence, little is known about the potential relationship
therein. We investigate if this is the case in this research empirically by analyzing
between the adoption of new technologies by consumers and their health
consumer response to about 12,000 photos of 800 different products in six
outcomes. We examine a specific health outcome - the probability of being
categories displayed by 35 online retailers.
diagnosed with depression - and the adoptions of four technologies (home and
4 - Modeling Visual Impressions of Faces handheld video game consoles, HDTV, and mobile internet) by a panel of
Alexander Todorov, PhD, Princeton University, NJ, United States, individuals. Our data come from Forrester Research’s annual North American
atodorov@princeton.edu Technographics Benchmark surveys. We observe an unbalanced panel of more
than 35,000 consumers between 2003 and 2009 reporting whether they were
People form instantaneous impressions of other people based on facial diagnosed with depression and whether they (previously) adopted each of the
appearance, agree on these impressions, and often act on these impressions. four technologies. Additionally, we have demographic information and
These findings suggest that it should be possible to model social perception of information on important life events that also occurred during the observation
faces. However, reducing a high-level social attribution like trustworthiness to the period. First, we look at the relationship between adoption of a technology in a
physical description of the face is far from trivial. A major methodological given year and the report of a depression diagnosis the following year. In doing
problem is that the space of possible variables driving social perceptions is so, we need to address the presence of unobservables that influence both
infinitely large, thus posing an insurmountable hurdle for conventional adoption and depression and the reverse causality problem: individuals who feel
approaches. The alternative is data-driven approaches whose objective is to depressed may adopt technologies that they feel might alleviate the depression
identify quantitative relationships between high-dimensional variables (e.g., and then get diagnosed with depression anyway. To do so, we instrument for the
visual images) and behaviors (e.g., perceptual decisions) with as little bias as adoption of each of the technologies: marketing and related activities (e.g.,
possible. I describe a series of studies using reverse correlation methods based on advertising) of the technologies encourage adoption without directly influencing
judgments of randomly generated faces from a statistical, multidimensional face depression and hence serve as valid instruments in this case.
model; a vector space where every face can be represented as a vector in the
space. These methods can be used to a) model evaluation of faces on any social 4 - Decentralized Pricing and Platform Design in the Sharing
dimension (e.g., trustworthiness), and b) to identify the perceptual basis of this Economy: A Randomized Field Experiment
evaluation. We can model both face shape and face reflectance and Arun Sundararajan, New York University, Stern School of Business
experimentally identify their contributions to social perception. These methods Info Sys Dept, 44 West 4th Street KMC 8-93, New York, NY,
provide an excellent discovery tool for mapping configurations of face features to 10012, United States, arun@stern.nyu.edu, Apostolos Filippas,
specific social inferences. Srikanth Jagabathula
Sharing economy platforms like Airbnb and Lyft represent a spectrum of new
firm-market hybrids: some are decentralized marketplaces that simply match
n TD02 buyers and sellers, while others centralize pricing, matching and capacity
decisions to varying degrees. We conduct a field experiment that analyzes
Room 33, Alter Hall balancing centralized intelligence and decentralized decision making for pricing
Digital Economy IV: Internet of Things, Technology policy. While centralized dynamic pricing seems optimal at first glance, especially
when providers are inexperienced and cognitively bounded, peculiarities of the
and Sharing Economy sharing economy lead to tradeoffs. Beyond superior local knowledge, providers
General Session monetize personal time or assets, making platform control over price/availability
challenging or infeasible. Provider and platform objectives are often not aligned
Chair: Vilma Todri, Emory University, Atlanta, GA, 30322, for reasons beyond competitive spillovers. The ease of provider entry and exit
United States, vtodri@stern.nyu.edu amplifies the risks associated with perceived unfairness and incentive
1 - The Business Value of the Internet-of-Things: misalignment. Our randomized trials, conducted over a two-month period at a
leading San Francisco-based peer-to-peer car rental platform, contrast the
Evidence from an Online Retailer
behavior and performance of two treatment groups (centralized, hybrid) with a
Vilma Todri, Emory University, Emory University, Atlanta, GA, control group (decentralized). We find that provider retaliation to a loss of pricing
30322, United States, vtodri@stern.nyu.edu, control alters the economic benefits of dynamic pricing, partial delegation
Panagiotis Adamopoulos, Anindya Ghose mitigates the impact of retaliation, and these effects vary with provider scale,
The “Internet of Things” (IoT) is rapidly becoming one of the most popular experience, and perceptions of fairness. Our results provide important guidelines
emerging technologies in business and society. One of the major verticals that has for sharing economy platforms that lack the typical directive authority, asset
recently begun to effectively utilize IoT technologies is the retail industry. Given control or culture-building capabilities that traditional firms use to implement
the unpreceded opportunities IoT generates for brands and retailers, it is of revenue management strategies.
paramount importance to generate timely insights regarding the business value of
IoT and understand whether the adoption of an IoT technology as an alternative
purchase channel for consumers affects the volume of sales of physical products.
In this paper, using empirical data from an online retailer who adopted an IoT
technology that automates the consumers’ purchasing process and utilizing a
quasi-experimental framework, we study the effect of the adoption of the IoT
technology on product sales and demonstrate the business value of IoT for
retailers and brands. Our analyses reveal a significant increase in sales due to the
IoT technology. Besides, we delve into the effect heterogeneity by examining the
impact of IoT for products in different price range and different product
taxonomies (i.e., search versus experience goods). Our analyses reveal that less
expensive products as well as experience goods, rather than search goods, can
accrue the highest benefits leveraging more effectively the novel IoT technologies.
We validate the robustness of our findings using several robustness checks and
falsification tests. To the best of our knowledge, this is the first paper to study the
impact of an IoT technology on product sales making significant theoretical
contributions while drawing important managerial implications.
30
n TD03
person reading a given article, how textual features of a given paragraph (i.e., the
words used) shape whether someone continues to the next paragraph or not.
Results indicate that how much emotion content evokes, whether it uses familiar
Room 34, Alter Hall or vivid language, textual complexity, and whether the words indicate cognitive
Blockchain Technologies and their Applications processes are occurring are all linked to longer reads. Importantly, however, not
to Marketing all emotion increases reading. Consistent with research on appraisal tendencies
and attention, while text that evokes anger and sadness discourage further
General Session reading, text that evokes anxiety encourages it. To address selection concerns, we
control for various features such as what platform the user is reading the article
Chair: Catherine Tucker, Massachusetts Institute of Technology, , (e.g., mobile vs. desktop), the topic of the article, and even article level textual
Cambridge, MA, 02142, United States, cetucker@mit.edu features. The results shed light on the psychology of content consumption and
Co-Chair: Christian Catalini, Massachusetts Institute of Technology, has implications for content marketing and content producers.
Cambridge, MA, 02142, United States, catalini@mit.edu 2 - Effects of Product Innovativeness and Engagement with Online
1 - Blockchain Technology and Marketing: Promise and Pitfalls Users on Branding Strategies: Evidence From Twitter
Christian Catalini, Massachusetts Institute of Technology, Meltem Kiygi Calli, Assistant Professor, Kadir Has University, Cibali
Cambridge, MA, United States, catalini@mit.edu, Catherine Tucker Campus, Faculty of Management, Fatih, Istanbul, 34083, Turkey,
meltem.kiygicalli@khas.edu.tr, Abdullah Onden
This paper is an overview of the variety of ways that blockchain technologies may
be used to revolutionize marketing. After providing an issue introduction to what Mining social tags enables marketing researches to understand brand associations,
blockchain technologies actually are and what makes them different, we move to competitive market structure and to predict firm performance. Many forms of
their application in marketing. We highlight in particular their potential to online content such as web links, images, photos, videos, and tweets can be
provide costless decentralized verification of digital identities, and the variety of tagged and used for marketing research. This study presents an approach to
applications that this might have to the digital advertising industry. We also gather and analyze social tagging data and shows how marketers can derive
introduce the Cryptoeconomics Initiative at MIT. useful outcomes from these data. In this paper, we investigate the impact of high-
technology (hereafter HT) companies’ engagement with the online users on
2 - Seeding the S-Curve? The Role of Early Adopters in Diffusion brand perception. Firstly, we analyze the overall sentiment trends for each HT
Catherine Tucker, MIT, Cambridge, MA, 02142, United States, brand using collected tweets posted on Twitter which is one of the popular social
cetucker@mit.edu, Christian Catalini media platforms today. Secondly, we analyze the impacts of engagement between
In October 2014, all 4,494 undergraduates at the Massachusetts Institute of companies and users on sentiments related with the brand image and perception.
Technology were given access to Bitcoin, a decentralized digital currency. As a In the study, we collect the Twitter data on five HT product categories. Sentiment
unique feature of the experiment, students who would generally adopt first were analysis is conducted using Sentiment140. It measures the strength of sentiments
placed in a situation where many of their peers received access to the technology by giving scores. To analyze the relationship between engagement and sentiment
before them, and they then had to decide whether to continue to invest in this on social media, we collect the tweets posted by the companies’ or their
digital currency or exit. Our results suggest that when natural early adopters are support/help services’ and analyze them. The impacts of level, media types (link,
delayed relative to their peers, they are more likely to reject the technology. We text, video, photo), length, time (day-of-week and time-of-day) of tweets on
present further evidence that this appears to be driven by identity, in that the customers’ emotions and sentiments are investigated. We also examine the word
effect occurs in situations where natural early adopters’ delay relative to others is frequencies and show word mapping for each brand. Moreover, we analyze the
most visible, and in settings where the natural early adopters would have been tweets about the target HT product innovations for each brand. The results show
somewhat unique in their tech-savvy status. We then show not only that natural that on which technical characteristics of the HT products consumers do focus.
early adopters are more likely to reject the technology if they are delayed, but Examples of the technical terms are face ID, all screen, TrueDepth camera, water
that this rejection generates spillovers on adoption by their peers who are not resistance, wireless charging.
natural early adopters. This suggests that small changes in the initial availability of 3 - Advertising on Premium or Non-premium Websites?
a technology have a lasting effect on its potential: Seeding a technology while Effects on Recall, Attitudes, and Click Behavior
ignoring early adopters’ needs for distinctiveness is counterproductive.
Edlira Shehu, University of Southern Denmark, Campusvej 55,
3 - Mobile Fintech: How Instantaneous Analytics Changes Consumer Odense, DK-5230, Denmark, edsh@sam.sdu.dk, Nadia Abou
Decision Making Nabout, Michel Clement
Shuyi Yu, MIT, Cambridge, MA, United States, shuyiyu@mit.edu Hundreds of brands (e.g., AT&T and Verizon) stopped advertising on YouTube and
The Financial services industry has been transformed by the advent of Fintech, the Google display network in 2017 due to fear that their ads would appear on
and especially the use of mobile applications to deliver instantaneous analytics to non-premium websites with inappropriate content. Thus, the inherent quality of
consumers. It is not clear, though how this increase in analytics availability affects websites has become an important determinant of how online marketers plan
decision making. To analyze this I use unique detailed data that tracks financial their online advertising campaigns. Managerial practice currently envisions that
trades made on desktops and mobile. I find suggestive evidence that people uses advertising on premium websites is primarily relevant for branding campaigns,
fewer pieces of data when making purchase decisions on the mobile platform. To but less so for performance campaigns. Understanding how premium and non-
identify whether this is causal, I exploit variation in mobile usage related to premium websites affect online advertising effectiveness has substantial
people reaching mobile data caps at the end of the month. managerial relevance; yet, empirical insights are scarce. We use data from two
large-scale field studies, alongside observational data, to analyze how advertising
on premium and non-premium websites influences advertising effectiveness
along the hierarchy-of-effects. We show that website quality is relevant for both
n TD04 branding and performance campaigns, depending on brand image. For high-
image brands, advertising on premium websites affects both branding and
Room 35, Alter Hall performance campaign effectiveness positively. In contrast, low-image brands do
Digital Marketing II not benefit from advertising on premium websites.
Contributed Session
Chair: Edlira Shehu, University of Southern Denmark, Geschwister-
Scholl-Strasse 64, Hamburg, 20251, Germany, edsh@sam.sdu.dk
1 - What Leads To Longer Reads? Reading Depth In Online Content
Wendy W. Moe, Robert H. Smith School of Business, University of
Maryland, College Park, 3469 Van Munching Hall, College Park,
MD, 20742, United States, wmoe@rhsmith.umd.edu,
Jonah Berger, David A. Schweidel
In today’s digital age, more and more consumers read content online. They scan
articles on the Wall Street Journal’s website, catch up on sports at ESPN.com, and
peruse blogs on tech and celebrity gossip. But what leads to longer reads? That is,
what about certain articles encourage people to keep reading rather than leave
the article and do something else? To address this question, we use natural
language processing to analyze half a million reading sessions from over 30,000
articles from nine major online publishers. This allows us to examine, for a given
31
n TD05
experiment field data on a platform reputation policy (Food Safety and Liability
Insurance) in a home-cooked food sharing context. The platform saw an overall
increase of sellers’ sales revenue and buyers’ expenditure after implementing the
Room 232, Alter Hall policy. More interestingly, the insurance policy led to greater sales revenue
Mobile, Algorithm, and Artificial Intelligence (AI) increases for sellers with lower or no review ratings than sellers with higher
Session I: Omnichannel Adverstising and ratings. The results indicate that the reputation policy intervention boosted the
revenue growth of zero-rating and lower-rating sellers by 172% and 162%,
Field Experiments respectively, while the revenue growth of higher-rating sellers was 128%. On the
General Session buyer side, the insurance policy induced the novice buyers to spend more on the
platform than seasoned buyers. The policy intervention boosted inexperienced
Chair: Xueming Luo, Temple University, Philadelphia, PA, 19122, buyers’ expenditure by 395%, whereas there was hardly any increase in
United States, luoxm@temple.edu experienced buyers’ expenditure. These findings suggest that the platform
reputation enhancement policy grows the sharing economy business through the
Co-Chair: Anandasivam Gopal, University of Maryland, College Park, mechanism of engendering more sales of the low-rating sellers and increasing
MD, 20742, United States, agopal@rhsmith.umd.edu more purchases from novice buyers.
1 - Micro-Giving: On the use of Mobile Devices and Monetary
Subsidies in Charitable Giving
Anandasivam Gopal, University of Maryland, University of n TD06
Maryland, College Park, MD, 20742, United States,
agopal@rhsmith.umd.edu, Dongwon Lee, Dokyun Lee Room 234, Alter Hall
Mobile devices are increasingly being used by non-profits and charitable Analysis of Markets I – Structure and Alliance
organizations as an alternative channel for philanthropy. Specifically,
organizations can construct fund-raising campaigns through mobile applications
Contributed Session
or through mobile services such as SMS messages to target individuals and Chair: Sungtae Eun, Texas Tech University, 5402 66th st, 107, Lubbock,
incentivize charitable giving. Research studying how mobile devices may be used TX, 79424, United States, sungtae.eun@ttu.edu
to enhance such campaigns is limited. In this paper, we study how charitable
giving through mobile apps can be enhanced through the use of push 1 - Modelling and Forecasting the Dynamics of Mobile Devices
notifications and economic incentives. Using a randomized field experiment Market Shares
conducted in partnership with a mobile service provider in the US, we examine Ivan Svetunkov, Assistant Professor, Lancaster University,
the effects of push notifications, monetary subsidies, and intertemporal choices of Lancaster University Management School, Lancaster, LA1 5ET,
rewards on donation outcomes by individual users. Even though the donated United Kingdom, i.svetunkov@lancaster.ac.uk, Victoria Grigorieva,
amounts are small, consistent with cause marketing campaigns, the campaigns Yana Salichova
are sustainable since the aggregate amounts received are significant over time.
Our experiments provide three main findings. First, push notifications have a The convergence of mobile telephony, Internet services, and personal computing
remarkably high effect on donation behavior in terms of the decision to donate as distorts the mobile devices market. This market can nowadays be considered as a
well as donation amounts, especially for idle users. Second, offering rebates as living ecosystem, where sales of one devices influence the sales of the others.
economic incentives are more effective than offering matching grants, in These days consumers tend to base their purchase decision not solely on the
particular for male consumers. Finally, while users are indifferent between brand loyalty towards a manufacturer but also on the familiarity with the
receiving their rewards now versus later, users that are offered a rebate respond software platform. For example, consumers owning Apple iPhones would rather
with greater alacrity when rewarded immediately rather than later. Our findings buy Apple iPad than a tablet of another competing company, because they are
have important implications for charitable organizations and application service familiar with the operating system and can enjoy the continuity. These
providers as well as for the design of cause marketing campaigns using the mobile connections between the devices create new patterns in the dynamics of market
channel. shares and should be taken into account when companies make marketing
decisions about the development of their devices and software. We propose a
2 - Cross-channel Spillovers and Cross-media Synergies in multivariate model that takes this complex dynamics into account. This approach
Omnichannel Advertising Response not only allows us to capture the interdependencies in the market of mobile
Min Tian, University of Wisconsin, 975 University Ave, Madison, devices, but also generates more accurate forecasts, which supports decision
WI, 53706, United States, mtian8@wisc.edu, Paul R. Hoban, making. We test our model on the dataset and compare its performance with
Neeraj Arora several other benchmark models, showing the advantages of the proposed
approach.
Effective management in the modern omnichannel environment, where firms
regularly advertise and sell products both online and offline, requires an 2 - The Impact of Economic Crises on Alliance Portfolio Composition
understanding of potential cross-channel spillovers and cross-media synergies. Tuba Yilmaz, Assistant Professor, BI Norwegian, Nydalsveien 37,
Cross-channel spillovers may occur when digital advertising influences offline Oslo, 0484, Norway, tuba.yilmaz@bi.no
shopping, and when traditional media influences online purchase behavior.
An important gap in the alliance literature is the investigation of how business
Cross-media synergies occur when response to advertising in one medium (i.e.,
cycles affect firms’ collaboration behavior. Though it is well known that firms
digital or traditional) is amplified or mitigated because of advertising in the other.
often use alliances to respond to uncertainty and share risks, little is known how
Using a large-scale, randomized field experiment, we explore the effects of
firms adjust alliance strategies in response to economic crises. When faced with
traditional (i.e., direct mail) and digital (i.e., retargeted display) advertising on
rapid, often unforeseen changes in their external environment, firms could need
online consideration and sales, as well as offline purchases. Results indicate
to adapt alliances throughout their alliance portfolio. Alliances can be one of the
significant spillover in online consideration; direct mail increases both the
mechanisms that help firms to reap the opportunities unleashed by the external
incidence and frequency of website visits. With respect to sales, we find significant
change. However, these external shocks often negatively affect the value and the
cross-channel spillover and cross-media synergy among digitally active
effectiveness of alliances and thus makes them more susceptible to failure. This
consumers. Retargeted display advertising increases both online and offline
research explores how firms adapt their alliance portfolio composition following
revenues. Interestingly, when direct mail is served in isolation, it increases offline
an economic crisis. This study then explores how the crisis differentially affect the
revenues, but at the expense of online sales. In contrast, when direct mail is
viability of different forms of alliances.
reinforced by retargeted display advertising, this channel switching behavior
disappears; both online and offline sales increase. Our findings highlight the need
to consider cross-channel spillovers and cross-media synergies to characterize
advertising response accurately.
3 - Platform Protection Intervention Effect in the Sharing Economy
Siliang Tong, Temple University, Temple University, Philadelphia,
PA, 19144, United States, jack.tong@temple.edu, Xueming Luo,
Lin Zhijie, Cheng Zhang
Despite the promise of sharing economy, information asymmetry still exists
where sellers possess more knowledge of product quality than buyers do. Thus,
the surge of sharing economy puts enormous pressures on platform reputation
management. While many platforms enact consumer protection policies such as
purchase insurance, empirical evidence regarding the mechanisms on how such
policy would take effect remains limited. This study exploits a rich natural
32

3 - Proleptic Market Analysis: Market Analysis Based on 2 - How Inequality Impacts Sales Team Performance?
Consumers’ Attention An Empirical Investigation
Daniel Ringel, Assistant Professor of Marketing, Kenan-Flagler Ashutosh R. Patil, University of Missouri, Columbia, Cornell-342,
Business School - UNC Chapel Hill, Campus Box 3490, Trulaske College of Business, Columbia, MO, 65211, United States,
McColl Building, Chapel Hill, NC, 27599-3490, United States, arpatil@yahoo.com, Niladri Syam, Sounak Chakraborty
DMR@unc.edu, Elham Maleki, Bernd Skiera The use of teams to organize work is very common and has become a mainstay
Market analysis provides insights into the competitive environment that firms for many organizations. Extant literature on sales teams has focused mainly on
operate in. Traditionally, the scope of market analysis is on products and their investigating team incentives and pay inequality in teams. In contrast, we focus
producers. Yet, producers are not the only firms active in markets. Firms like on understanding the effect of a critical and pervasive characteristic of sales
information providers and comparison platforms engage with consumers and teams, namely, performance inequality among team members. Surprisingly, and
affect their decision making. As such, non-producing firms can represent new in contrast to much of the literature that has focused on pay inequality, we find
opportunities but also threats to producers in a market. The scope of traditional that performance inequality can have a positive effect on group sales under
market analysis, however, is too narrow to capture such firms. Herein, the specific conditions. Specifically, performance inequality (e.g., the presence of a
authors propose a broader market analysis approach, called Proleptic Market ‘star’ salesperson in a sales team whose other members are ‘non-star’ salespeople)
Analysis. By combining new methods with a new unit of analysis, namely can be beneficial ifthe team quota is high, and thereby, challenging to achieve.
consumers’ attention, Proleptic Market Analysis is able to consider both producers This positive interaction of team inequality and team quota is new not only in the
and non-producing firms. To analyze markets based on consumers’ attention, the literature on salesforce management, but also in management and economics. We
authors draw on a new data source, namely organic search results of a search also find that a higher team quota adversely impacts the positive association
engine. The underlying idea is that what consumer search for reveals what they between individual sales and team sales. Finally, we also investigate an interesting
are interested in, and what they find in search results reveals who competes for 3-way interaction (among team’s sales quota, performance inequality, and
their attention. The authors use their new approach to study the retail banking individual performance) impacts the overall team performance. We present
market in Germany from 2015 to 2016. Based on the organic search results of several recommendations to managers on enhancing the performance of sales
902 market-defining keywords, covering over 4 million individual searches, the teams.
authors identify 596 firms that compete for consumer’s attention across 8
identified topics (i.e., submarkets). Of these 596 firms, 27% produce financial
products—yet, these producers only attract 14% of consumers’ attention. The
majority of consumers’ attention goes to non-producing firms that offer product n TD08
comparisons (29%) as well as news and information on financial products (23%).
The authors visualize their findings in a competitive market structure map to
show in which topics individual firms attract consumers’ attention, how much, Channels and Strategy
and who their closest competitors are in each topic.
Contributed Session
4 - The Effect of Pricing Competition on Consumer’s Demand and
Chair: Lena Hoeck, Ludwig-Maximilians-University Munich,
Manufacturers’ Performance
Geschwister-Scholl-Platz-1, Munich, Germany, hoeck@bwl.lmu.de
Sungtae Eun, Texas Tech University, Lubbock, TX, United States,
sungtae.eun@ttu.edu, Ben Chidmi 1 - Industry Informality and Marketing Channel Innovation Effects on
Sales Performance: A Multilevel Modelling
As reported by Statista Dossier (2016), the global male grooming market has
Sadrac Cénophat, Europa-Universitat Viadrina, Schwibbogengasse,
increased from approximately 16 billion US dollars in 2012 to 20 billion US
dollars in 2016 and the market is expected to reach almost 30 billion US dollars 3, Heilbronn, 74072, Germany, cenophat@europa-uni.de,
by 2024. The United States razor market is highly concentrated, with the top four Miriam Anja Lohrmann
manufacturers accounting for nearly 91% of all razor sales, excluding 7% sales While prior research has stressed the impact of marketing channel innovation
realized by private labels. Two companies -Procter & Gamble (the maker of (MCI) on firm performance, there is little empirical evidence or explanation for
Gillette) and Edgewell Personal (the maker of Schick)- make practically all of the the implications of industry informality. Prior research describes informality as a
branded razors (84%) in the United States, with respectively 55.7% and 28.2% shady underground, populated by substandard products and uncompetitive
market shares. The third and fourth companies (Idea Village and BIC USA) practices. Informality occurs due to the presence of unregistered firms within a
control only 3.6% and 3.5%, respectively. The razor market is one of the few particular industry. Studies suggest that the global informal economy consists of
markets where the private label market share hardly exceeds 7%. Furthermore, up to US$9 trillion worth of unregistered assets, and that unregistered firms make
the razor industry is characterized by new product development that allows up to 40% of the GDP in emerging markets. These figures suggest that informality
brands, like Gillette, to sell some of their razors for more than $5 per cartridge. may constitute a powerful force which have the potential to affect the positive
However, new entries in the market (Dollar Shave Club and Harry’s) have impact of MCI—i.e., the introduction of new or significantly improved delivery or
reshaped the price competition in this market. The objective of this analysis is to distribution methods for inputs, products, or services. Drawing on the life cycle
investigate the effect of pricing competition on consumer’s demand and theory of the firm, this paper develops and tests a multilevel model explaining the
manufacturers’ performance in the U.S. razor market. The methodology proceeds impact of MCI in industries with issues of informality. The analysis of 8,052 firms
as follows: First, we estimate a random coefficient logit demand model for a razor, operating in 26 industries in India reveals that, in industries with high issues of
using IRI data. Second, the demand results are used to estimate a menu of market informality, MCI is not effective among larger firms. The empirical evidence and
structures amongst razor manufacturers. this model will help managers understand and accurately predict their sales
performance when engaging in MCI in industries with issues of informality.
2 - Channel Choice Decisions for E-commerce in Consumer
n TD07 Goods Industry
Renuka Kamath, Professor, S.P. Jain Institute of Management
Research, Dadabhai Road, Munshi Nagar, Mumbai, 400058, India,
Sales & Salesforce Management II rkamath@spjimr.org, Sheila Roy, Nilendra Singh Pawar
Contributed Session E-commerce channels have increased the opportunities for market access for all
organizations. In emerging markets such as India, organizations access diverse
Chair: Ashutosh R. Patil, University of Missouri, Columbia,
consumers through a complex network of channel intermediaries. The channel
Cornell-342, Trulaske College of Business, University of Missouri, choice decision between channel configurations offline and through online
Columbia, MO, 65211, United States, arpatil@yahoo.com channels is an interesting area. Firms have developed innovative linkages in
1 - The Performance Measurement Trap dyadic relationships (manufactures as sellers on platforms) or as triads
J. Miguel Villas-Boas, University of California - Berkeley, (manufacturer, e-distributors and e-marketplaces) that impact the transaction cost
Berkeley, CA, 94720-1900, United States, of the relationship. The governance structures of these relationships, through
which firms outsource or build capacity for various transactions for e.g. order-
villas@haas.berkeley.edu, Dmitri Kuksov
booking, payments, warehousing etc. can be significantly different from those for
This paper investigates the effect of performance measurement on the optimal the traditional channel (off-line), for the same set of product and consumers. The
effort allocation by salespeople, when firms are concerned about retention of primary objective of the research is to study how organizations make choices
salespeople with higher abilities. It shows that introducing salespeople regarding their online channel configuration and governance structures. We
performance measurement may result in productivity, profit, and welfare losses identify the relative transaction costs when firms choose between online channel
when all market participants optimally respond to the expected information configurations and off-line channels. We seek to understand the decision making
provided by the measurement and the (ex-post) optimal retention efforts of the process of firms and the various transaction costs (explicit and implicit) associated
firm cannot be (ex-ante) contractually prohibited. In other words, the dynamic with various channel configurations. Due to the exploratory nature of study, the
inconsistency of the management problems of inducing the desired effort methodological approach of case study research permits a granular observation of
allocation by the salespeople and the subsequent firm’s objective to retain high this phenomenon. The methodology allows the in-depth investigation of a
ability salespeople may result in performance measurement yielding an inferior contemporary phenomenon involving inter-organizational relationships between
outcome. manufacturers, platforms and associated intermediaries within the real world
context to discover the rules of engagement between them. We intend studying
these through a multiple case study design of three firms.
33

3 - Service Marketing Strategy in an Automated World 2 - Upstream Effects of Selling Formats in Emerging Markets
Ming-Hui Huang, Distinguished Professor, National Taiwan Abhinav Uppal, University of Pennsylvania, 3730 Walnut Street,
University, 1 Sec 4, Roosevelt Road, Taipei, 10617, Taiwan, 727.6 JMHH, Philadelphia, PA, 19104, United States,
huangmh@ntu.edu.tw, Roland T Rust auppal@wharton.upenn.edu, Kinshuk Jerath, Jagmohan S. Raju
This paper explores and develops strategic applications of artificial intelligence In emerging markets, traditional retailers, typically characterized by small
(AI) in service marketing. AI, manifested by machines that exhibit aspects of neighborhood stores, follow a “mediated access” selling format in which they
human intelligence, is increasingly utilized in marketing, and today is a major stock products inside the stores away from direct access of customers. Under this
source of service innovation and revolution. For example, chatbots turn customer selling format, the retail stores are manned by shopkeepers who offer products to
service into self-service, big data AI applications provide personalized customers on demand. This allows the retailers the ability to push the demand for
recommendations to customers, cognitive technology offers idiosyncratic certain products within a category by selectively recommending them to their
solutions to complex service, and social robots engage customers in frontline customers. We build a game theoretic model to study the implications of this
interactions. We develop four AI-enabled service marketing strategies based on ability on profit sharing within the channel and how it affects the strategies of a
our four-intelligence framework. This framework specifies that there are four manufacturer that has the ability to offer multiple horizontally differentiated
intelligences that can be used to create competitive advantage: mechanical, products. We find that when the manufacturer offers full product variety, the
analytical, intuitive, and empathetic. The four intelligences are parallel as well as mediated access retailer is able to fully extract the extra surplus generated in the
hierarchical. The more complex, idiosyncratic, and emotional service is, the channel by its ability to recommend products to its customers. If this ability is
higher the level of AI intelligence required to create and deliver the service. Firms high, the manufacturer offers a reduced product variety to handicap the retailer
need to decide the optimal intelligence portfolio to stay competitive. Specifically, and share this extra surplus. In certain cases, the retailer commits to handicapping
the mechanical AI strategy suits any service that is simple, standardized, itself by switching to the direct access format in order to receive a larger product
repetitive, routine, and transactional; the analytical AI strategy provides decision variety from the manufacturer. The results continue to hold when the products
support for marketers to create value from systematic patterns from data; the offered by the manufacturer are asymmetric in terms of quality or marginal costs,
intuitive AI strategy makes decisions autonomously to create value; and the as long as this asymmetry is not very high.
empathetic AI strategy provides emotional support and emotional satisfaction to
customers. We conclude with a set of implications for marketers to formulate 3 - Decision Fatigue and Online Dynamic Pricing
service strategies that leverage the four intelligences. Richard Schaefer, Rutgers University, Rutgers Business School,
1 Washington Park, Newark, NJ, 07102, United States,
4 - App, Web or Trailer? How to Effectively Build TV Audiences under rschaefer@business.rutgers.edu
Multiscreen Behavior
Lena Hoeck, Ludwig-Maximilians-University Munich, How should an online retailer change its pricing policy based on the depth and
speed of a consumer’s product evaluation process? To investigate this topic, we
Geschwister-Scholl-Platz-1, Munich, Germany,
model pre-purchase deliberation for a multi-attribute product: here, the decision
hoeck@bwl.lmu.de, Martin Spann maker can determine whether and when to evaluate preference fit along each
One of the core challenges in the advertising-financed media industry is attracting attribute. Using this framework, we incorporate the psychological concept of
audiences. Publishers, such as tv broadcasters, invest significant resources to decision fatigue, in which a consumer’s deliberation difficulty depends on his
attract viewers, for example by advertising tv shows in online and offline number of recent evaluation decisions. We then investigate how an online retailer
channels. Among others, they are trying to leverage the growing use of should devise its pricing strategy with respect to fatigue. We determine when a
complementary digital devices (second screens) in conjunction with the seller should utilize a standard price-skimming strategy and when it can credibly
television, the first screen. In this research, we empirically study the effectiveness threaten future price increases. Furthermore, we determine the exact relationship
and interplay of first and second screen marketing channels on television viewing between price levels and decision fatigue, establishing when longer-lasting fatigue
activity. We use unique large-scale observational datasets from a large European yields more noticeable price changes across periods.
media company. These include individual television viewing behavior as well as
4 - Late Product Release: The Bright Side of Lost Sales
individual usage of television-related online content on e.g., the consumers’
desktop and mobile devices. We match the datasets on the basis of behavioral and Mushegh Harutyunyan, Assistant Professor of Marketing,
user characteristics. We find that both first and second screen touchpoints Nazarbayev University, 53 Kabanbay Batyr Ave, Astana, 010000,
influence the likelihood to tune into a specific television show and the duration of Kazakhstan, mushegh.harutyunyan@nu.edu.kz,
show viewing. We find differential effects of the timing of first and second screen Chakravarthi Narasimhan
touchpoints (i.e. prior, during, and post-show) and the interplay of the first and
When the competitor’s product release is earlier than that of the firm, many
second screen. We discuss implications for the design and planning of marketing
consumers may decide to buy the competitor’s product, rather than wait for the
in the media industry.
firm’s product release. Hence, to avoid losing customers, the firm might prefer to
also release its product early. In this paper, we show that, counterintuitively, the
firm may be better off by releasing its product late and allowing its competitor to
n TD09 saturate the early market. Intuitively, by doing so, the firm induces its less
committed customers to buy the competitor’s product, while the firm’s more
Room 239, Alter Hall “loyal” customers choose to wait for the firm’s product. When the firm releases its
product, the firm will have strong incentives to charge a high price to exploit the
Pricing and Competition segment of consumers who have been waiting for its product release, which will
Contributed Session induce the firm’s competitor to also charge a high price, i.e., price competition
will become alleviated, benefiting all firms. Furthermore, we show that the firm
Chair: Mushegh Harutyunyan, Washington University in St. Louis, can benefit if its competitor captures a large share of the early market, rather than
1 Brookings Dr, WUSTL, Seigle Hall, Room 307, St. Louis, MO, 63130, a small share. In other words, the firm can become better off if the competitor’s
United States, m.harutyunyan@wustl.edu market penetration increases. Our results suggest that the firm that is the first to
release its product can be better off by using penetration pricing strategy rather
1 - Buying an Input From a Competitor with a Production
than price skimming, because penetration pricing will help mitigate future price
Learning Curve competition, while price skimming can lead to more intense competition.
Matthew Selove, Chapman University, 1 University Drive, Orange,
CA, 92867, United States, mselove@gmail.com, Dominique Lauga
Many firms buy a production input from a competitor, but managers often worry
that this type of supply agreement could help the competitor develop a strategic
advantage. We develop a model in which two firms compete during two periods,
and in each period, the focal firm can buy an input either from its competitor or
from a third party. Buying from the competitor in the first period helps the
competitor move down its learning curve and produce the input at lower cost in
the second period. Such a cost reduction implies the competitor can credibly
threaten to set a lower goods market price if the focal firm buys its input from the
third party, which strengthens the competitor’s bargaining position and can
reduce the focal firm’s equilibrium profits. Despite concerns about weakening its
future bargaining position, the focal firm’s desire to avoid intense price
competition in the first period can cause it to make an even larger fixed payment
for the input than it would in the absence of a possible production breakthrough.
34
n TD10 4 - The Impact of Corporate Social Irresponsibility on Customer and

Shareholder Perception: A Comparison Between Six Countries
Room 605, Alter Hall Samuel Staebler, University of Cologne, Albertus-Magbus-Platz,
50923, Germany, staebler@wiso.uni-koeln.de, Marc Fischer
Corporate Social Responsibility II
Corporate Social Irresponsibility (CSI) is spread across the world. Volkswagen s
Contributed Session pollution crisis is just one exemplary crisis out of many that is covered in public
Chair: Samuel Staebler, University of Cologne, Albertus-Magnus-Platz, media. Such negative coverage can severely harm the trust people place in brands
and detrimentally impact financial performance measures. In line with these real
50923, Germany, staebler@wiso.uni-koeln.de
world developments, there has been extensive research on the effects of crises on
1 - The Socially Responsible Marketing Manager customer and firm related variables. Nonetheless, research has mostly ignored
Amir Grinstein, Associate Prof. of Marketing, Northeastern cross cultural differences. In order to mitigate the negative consequences of crises
University and VU Amsterdam, Boston, MA, United States, around the world, this study investigates crises across a wide range of countries.
a.grinstein@neu.edu, Peren Ozturan In the empirical setting, we cover all the CSI events that appeared in the leading
media outlets of six countries during the years 2008 to 2014. Our dataset
A growing, important business trend is for firms to engage in socially responsible comprises of more than 500 crisis events involving 227 brands from 12 industries.
practices. Meanwhile, the role of the marketing function and marketing Furthermore, we match this data with unique country-specific datasets covering
managers, and their contribution to firms, are attracting attention in the customer perceptions dimensions and shareholder perception from six countries.
marketing discipline. Interestingly however, the trend of social responsibility has To capture the effect of crisis events, we resort to the methodology of an event
not been integrated into the latter stream; thus we do not know much about the study. Our results show that CSI events have a negative impact on customer
value from having a socially responsible marketing manager. Using legitimacy perception in all countries. The negative consequences however, are driven by
theory as a theoretical framework, this research investigates the concept of a different moderators: For example, customers from countries who have high
socially responsible marketing manager, and tests its impact on marketing traditional and nationalistic values are more likely to protect their “own”
functions’ performance (a form of external legitimacy) and influence within the economy and are more likely to criticize foreign companies instead of national
firm (a form of internal legitimacy). Based on multiple empirical efforts companies. Furthermore, we identify different effect strengths for different types
(interviews, secondary data analysis, a survey, and an experiment), we find that, of crises (e.g., human rights issues, environmental issues and operating practices).
while socially responsible marketing managers are still far from mainstream, such Finally, we identify and discuss differences in the impact on stock return.
managers positively contribute to marketing functions’ performance and
influence within the firm. Additionally, this impact is enhanced when customers
are more interested in social responsibility and weakened when the marketing
manager is more experienced. n TD11
2 - Does it Pay to Be Virtuous? Examining Whether and Why Firms Room 606, Alter Hall
Benefit from Their Corporate Social Responsibility Initiatives
Dionne A. Nickerson, Doctoral Student, Georgia Institute of Digital Marketing IV
Technology (Scheller), 800 West Peachtree NW, Atlanta, GA, Contributed Session
30308, United States, dionne.nickerson@scheller.gatech.edu,
Chair: Sila Ada, Vienna University of Economics and Business,
Adithya Pattabhiramaiah, Michael Lowe
Romergasse 16/11, 1160, Wien, Australia, sila.ada@wu.ac.at
While corporate social responsibility (CSR) has become an integral part of brand 1 - When Enough Ad is Enough: Who Tolerates and Who Doesn’t?
strategy for most firms, the important question of whether CSR initiatives have
an impact on brand sales remains unanswered. This paper attempts to fill this gap,
Wreetabrata Kar, Assistant Professor, Krannert School of
while trying to reconcile seemingly contradictory viewpoints in the literature on Management, Purdue University, West Lafayette, IN, 47906,
the effect that CSR engagement has on firm performance. While meta-analyses United States, wkar@purdue.edu, Mohammad Saifur Rahman
show a small, positive effect of firm CSR engagement on firm financial Millions of users utilize the Internet content consumption on a regular basis.
performance, these studies have produced mixed results, where the effect is not While content drives engagement, ads displayed on the website is generally the
significant or negative, in some cases. While past research has argued for the most common source of revenue for a publisher. There is a considerable body of
importance of accounting for differences in the types of CSR engagement, this work on how ads can adversely affect retention on websites. However, there is a
aspect remains largely underexplored. This study makes the first attempt at lack of research on how ads impact satiation as a user progresses across multiple
documenting the potential influence of different types of CSR engagement on pages on a content website. We fill this research gap by utilizing a data set from a
brand sales. We distinguish between three types of CSR activities: correcting the content provider who is serving millions of users where we observe a user’s
negative impact of a brand’s business operations, compensating for the negative progression across multiple pages. We estimate the role of ads on the decay in
impact of a brand’s business operations without necessarily altering those user retention at different stages of progression on the site. Harnessing the
operations, and cultivating consumer goodwill despite being unrelated to any richness of the data, we explore how the consumption pattern and engagement
negative externality attributable to the brand’s business operations. To investigate with the website changes depending on whether the source of traffic to the
this relationship, we leverage a database of CSR press releases issued by several website is organic, inorganic or from social media. We further analyze how
top CPG brands and combine it with detailed sales data for those brands. We heterogeneity in device (mobile, tablets, and desktops) affects retention. Thus our
employ the synthetic control method to measure the causal effect of firms’ CSR research is focused on generating practical insights regarding the trade-off
announcements on brand sales. We find differential effects for the various CSR between monetization and user engagement in the short run and in the long run
activity types on sales response. We then proceed to explore the mechanism for content providers.
behind this effect under controlled experimental settings. Our experimental
results show that, conditional on brand reputation, CSR type influences 2 - Less is More: Ad Clutter and Advertiser Valuations of Websites
perceptions of brand genuineness and thereby attitudes towards the brand. This Sila Ada, WU Vienna University of Economics and Business,
work provides important insights for marketing managers looking to effectively Welthandelsplatz 1, Vienna, 1020, Austria, sila.ada@wu.ac.at,
incorporate CSR into their marketing strategy repertoire. Nadia Abou Nabout
3 - Green Means Go! The Role of CSR Appeals in Product Recalls of Despite its rapid growth, advertisers recently became reluctant to keep investing
Private Label Brands more budgets in display advertising due to persistent concerns about (1) the
Wesley Friske, Assistant Professor, Missouri State University, specific websites that the ads are displayed on, (2) viewability of display ads, and
901 S National Ave, Springfield, MO, 65897, United States, (3) websites being cluttered with ads. Among these concerns, ad clutter (i.e., the
WesleyFriske@MissouriState.edu, Kyung-Ah Byun, Mayukh Dass number of display ads that a website visitor is exposed to) is considered a major
hurdle for advertisers to overcome. Ad clutter exists because publishers (i.e.,
Private label brands attract consumers with the promise of delivering quality at a website owners and, thereby, content creators) aiming to increase revenue may
relatively lower price than national brands, and their contributions to retail store want to place more ads on their website. However, such behavior is often myopic
sales is increasing. It is important for managers to understand how to handle a due to (1) the risk of losing website visitors and (2) advertisers potentially
product crisis that affects private labels because consumer perceptions of product experiencing lower ad effectiveness, which might lead them to withdraw their ads
quality and economic value fall following recalls, which results in the loss of store from these websites. With this study, we aim to investigate website visitor
sales. This study investigates tactics that retailers and private label brand managers behavior as well as advertiser reactions towards ad clutter by studying its effect on
may use to recover from product recalls. The results of a functional data analysis ad effectiveness and advertiser valuations of websites utilizing outcomes of real-
demonstrate that private label sales decrease after product recalls, while product time bidding advertising auctions. We use two auction outcomes as proxies for
recalls in private labels do not seriously hurt category sales even in serious cases. advertiser valuations, namely demand (i.e., number of impressions purchased at a
However, when private label brands with CSR appeals are recalled, they specific website) and winning price (i.e., the cost-per-mille (CPM)). Our findings
experience a relatively quicker recovery than non-CSR products and positively will inform both advertiser and publisher decisions: Advertisers will be able to
influence post-recall category sales. Although price discounts have proven to be make better decisions regarding where to place their ads, understanding how ad
an effective recovery tactic for recalled national brands, our findings suggest that clutter affects ad effectiveness. Publishers will be able to decide how many ads to
cutting prices on recalled private labels does not help category sales recovery. place on their websites, understanding how ad clutter affects demand and
Rather, private label managers should rely on featured advertisements to help winning price, eventually composing their revenue.
category sales recovery following recalls. In sum, the results of the study have a
number of practical implications that provide ways for retailers and private label
brand managers to mitigate losses following product crises and subsequent recalls.
35
n TD12 3 - Repelling Invaders: The Effect of Incumbents’ Marketing

Strategies on Low-cost Entrants’ Market Exit Over Time
Room 745, Alter Hall Sina Aghaie, Darla Moore School of Business,
2117 Wallace Street, Apt A, Columbia, SC, 29201, United States,
Marketing Strategy – Value & Perceived Quality sina.aghaie@grad.moore.sc.edu, Carlos J.S. Lourenço,
Contributed Session Charles H. Noble
Chair: Sina Aghaie, Darla Moore School of Business, Columbia, SC, Proliferation of low-cost competitors has increasingly eroded traditional firms’
sina.aghaie@grad.moore.sc.edu, Carlos J.S. Lourenço, Charles H. Noble market share and profitability in recent decades. However, traditional firms are
still uncertain about how to respond to this new challenge. In this paper, the
1 - Modeling Strategies for Configuration of Interactive Platforms in authors study a common and important phenomenon - the marketing strategies
Co-creation of Value that incumbent firms may employ to drive new low-cost entrants (challenger) out
Kerimcan Ozcan, Marywood University, 2300 Adams Avenue, of the market. Specifically, they investigate how incumbents’ price, service
quality, and service convenience influence a new entrant’s exit decision. They test
Scranton, PA, 18509, United States, ozcan@marywood.edu
the hypotheses on a rich, multi-market longitudinal dataset from the US airline
In recent marketing literature, co-creation is defined as enactment of interactional industry and estimate a challenger’s time-to-exit using a split population hazard
creation across interactive system-environments (afforded by interactive model a type of survival model that can handle three types of challenger firms: (i)
platforms), that connect creational interactions with how experienced outcomes challengers that do leave the market during the observation period, (ii)
emerge from their underlying resourced capabilities. Interactive platforms as challengers that will eventually leave the market, but outside the observation
instantiations of agencial assemblages are composed of heterogeneous relations of period, and (iii) challengers that are unlikely to ever leave the market (with the
artifacts, processes, interfaces, and persons, implying interactional capacities that latter two types being right-censored observations). The challengers of the latter
bring about evolving patterns of interactional creation. In a digitalized world of type are ‘long-term survivors,’ in the sense that they are immune to and will not
interactions with rapidly evolving interfaces based on IoT, Big Data, artificial leave the market because of incumbents’ marketing activities but may still exit in
intelligence, and robotics, effective co-creation of value creation entails the far-future for other reasons. In contrast to prior research that has studied low-
configuring heterogeneous relations in platformed interactions that afford a cost entrants’ time-to-exit in a static environment, the authors apply a
multiplicity of value creating environments in the joint sphere of enactment of time-variant approach considering immediate and later post-entry stages. Instead
interactive value creation. Value is no longer just a function of product features of homogeneous results, they find that the magnitude and direction of the effects
and service attributes (i.e., offerings as “having” value), but emerges as a function vary over time. For instance, a substantial price-cut initially delays but will
of interactional creation of outcomes from resourced capabilities, and as accelerate an entrant’s exit decision later on. This result suggests that managers
experienced by actors. Moreover, actors are ‘interacted actors’, in contrast to the should be strategic in the type, timing, and intensity of their defensive responses
‘atomistic’ view of actors in neoclassical conceptions of markets. Organizations to a new low-cost entrant and offer valuable insights for practitioners to
can potentially situate an interactive platform anywhere in the system of value efficiently assign marketing expenditures to the activities that might send an
creational activities, be it on the side of facilitating actors (e.g., firms) or that of influential signal to the challenger and affect its future competitive behavior.
engaging actors (e.g., customers) with the key questions of (1) Where and how
can interactional value creation be made more co-creational? (2) How do
opportunities for value co-creation arise through the interactive platform, and
what are its implications for enterprises and users alike? We will discuss how n TD13
these prediction and control challenges can be addressed with synthetic modeling
approaches such as functional programming, deep learning, multiagent Room 746, Alter Hall
simulations, and topological data analysis, along with empirical methods such as Multi-Channel Marketing II
immersive clinical action-based research.
Contributed Session
2 - The Impact of Quality Gap on Market Share
Omer Cem Kutlubay, Rutgers University, 1 Washington Park Chair: Yimeng Li, University of East Anglia, Norwich, United Kingdom;
10th floor P.O. Box:23, Newark, NJ, 07102, United States, knn15zva@uea.ac.uk, Franco Mariuzzo, Nikolaos Korfiatis
omer.kutlubay@rutgers.edu, Serdar Yayla, Sengun Yeniyurt, 1 - Social Network Service Promotions vs. Targeted Promotions:
Goksel Yalcinkaya Exploring an Emerging Marketing Platform of Credit
In this study, the authors define Quality Gap as the difference between perceived Card Companies
and objective quality. According to Mitra and Golder (2006), there is a positive Soohyun Cho, Assistant Professor, Rutgers University, Newark, NJ,
relationship between two quality metrics. Objective quality has positive United States, scho@business.rutgers.edu, Liangfei Qiu,
contemporaneous and carryover impact on perceived quality. Moreover, the long- Subhajyoti Bandyopadhyay
term impact of objective quality on perceived quality is greater than its short-term
impact. Nonetheless, improvements to actual quality may not always be reflected In recent years, credit card companies and partner retailers have launched a new
in perceived quality (Mitra and Golder, 2006). Therefore, it is of paramount marketing platform aimed exclusively at their cardholders. This platform provides
importance for brands to be able to transform improvements in actual product either public promotion through social network services or targeted promotion
quality to an improvement in their customers’ perceptions to increase sales (Rust through company websites by providing customer with discounts or credits
et al., 2002 and Mitra and Golder, 2006). Further, considerable progress has been toward future purchases. In this paper, we present our game theoretical model
made in the perceived quality and performance (Aaker and Jacobson 1994; analyzing this emerging marketing platform and investigate the various ways in
Jacobson and Aaker, 1994; Mizik and Jacobson, 2003; and Srinivasan et al. 2009). which a monopolist credit card company (CC), working with two partner retailers
However, little attention has been paid to the impact of the quality gap and (one more competitive than the other) and a social network service (SNS), might
performance. Considering the findings on positive contemporaneous and give discounts to its cardholders. We then examine how these proposals would
carryover impact of objective quality on perceived quality, the authors expect that affect both the profits of both the CC and the retailers. Our analysis shows that
objective quality and perceived quality converge in the long term. Similarly, the CC can make a higher profit by running either 1) an SNS promotion with a
previous studies mention the positive link between perceived quality and less competitive company simultaneously with an SNS promotion with a more
performance. Hence, firms might need to consider the quality gap to highlight on competitive retailer or 2) an SNS promotion with a less competitive company
performance. Initial results indicate that quality gap has a negative effect on simultaneously with a targeted promotion with a more competitive retailer. We
market share in the longitudinal study between 2001 and 2014 by exploiting also analyze how the aforementioned platforms affect consumer surplus and
Ward’s Auto Yearbook and J.D. Power and Associates data sources. Similarly, social welfare and find that there is deviation between the CC’s preferred
offering high performing products in comparison to segment average (gap promotion strategies and the strategies that can maximize consumer surplus
between brand’s objective quality and segment average) negatively affects the because of the promotion-induced increase in the net price. Since the disutility
market share. However, the gap between brands’ perceived quality and segment caused by the price increase negatively affects social welfare, strategies aimed at
average has positive effect on market share. The authors believe that marketing maximizing the CC’s profit often run contrary to approaches that seek to
managers can optimize value creation and value appropriation expenditures by maximize social welfare effects. Moreover, considering the advertising effects for
adjusting the quality gap based on the results. the SNS, we also examine how the SNS’s increase in its revenue-generating rate
through advertising influences the CC’s choice of marketing platform, retailer’
profit, consumer surplus and social welfare. In a future study, we will expand this
work into a comparative examination of other price discrimination-based business
models, including online coupons.
36

2 - The Impact of Manufacturer Direct Channel Entry on the Level
and Volatility of Retailer Sales and Price n TD14
Els Breugelmans, Associate Professor, KU Leuven, Room 607, Alter Hall
Korte Nieuwstraat 13, Antwerp, 2000, Belgium,
els.breugelmans@kuleuven.be, Michiel Van Crombrugge, Machine Learning – Search Behavior & Social Media
Kathleen Cleeren, Scott Andrew Neslin Contributed Session
Multi-brand retailers are increasingly confronted with manufacturers opening up Chair: Kunpeng Zhang, University of Maryland, 4347 Van Munching
their own online direct sales channels, where end-consumers are offered the Hall, 4316, College park, MD, 20742, United States,
possibility to bypass the retail channel and buy their brands straight from the kzhang@rhsmith.umd.edu
manufacturing source. This surge in direct channel openings has the potential to
shake up the retail market in many ways. First, retailers may respond via for 1 - Content-based Model of Web Search Behavior:
instance price changes, as they are now finding themselves competing against An Application to TV Show Search
their own partner-suppliers. Second, also consumers may change their behavior, Jia Liu, Postdoctoral Researcher, Microsoft Research,
as they are offered yet another option in an ever-increasing roster of sales 750 Columbus Ave, APT 10R, Doctoral Program, New York, NY,
channels, which we capture by changes in retailer sales. Third, we not only 10027, United States, jiliu3@microsoft.com, Olivier Toubia,
investigate changes in the level of these metrics, but also study changes in their Shawndra Hill
volatility to assess the extent that retailers and consumers experiment, driven by
their mutual uncertainty in learning how to deal with the new player in the field. Consumers regularly interact with search engines to acquire information
Retailer price and sales volatility has, so far, been an overlooked phenomenon in matching their changing preferences for content by entering search queries and
marketing literature, despite its high importance. We use the pioneer entry of the clicking on the results. In this paper, we develop a flexible content-based search
online direct channel of a high-profile electronics manufacturer in Belgium as a model, based on Poisson Factorization and Topic model, that can collaboratively
unique natural field experiment to perform a before-and-after analysis for the 19 model users’ text-based search behaviors (typing a query), subsequent discrete
involved retailers and 34 involved categories. As a consequence, we not only look search behaviors (clicking on a link), and the content that users encounter during
at level and volatility measures of the two parties that are considered to be the search process, while also capturing changes/heterogeneity in users’
managerially the most relevant, but also inspect which category and retailer preferences underlying these search behaviors. We evaluate our modeling
characteristics may play a moderating role. To our knowledge, this study is the framework using large-scale Bing search logs on searches for TV shows. We
first to offer such comprehensive overview of all these possible effects following a examine how users’ search behaviors and underlying content preferences vary
direct channel entry. across time in our data (i.e., before, during, and after a show is aired). We show
that our content-based model can provide valuable insight into user query usage,
3 - Price Matching Guarantees an Equilibrium Analysis in Dual clicking behavior, and the relationship between the two. We also show that our
Channel Supply Chain model can improve predictions of consumer click-through behavior above and
Yuansheng Wei, School of Management, Fudan University, beyond Bing’s predictions (reflected by the position of links on the results page).
670 Guoshun Road, Yangpu District, Shanghai, 200433, China, Capturing the dynamics of user content preferences over time can especially
16110690031@fudan.edu.cn, Pei Huang improve prediction accuracy for TV shows for which changes in user search intent
are more likely around the time the show is aired. In addition to search engines,
Many firms now offer price matching guarantees (PMGs) whereby they promise our proposed model can also be applied by advertisers with their search
their consumers that any lower price offered elsewhere within a specific period campaigns data, to answer questions such as which ads to target to whom, on
will be matched. In practice, many suppliers complement their existing traditional which devices, and when.
retail channel with direct sales. However, extant literature on PMGs focus mainly
on competing retailers and ignore the price matching strategy between a dual 2 - Over Promise and Under Delivery in a Market with
channel supply chain members which is observed in the market. This paper Product Previews
contributes to the literature by conceptualizing the price competition within Dai Yao, Assistant Professor of Marketing, National University of
channel members and investigating the implication of PMGs in dual-channel Singapore, 15 Kent Ridge Drive, Singapore, 119245, Singapore,
supply chain. We model the impact of channel relative advantage (CRA) and dai.yao@nus.edu.sg, Kaiquan Xu
price sensitivity across channels (direct channel and retail channel) on
equilibrium PMGs choices of the supplier and the retailer. We demonstrate that In a market where customers preview a product before deciding to consume it,
the presence of PMGs as a Nash Equilibrium hinges on the two key factors and are creators of the products tempted to over promise in the previews, and
the PMGs prevails as the retailer’s strategical response to the supplier’s consequentially, under deliver in the actual products? We investigate the question
encroachment even when the wholesale price is set by the supplier. We show that using data from WeChat Media Platform, where writers regularly post articles to
the encroaching supplier should not unilaterally offer PMGs regardless of the attract readership and likings from the audience. Tipping is also available at the
retailer’s choice. The retailer optimally implements PMGs when the CRA for retail end of an article for readers to pay as they want to reward the writer. The data
channel is relatively high. What interest us is that both the supplier and the comprises 428 writers and 186,447 articles with previews authored by these
retailer would offer PMGs when the channel differentiation is large and the CRA writers between 1 January and 1 July in 2017 (previews in the form of a title, a
for retail channel is high. Finally, we show that PMGs implemented by retailer or cover image and an abstract), and their performances (i.e., readership, likes, and
both channel members in equilibrium benefits the channel by mitigating double tips). We develop a multimodal deep learning framework to detect over promise
marginalization problem. The results in our paper complement the findings in in the previews and under delivery in the products. We find existence of such
previous research on PMGs and develop important managerial insights on the behaviour among the writers, furthermore, it augments readership but
interactions between the supply chain members. undermines the chance of tipping.
4 - How do Information Strategy Online Lead to a Win-Win Situation 3 - Image Network and Interest Group a Heterogeneous Network
with Free Riding Problems Embedding Approach to Analyze Social Curation on Pinterest
Yimeng Li, PhD, University of East Anglia, 3 Cunningham Road, Kunpeng Zhang, University of Maryland, 4347 Van Munching
Norwich, NR58HG, United Kingdom, knn15zva@uea.ac.uk, Hall, 4316, College park, MD, 20742, United States,
Franco Mariuzzo, Nikolaos Korfiatis kzhang@rhsmith.umd.edu, Liye Ma, Baohong Sun
Recent foreclosures of high street retail shops further challenge the viability of Social curation has become an effective process for consumers to navigate
brick-and-mortar retailers in an era dominated by electronic commerce. Classic through the vast digital content to find product information that fits their
brick-and-mortar shops rely on the reputation of facilitating customer interests. However, little is known about the characteristics and implications of
understanding of a product through expert sales assistance. On the other hand, the social curation process, and there is little guidance on how brands should use
the internet allows sellers to operate online stores at lower cost with a structured social curation tools to achieve marketing goals. Using the popular image curation
provision of information. Online stores can also free-ride on the investment platform Pinterest.com as the empirical context, this research aims at
undertaken by physical stores, e.g. the provision of unit inspections to the understanding (i) how digital content are collected, classified and curated by
customer and personalized assistance, even he provides during his product search. users; (ii) what these activities reveal about the latent preference of users. To do
Studying competition in the information collection stage and purchase stage so, we leverage heterogeneous network embedding, a powerful technique
between the two channels, we find that under certain conditions the occurrence recently developed in machine learning. We treat images, curation keywords, and
of free-riding is ultimately beneficial to brick-and-mortar retailers, not the users as nodes in a heterogeneous network, where edges are defined by users’
expected online sellers. Information gathered through these two stages can also collection and curation actions. The heterogeneous network embedding
lead to cross-channel browse-and-switch behavior. This paper demonstrates that technique captures structural and semantic correlation among multiple types of
this behavior always intensifies competition and does harm to both sellers’ profits, node in large-scale networks. Aligning image and user networks in the same
however in certain conditions the e-tailer can take the strategy of affecting space allows us to relate image classification with user interests and the context
consumers’ switching cost to soften competition between the sellers, minimizing revealed in curations. Applying the approach to a large data set of users and
damage to their own profits. images from Pinterest.com, our results show the images are effectively organized
based on features and user curation. The underlying structure and relationship
revealed from the embedding analysis show that users grouped into same clusters
tend to curate similar images. We further demonstrate how the technique can be
used to assess brand perception and to customize image design to improve user
acceptance.
37
n TD15 4 - Package Downsizing and Consumer (In)Attention

Clarice Yulai Zhao, University of Toronto,
Room 603, Alter Hall 105 St George St, Toronto, ON, M5S 2E8, Canada,
clarice.zhao15@rotman.utoronto.ca
CB - Decision-making
Package downsizing, an indirect method to increase price, is commonly observed
Contributed Session in consumer packaged goods markets. Manufacturers reduce the volume of
Chair: Clarice Yulai Zhao, University of Toronto, 105 St. George Street, product per package whereby the new size replaces the old one, but do not
reduce the price. In this paper, I examine how consumer purchase behaviour
Toronto, ON, M5S 2E8, Canada, clarice.zhao15@rotman.utoronto.ca
changes after the package size decreases. Do consumers take the product size into
1 - Influence of Product Aesthetics on Hedonic Adaptation and Test account when making purchase decisions? If there is heterogeneity in consumers’
on the Effect of Savoring attentiveness, what proportion of the population is attentive? Lastly, how does
Mengyi Xu, Tongji University, Shanghai, China, consumer’s attentiveness correlate with their demographics, purchase frequency,
rhea217@163.com, Xin Zheng, Jie Zhang and other characteristics? The answers to these questions would help researchers
and managers improve forecasting and category management. For example, a
In a highly diversified and segmented market, product aesthetics has been an vital manufacturer would like to know about the effects of downsizing on product
tool to catch consumers’ eyes for most marketers. It’s true that visual aesthetics sales and its profitability. Given that each product is targeting at a different
can create values for consumers, more or less. However, enhanced aesthetics does segment of consumers, the downsizing strategy would differ by the attentiveness
not always lead to enhanced satisfaction and repurchase intention. To examine of its targeting consumers. Similarly, a retailer who concerns about sales across all
the influence of aesthetics design on hedonic adaptation, two groups of competing brands need to consider the effect of downsizing on consumers’ brand
participants were asked to eat cookies intermittently during the time of a song choice to coordinate their pricing and promotion strategies among these items.
and recorded their degree of happiness after eating each cookie. One group had
highly aesthetic icing cookies, while another group had plain icing. We also
conducted a similar experiment using durable goods (water glass). In addition to
immediate consumption scenarios, we also wonder that if delaying the actual n TD16
consuming and leaving participants to savor the upcoming event, will the degree
and speed of hedonic adaptation progress change? To elucidate the effect of Room 231, Alter Hall
savoring, a experiment which is identical to the cookies one apart from subtly
delaying consumption was conducted. The results indicate that highly aesthetic
UGC II - Online Reviews
product actually can accelerate hedonic adaptation, especially for non-durable Contributed Session
goods. While savoring can help slow down hedonic adaptation. Furthermore, this
effect is more significant for highly aesthetic product. This study may shed some Chair: Angela Xia Liu, Tsinghua University, Weilun Building 353, SEM,
light on the relationship between product visual design and consumers’ Beijing, 100084, China, liux@sem.tsinghua.edu.cn
repurchase intention. 1 - Consumer Response to Affective Traits of Visual UGC
2 - The Effectiveness of Product Selling Preannouncement Nima Y Jalali, Assistant Professor of Marketing, University of North
Zhe Zhang, Fudan University, No.670 Guoshun Road, Shanghai, Carolina-Charlotte, 9201 University City Blvd, Charlotte, NC,
200433, China, zhezhang@fudan.edu.cn 28223, United States, nima.jalali@uncc.edu, Purushottam Papatla
In the online marketing context, the product preannouncement has become more Visual user-generated content (VUGC) like photos of products posted by
and more popular for online shopping platforms and merchants. We define consumers on sites like Instagram is steadily increasing. Online retailers have
Product-Selling-Preannouncement (PSPA) as a marketing communication therefore begun to curate thumbnail galleries of VUGC that can help consumers
strategy for ready-to-sell product that the online merchants leverage through the browse through several products. Since the galleries cannot provide detailed
same online channel before the selling period. Using the empirical data from an e- information on specific products, retailers make the thumbnails clickable for an
commerce website, we analyzed the effect of PSPA from the product level, enlarged view of the photo. If clicked again, the enlarged photo leads the visitor
consumer level, and product-consumer level. Furthermore, we carried out an to the product’s page. In order to gain sales, therefore, online retailers need to
experimential measure to explain the influence mechanism based on construal curate galleries with photos that when enlarged can stimulate visitor interest in
level theory and perceived risk. The results show that the PSPA in the online proceeding to product pages. There are however few insights in this regard. This is
shopping environment can boost product sales and consumers who browsing the the issue that we investigate empirically by examining whether the affective traits
PSPA are more likely to buy the product. Additionally, our study shows that the of a curated photo can stimulate consumer interest in the product that it carries.
difference of consumers’ psychological distance along with perceived risk between Our investigation is based on the assumption that the response to a photo on
the preannouncement period and the selling period can explain the influence social media (e.g., number of likes on Instagram) represents not only the effects of
mechanism of the PSPA. its physical attributes (e.g., color composition, objects in the photo) and the
audience size (e.g., number of followers of the person posting the photo) but also
3 - Millennials and Financial Well-being: The Effects of Promotion of its affective traits. This assumption allows us to isolate and investigate the
Focus, Prevention Focus, Pride, Embarrassment and effects of the affective traits on consumer response to more than 4500 user-
Financial Literacy generated photos curated by 18 online retailers. Our findings suggest that
Jane McKay-Nesbitt, Associate Professor, Bryant University, affective traits of VUGC do affect consumer response to the products that they
contain.
1150 Douglas Pike, Smithfield, RI, 02917, United States,
jmckayne@bryant.edu, Namita Bhatnagar 2 - The Effects of Post Attribute Matching on Liking Behavior
This research examines the effects of regulatory (promotion, prevention) focus on Kaichi Saito, Meiji-Gakuin University, 1-2-37 Shirokanedai,
consumers’ financial well-being and the roles that self-directed positive and Minato-ku, Tokyo, 108-8636, Japan, ksaito@eco.meijigakuin.ac.jp,
negative emotions (pride, embarrassment), and cognitive financial literacy have Atsuko Inoue, Takashi Teramoto, Jeff Inman, Akira Shimizu
on those relationships. Results of a lab experiment with 235 millennials enrolled In this era of social media, “likes” given to user-generated content can promote
in a U.S. university, revealed that emotions mediate the relationship between brand sales. The authors explore what and how post attributes affect recipients’
regulatory focus and financial well-being. While a promotion orientation is not liking behavior using online communication history data collected at a social
directly related to perceptions of financial well-being, there is an indirect positive media site. The results show that a recipient is more likely to provide likes to posts
relationship between promotion focus and financial well-being via heightened that are similar to his/her previous posts in terms of content (topic and valence)
feelings of pride in personal finances. On the other hand, prevention focus’ and writing style (text length and emoji length). For example, a post with a lot of
negative association with financial well-being is fully mediated through a emojis is more likable for emoji users while it is less likable for non-emoji users.
heightened sense of embarrassment related to personal finances. Moreover, while Such effects of post attribute matching exist independent of the effect of
there is an indirect effect of promotion focus on financial well-being through homophily (i.e., similarity between a recipient and a sender in their personal
cognitive financial literacy, this relationship is not found for prevention focus. attributes). The results also show that these effects are strongly moderated by
These results further our understanding of Regulatory Focus Theory; new online social ties. Specifically, the effects of post attribute matching as well as the
information is provided regarding the emotional and cognitive mechanisms that homophily effects disappear when making a liking decision on a post from a
mediate relationships between chronic regulatory focus and other attitudes. In followee. This study expands the horizons of consumer interaction research by
addition this work has important practical implications as it suggests that shedding light on liking behavior on social media and contributes to the literature
attention should be paid to factors that may influence the accessibility of chronic by providing empirical evidence on what and how post attributes affect liking.
regulatory focus, and ultimately one’s sense of financial well-being.
38
INFORMS MARKETING SCIENCE – 2018 FA01
Friday, 8:30AM - 10:00AM

3 - Ratings, Reviews, and Recessions: How Business Cycles Shape
Online Opinion
Thomas Scholdra, Doctoral Student, University of Bremen,
Hochschulring 4, Bremen, 28359, Germany,
scholdra@uni-bremen.de
n FA01
Online reviews, usually consisting of a numerical rating and a textual content,
provide opportunities for consumers to seek and share product information Room 32, Alter Hall
before and after purchase. Anticipating and expressing consequences of buying
actions may be particularly crucial consumer activities when the level of
Consumer Motivations in Financial Decision-making
uncertainty increases. While past research has examined the effects of economic General Session
uncertainty induced by business cycle fluctuations on consumer purchase
behavior, these studies typically focus on changes in demand or consumer choice. Chair: Gil Appel, University of Southern California, Los Angeles, CA,
Research on the effects of varying macroeconomic conditions on consumers’ pre- 90089, United States, gappel@marshall.usc.edu
and post-purchase behavior is sparse. Drawing on data of online reviews from 24 1 - Categorizing Spending as Exceptional Decreases Consumer
product categories over a 15-year period, the goal of this study is twofold: First, Motivation to Repay
investigating whether, and to what extent, online reviews structurally change Simon Blanchard, Georgetown University, McDonough School Of
with macroeconomic fluctuations. Second, analyzing whether, and how,
Business, 37th & O Street NW, Washington, DC, 20057,
consumers’ perception of helpful online reviews is linked to varying
macroeconomic conditions. Using text-mining and time-series techniques allows United States, sjb247@georgetown.edu, Remi Trudel, Keri Kettle
to disentangle temporary and permanent effects of business cycle fluctuations on People tend to categorize expenditures as exceptional (uncommon, infrequent) or
numerical and textual review components. Furthermore, quantifying ordinary (common, frequent). Financial planning programs (e.g., Mint.com)
asymmetries in depth and speed of changes across economic up- and downturns employ algorithms that differentiate exceptional versus ordinary spending and
is possible. Understanding how the creation and perception of online reviews may notify clients when exceptional spending is detected. Intuitively, these
change with macroeconomic conditions may help companies and consumers to notifications should motivate better financial decisions by bringing attention to
leverage the information provided on online review platforms. the exceptional spending. However, we show that such notifications can backfire
because consumers also categorize income as exceptional and ordinary and prefer
4 - Behind the Online User Generated Content the Role of to repay extraordinary debt with extraordinary income. Using a dataset of 3,777
Residential Mobility customers’ spending across categories (e.g., groceries, clothing, debt repayments),
Angela Xia Liu, Associate Professor, Tsinghua University, we show that consumers may be less motivated to repay their credit cards when
Weilun Building 353, SEM, Beijing, 100084, China, an unusual spending notification is received while the consumer experiences
liux@sem.tsinghua.edu.cn extraordinary spending. Then, we show that this occurs consumers are less
motivated to repay debts that they perceive as being due to exceptional (versus
Past research on consumer generated content on the social media has largely
ordinary) expenditures and that this lack of motivation occurs of beliefs in the
ignore one fact, that online content could be driven and shaped by an important
acceptability in postponing the payment of extraordinary debts with ordinary
socioecological factor—residential mobility. Residential mobility changes one’s
income. Finally, with a field study with recent tax return filers, we show that
interpersonal environments (Oishi, 2014) and thus can potentially change
some income source perceptions as either ordinary and extraordinary are
interpersonal communication. In this study, we examined whether and how
malleable, such that by framing income as ordinary can increase consumer
residential mobility drives people to engage in online content creation and
intentions to repay their ordinary debt and reduce spending.
increase the wom effectiveness. Using a large sample of data provided by Yelp, we
analyze how the residential mobility influences the creation of online review and 2 - Why I Share My Possessions: Motivations to Share Affect
the topics of the review, which in turn influence the effectiveness of the content. Customer Retention and Pricing
This research sheds light on the socioecological drivers of user generated content Yanyan Li, Columbia University, New York, NY, United States,
and how companies can identity consumers and markets to create more targeted
yl3220@gsb.columbia.edu, Jaeyeon Chung, Gita Johar,
WOM program.
Oded Netzer, Mathew Pearson
The consumer behavior literature has examined the antecedents and
n TD17
consequences of consumer motivation using experimental research paradigms
and shed light on many theoretical facets of motivation. While some of these
findings can be applied to consumer welfare, this research has not inspired much
Room 31, Alter Hall application by practitioners. This could be a result of the difficulty in uncovering
Panel Session: ISMS Code of Conduct Town Hall motivations and examining their impact for specific firms. The present research
Discussion puts forth a practical technique by which firms can extract consumer motivations
from customer text responses. Specifically, we extract motivations from 25,290
Panel Session hosts who list properties on the Airbnb platform by mining their text responses to
the question, “why did you start hosting?”. We find that Airbnb hosts are driven
Chair: Sandy Jap, Emory University, Atlanta, GA, sjap@emory.edu by three principle motivations - the motivation “to earn cash,” “to share beauty,”
1 - ISMS Code of Conduct Town Hall Discussion and “to meet people.” We find that these motivations have downstream
Moderator: Sandy Jap, Emory University, Atlanta, GA, consequences for hosts’ engagement with the platform and likelihood of staying
sjap@emory.edu on the platform. We use different analytical tools including machine learning and
natural language processing, “buy-till-you-die” latent attrition model and lab
Discussion about ISMS Code of Conduct experiments. These findings suggest that firms can leverage these motivations in
Panelist: Leigh McAlister, University of Texas, Austin, TX, their own advertising by attracting the right “type” of customer, which could also
leigh.Mcalister@mccombs.utexas.edu dictate firm revenue.
Barbara Kahn, University of Pennsylvania, Philadelphia, PA, 3 - Generosity or Sacrifice – Which Signal Derives Higher
kahn@wharton.upenn.edu Monetary Donations
Gene Anderson, Syracuse University, Syracuse, NY, Gil Peleg, University of the Negev, Beersheba, Israel,
genea@syr.edu Gilpel@post.bgu.ac.il, Oded Lowengart, Danny Shapira
Dan Airely, Duke University, Durham, NC, dan@danariely.com Often donors take into account the social recognition component as part of the
decision-making process regarding the level of contribution they make. Since
societies value the economic value of the donation, as well as the benefactors’
sacrifice (or effort), beneficiaries can incentivize donors by publishing their
donations (and effort) as a signal to society. In this study, we analyzed various
signaling procedures that trigger different social reward schemes in order to gain
better fundraising outcomes. We developed a pseudo principal-agent model to
reveal the best strategy for beneficiaries when they use society’s reward as a
motivator for monetary donation. We considered three social reward schemes in
our model: surreptitious donations, generosity signals, and sacrifice signals. The
model yielded counter-intuitive trade-offs as the donor’s wealth become a
moderator for social reward scheme. We conducted a confirmatory lab
experiment to examine the model’s assertions.
39
FA02 INFORMS MARKETING SCIENCE – 2018

4 - I Need a Hero: Lower Financial Well-being Increases 3 - A/B Testing
Interest in Superheroes Eduardo Azevedo, University of Pennsylvania, Wharton School of
Gil Appel, University of Southern California, Marshall School of Business, 3620 Locust Walk, Philadelphia, PA, 19104,
Business, Los Angeles, CA, 90089, United States, United States, eazevedo@wharton.upenn.edu, Alex Deng,
gappel@marshall.usc.edu, Eesha Sharma, Stephanie Tully Jose Montiel-Olea, Justin Roa, Glen Weyl
The superhero industry is large and growing, amassing billions of dollars each A/B tests are increasingly popular in business, policy, and academia to evaluate
year. Despite the vast popularity of superheroes, existing consumer research is the efficacy of innovations. This raises the question of how to evaluate
silent with respect to factors contributing to their success. The current research innovations, measure the value of experimentation, and invest experimentation
documents the novel phenomenon that lower financial well-being increases resources efficiently. We develop a model to answer these questions. We find that,
interest in superheroes. We suggest that superheroes represent a beacon of hope when the distribution of gains is thin-tailed, so that most of the gains come from
for those facing adversity and that this feature is particularly attractive to those typical incremental innovations, the standard approach of running very large
experiencing lower financial well-being. Through the analysis of Facebook and experiments is optimal. However, when the distribution of gains is fat-tailed, with
Google data and controlled laboratory experiments, we demonstrate the much of the gains coming from a few outlier innovations, a lean experimentation
relationship between lower financial well-being and increased preference for of trying more innovations is optimal. We apply our model to data on the A/B
superheroes. We show that this effect results from the sense of hope that testing of a major cloud product, the Bing search engine. We find that the
superheroes inspire, is moderated by the extent to which consumers feel their distribution of gains is highly skewed, and that simple changes to
financial situation is unfair or undeserved, and is specific to financial (vs. general) experimentation can substantially increase performance.
well-being. These results add to the growing literature on how consumers’
financial situation influences consumer behavior, demonstrating that financial 4 - Information Diffusion, Social Interactions, and Collective Action
well-being is not simply a proxy for general well-being but rather a construct with Angel Iglesias, University of Pennsylvania, PA, United States,
distinctive consequences. Beyond their relevance to the expansive entertainment angelig@sas.upenn.edu, Camilo Garcia-Jimeno, Pinar Yildirim
industry, our findings may have implications for other contexts in which How is collective action shaped by social interactions, and how are social
consumers may seek superhero-type figures such as when voting for political interactions mediated by the availability of networked information technologies?
candidates. To answer these questions, we study the Temperance Crusade, the first instance of
organized political mobilization by women in the U.S. This wave of protest
activity against liquor dealers spread between the winter of 1873 and the summer
n FA02 of 1874, covering more than 800 towns in 29 states. We first provide causal
evidence of social interactions driving the diffusion of the protest wave, and
Room 33, Alter Hall estimate the roles played by information traveling along information networks -
specifically rail and telegraph. We do this relying on exogenous variation in the
Digital Economy V: Large Scale Social Interaction rail network links generated by railroad worker strikes and railroad accidents. We
General Session also develop an event-study methodology to estimate the complementarity
between rail and telegraph networks in driving the spread of the Crusade. We
Chair: Dean Eckles, MIT, Cambridge, MA, 02139, United States, find that railroad and telegraph-mediated information about neighboring protest
informs@deaneckles.com activity were main drivers of the diffusion of the protest movement. Using
variation in the types of protest activities of neighboring towns and in the
1 - Social Influence and Reciprocity in Online Gift Giving
aggregate patterns of the diffusion process, we also find suggestive evidence of
Dean Eckles, MIT, Cambridge, MA, 02139, United States, social learning as the mechanism behind the effect of information on protest
informs@deaneckles.com, René F Kizilcec, Eytan Bakshy, adoption.
Moira Burke
Giving gifts is a fundamental part of human relationships that is being affected by
technology. The Internet enables people to give at the last minute and over long
distances, and to observe friends giving and receiving gifts. How online gift giving
n FA03
spreads in social networks is therefore important to understand. We examine 1.5 Room 34, Alter Hall
million gift exchanges on Facebook and show that receiving a gift causes
individuals to be 56% more likely to give a gift in the future. Additional surveys Causal Inference I: Consumer and Firm Response to
show that online gift giving was more socially acceptable to those who learned Quality and Cost Changes
about it by observing friends’ participation instead of a non-social
encouragement. Most receivers pay the gift forward instead of reciprocating General Session
directly online, although surveys revealed additional instances of direct Chair: Bryan K Bollinger, Duke Fuqua School of Business, Durham,
reciprocity, where the initial gifting occurred offline. Thus, social influence
NC, 27708, United States, bryan.bollinger@duke.edu
promotes the spread of online gifting, which both complements and substitutes
for offline gifting. 1 - Advertising Content and its Relation to Other Elements of the
Marketing Mix
2 - p-Hacking in A/B Testing Elisabeth Honka, UCLA Anderson School of Management, 110
Christophe Van den Bulte, University of Pennsylvania, Marketing Westwood Plaza, Gold Hall, Suite B520, Los Angeles, CA, 90024,
Department 759 JMHH, 3730 Walnut Street, Philadelphia, PA, United States, elisabeth.honka@anderson.ucla.edu, Yi-Lin Tsai
19104-6340, United States, vdbulte@wharton.upenn.edu,
Ron Berman, Leo Pekelis, Aisling Scott Using data from the auto insurance industry, we comprehensively describe
advertising content and its relation to two other elements of the marketing mix,
A/B testing platforms have made it easy for businesses and other organizations to namely, product (quality) and pricing. Our unique main data consist of the
run online experiments, perform statistical analyses, and assess treatment effects. creative files for all advertisements placed by all auto insurance companies on TV,
As these platforms offer flexibility in how experiments are managed, decision the Internet or in magazines in the U.S. between 2001 and 2016. We employ a
makers may stop experiments earlier or later than proper statistical validity team of research assistants to code the presence or absence of 18 informational
requires, possibly because they are overly eager to obtain significant results. Such cues in each advertisement. We supplement these main data with data containing
behavior may result in invalid test conclusions and financial losses. We investigate online reviews of auto insurance companies, data containing the number of
whether online A/B experimenters indeed behave in this manner, more complaints filed with state insurance commissioners, and data on all rate change
specifically whether they “p-hack” by stopping their experiment based on the p- filings submitted by auto insurance companies between 2008 and 2013. We start
value of the effect. Our data comprise 2,101 A/B tests from a leading online with a detailed description of the advertising content data investigating different
platform, and track the size and significance level of the effect on every day that advertising content mixes companies employ, how these differ across advertising
the experiment is running. We apply a regression discontinuity design to hazard channels, and across time. Then we describe whether and how insurance
modeling. This allows us to estimate the causal effect of reaching a particular p- companies change advertising messages when product quality and rates change.
value on stopping vs. continuing the experiment. We find that experimenters
indeed p-hack, at least for positive effects on lift, the key metric in the A/B tests 2 - The Impact of Soda Taxation
we study. In addition, experimenters p-hack more if the lift is mildly positive Song Yao, Duke University, 1 Towerview Drive, P.O. Box 90120,
rather than strongly positive. Finally, a false discovery rate (FDR) analysis is used Durham, NC, 27708, United States, song.yao@duke.edu,
to quantify to what extent p-hacking inflates the fraction of false positives beyond Stephan Seiler, Anna Tuchman
the nominal rate.
Abstract not available.
40

3 - Learning-by-Doing in Solar Photovoltaic Installations 3 - Leveraging Patients’ Social Networks to Improve Tuberculosis
Bryan K Bollinger, Duke Fuqua School of Business, Detection in India: A Field Experiment
100 Fuqua Drive, Durham, NC, 27708, United States, Pradeep Chintagunta, University of Chicago,
bryan.bollinger@duke.edu, Kenneth Gillingham 5625 S Blackstone Avenue, Chicago, IL, 60637, United States,
The solar photovoltaic (PV) industry in the United States has been the recipient of pradeep.chintagunta@ChicagoBooth.edu, Jessica Goldenberg,
billions of dollars of subsidies, often motivated by environmental externalities and Mario Macis
firm spillovers from learning-by-doing (LBD) in the installation of the technology. The under-detection of TB represents a key challenge for health officials in many
Using a dynamic model of both demand and supply, this paper investigates developing countries. In this paper, we explore the use of incentives to encourage
installation cost reductions due to LBD using comprehensive data on all solar PV peer referrals, focusing on a specific community group with unique potential to
installations in California between 2002 to 2012, during the development of the identify those in need of treatment - those currently undergoing treatment
PV market in California. themselves. Specifically, we present results from a field experiment conducted in
partnership with Operation ASHA, an NGO that runs about 200 DOTS centers
across India. Our study compares the effects of different types of incentives to
n FA04 encourage TB patients to refer people from within their social networks for TB
screening and testing. We vary the conditionality of the incentives
Room 35, Alter Hall (‘unconditional’ and ‘conditional’ incentives), the method of outreach (“peer-to-
peer outreach” or “provider promotional visits”) and whether the new suspects
Social Influence and the Adoption of Novel (Life know who named them (‘known referrer’ and ‘anonymous referrer’ conditions).
Critical) Products in Emerging Markets Preliminary results indicate that current patients have useful private information
about others in their social network who need treatment, and that financial
General Session incentives overcome barriers that otherwise prevent this information from being
shared.
Chair: Rajesh Chandy, London Business School, London, NW14SA,
United Kingdom, rchandy@london.edu
1 - Can Friends Seed More Buzz?
K Sudhir, Yale University, School of Management, n FA05
P.O. Box 208200, New Haven, CT, 06520-8200, United States, Room 232, Alter Hall
k.sudhir@yale.edu, Vineet Kumar
Mobile, Algorithm, and Artificial Intelligence (AI)
A critical element of word of mouth (WOM) marketing (aka. buzz marketing) is
to identify central actors with high degree in the social network to serve as seeds. Session II: Modeling Customer Mobile Experience in
But seed identification typically requires data on the full network structure, Omnichannel Shopping
which is often unavailable. We propose WOM seeding strategies motivated by the
friendship paradox to get higher degree nodes without knowing network Invited Session
structure. But whether well-connected nodes generate enough WOM is an Chair: Debashish Ghose, Temple University, Philadelphia, PA, 19122,
empirical question. We develop and estimate a model of WOM and adoption United States, dghose@temple.edu
using data on microfinance adoption across 49 villages in India for which we
know the complete social networks. Counterfactuals show that the proposed Co-Chair: Xueming Luo, Temple University, Philadelphia, PA, 19122,
seeding improves adoption over random seeding by about 15%, relative to United States, luoxm@temple.edu
random seeding. Remarkably, it even improves over opinion leader seeding by 6-
1 - “Mobile to Store” Promotion Effect on Omni-Channel Spending:
7%.
A Randomized Field Experiment
2 - Lock Me Up: Examining the Role of Product Design in Loans for Debashish Ghose, Temple University, Philadelphia, PA,
Entrepreneurs in Ghana United States, dghose@temple.edu, Xueming Luo, Jack Tong,
Stephen J. Anderson, Stanford University, Stanford GSB, Takeshi Moriguchi
655 Knight Way, Stanford, CA, 94305, United States, Because of the convenience and seamless experience of mobile nearby search in
sjanderson@stanford.edu, Rajesh Chandy, Om Narasimhan omnichannel shopping, 80% customers express the interests to search product
Poor access to finance is widely viewed as one of the biggest obstacles to the inventory at physical stores on their mobile when planning a visit . Agile
growth of small businesses in emerging markets. By allowing small scale omnichannel marketers capture this unique micro-moment of mobile search for
entrepreneurs to purchase productivity enhancing assets, improved access to offline store inventory (we name it “Search-to-Go”, similar to the term of “Want-
finance can raise firm performance and prosperity. Yet most studies on the to-Go” micro-moment by Google) and steer customers with promotions to
adoption of loans by entrepreneurs in emerging markets find adoption rates of convert the mobile search and store visit intention to purchase decision (we name
these products to be strikingly low. This study examines the role of product design this mobile behavioral targeting promotion: “Mobile to Store” promotion). By
in the context of micro-finance loans. We develop a loan product that is designed collaborating with Muji, a Japanese life-style retail company which sells a variety
to address a crucial reason for the non-adoption of micro-finance loans: pressure of high quality household and consumer goods at over 700 locations worldwide.
to divert. Pressure to divert refers to the tendency on the part of the entrepreneur We run a large-scale randomized field experiment (between Feb 10, 2017 & Apr
to allocate the loan proceeds to a purpose that is different from that for which the 17, 2017) with 22,000 customers to test the effectiveness of “Mobile-to-Store”
loan was originally secured. Pressures to divert loan proceeds can be internal promotion on driving spending of omnichannel customers at “Search-to-Go”
(e.g., due to temptation) or external (e.g., due to family demands). We argue that micro-moment.
restricting an entrepreneur’s investment by requiring him or her to dedicate the
2 - Driving towards Purchase: Investigating Consumers’ Search
loan proceeds ex-ante to a specific firm asset (through a “locked” product) will
lead to higher adoption than offering traditional cash loans which impose no Patterns on an Automobile Mobile App
constraints on how loan funds are used (through an “unlocked” product). This is Jingcun Cao, Indiana University Bloomington, 1309 E. 10th Street,
possible despite the optimal qualities of cash (e.g., fungibility, divisibility, Bloomington, IN, 47405, United States, jingcao@indiana.edu,
liquidity). Moreover, we hypothesize that the increase in adoption of locked loans Pradeep K Chintagunta, Shibo Li
will be driven by a segment of “frailty conscious” customers - entrepreneurs who
With the prevalence of mobile devices, consumers are choosing to search and
recognize their susceptibility to give in to pressures and divert money from
shop on their mobile apps. While past studies in the search literature mostly focus
business to nonbusiness purposes. We test these predictions by implementing a
on consumer search behavior given a static choice set, little is known about their
randomized controlled trial with 2,000 business clients of a large Ghanaian bank
search patterns when facing a dynamically changing product list. In this study, we
over a two-year period. Through a random lottery, half the entrepreneurs
use data from a mobile app selling used cars to study search behavior that spans
running small businesses were offered the opportunity to take up a locked loan
several sessions. A feature of such search is that the set of products available
product (treatment group), while the other half were offered an unlocked loan
changes over time as exiting cars are sold and fresh supplies are added to the site.
product (control group). Our findings are twofold. First, the likelihood of
We focus on the subset of browsers who make a purchase and trace the “tap-
adopting a loan is significantly higher for entrepreneurs offered the locked asset
stream” of these users on cars they search. Our data include the attributes of the
product. Second, this main effect in adoption rates is largely due to the influx of
cars searched, the mobile device used (iPhone or Andriod), etc. At the same time,
frailty conscious customers who, recognizing their susceptibility to diversion
we also observe the list of available cars to the consumers each time they search
pressures, tend to prefer the new locked loan product - and would otherwise shy
for cars on the site. We find that consumers engage in extensive search prior to
away from adopting a traditional cash (unlocked) loan. The results of this study
making a purchase decision. While one subset of consumers demonstrates
highlight how product innovation can drive demand for financial services by
“convergence” to the various attributes of the purchased car over the items
entrepreneurs in emerging markets. In doing so, this study contributes to the
searched, another subset demonstrates such a convergence only for the price
burgeoning literature on the adoption of innovation among emerging market
attribute. Further, consumers in this latter group make the decision to purchase
customers, and on the drivers of growth among emerging market firms.
the car chosen during their very first session browsing that car even though these
consumers often revisit sites of cars that they previously browsed. We then
provide a descriptive model of the factors influencing the various stages in the
consumer’s search and purchase process.
41

3 - A Structural Model of Mobile App Adoption and Multichannel entry on various outcomes for taxi drivers’. Specifically, our data enables us to
Choice of Purchase explore whether and to what extent the number of trips, income of taxi drivers,
Xian Gu, University of Maryland-College Park, 3429 Tulane Drive, hailing behaviors and traffic conditions (e.g. inferred by speed of the vehicles)
have decreased and/or improved with entry. We use a regression discontinuity
Apt 34, Hyattsville, MD, 20783, United States,
model to examine the consequences of the Uber entry on the taxi drivers’ work
xian.gu@rhsmith.umd.edu productivity (e.g. hourly income) and hailing behaviors (e.g. wide or narrow
Consumers’ multi-channel shopping is a widely observed phenomenon. From a search). We also examine how the time of a day (e.g. morning commuting hours)
firm’s perspective, understanding consumers’ channel choice and purchase and location characteristics (e.g. airport, tourist area) moderate the effects of Uber
decision is critical for their revenue. Furthermore, mobile applications (apps) have entry.
become a popular shopping channel for firms to engage with customers, provide
services, and impact customer spending and loyalty. Therefore, another key
4 - Repelling Invaders: The Effect of Incumbents’ Marketing
question to answer is how the introduction of this new channel (i.e., mobile apps) Strategies on Low-cost Entrants’ Market Exit Over Time
impact consumer cross-channel shopping behavior. Using data from a leading sina aghaie, PhD Candidate, Darla Moore School of Business,
hospitality firm covering a four-year period, we develop a integrated dynamic 2117 Wallace street APT A, Columbia, SC, 29201, United States,
structural model to investigate consumers’ decision to adopt mobile applications, sina.aghaie@grad.moore.sc.edu, Carlos J.S. Lourenço,
and its subsequent impacts on their decisions to purchase using alternative Charles H. Noble
shopping channels. With counterfactuals we examine the impact of firm’s
decision not to introduce an app and availability of app service on customer Proliferation of low-cost competitors has increasingly eroded traditional firms’
spending. market share and profitability in recent decades. However, traditional firms are
still uncertain about how to respond to this new challenge. In this paper, the
authors study a common and important phenomenon - the marketing strategies
that incumbent firms may employ to drive new low-cost entrants (challenger) out
n FA06 of the market. Specifically, they investigate how incumbents’ price, service
quality, and service convenience influence a new entrant’s exit decision. They test
Room 234, Alter Hall the hypotheses on a rich, multi-market longitudinal dataset from the US airline
Analysis of Markets II – Incentives & Entry industry and estimate a challenger’s time-to-exit using a split population hazard
model a type of survival model that can handle three types of challenger firms: (i)
Contributed Session challengers that do leave the market during the observation period, (ii)
challengers that will eventually leave the market, but outside the observation
Chair: Sina Aghaie, University of South Carolina, period, and (iii) challengers that are unlikely to ever leave the market (with the
2117 Wallace ßtreet Apt A, Columbia, SC, 29201, United States, latter two types being right-censored observations). The challengers of the latter
sina.aghaie@grad.moore.sc.edu type are ‘long-term survivors,’ in the sense that they are immune to and will not
1 - Marketing Elasticities for Sales Incentives at the Point of Sale as leave the market because of incumbents’ marketing activities but may still exit in
the far-future for other reasons. In contrast to prior research that has studied low-
Well as for Online and Offline Advertising in the Book Market
cost entrants’ time-to-exit in a static environment, the authors apply a
Cord Otten, University of Hamburg, Moorweidenstr. 8, Hamburg, time-variant approach considering immediate and later post-entry stages. Instead
20148, Germany, cord.otten@uni-hamburg.de, Michel Clement of homogeneous results, they find that the magnitude and direction of the effects
Effect sizes of sales incentives at the Point-of-Sale (POS) in comparison to general vary over time. For instance, a substantial price-cut initially delays but will
offline and online advertising are not well understood. Both offline and online accelerate an entrant’s exit decision later on. This result suggests that managers
advertising received much attention in the marketing literature. This resulted in should be strategic in the type, timing, and intensity of their defensive responses
multiple meta-analyses that demonstrate their effectiveness to stimulate demand. to a new low-cost entrant and offer valuable insights for practitioners to
Understanding the relative effect sizes of advertising and POS sales incentives is efficiently assign marketing expenditures to the activities that might send an
particularly important in the media industry. Customers are uncertain about the influential signal to the challenger and affect its future competitive behavior.
value of a product before actual consumption. In this regard, advertising may
reduce this uncertainty or simply raise awareness of a product in the first place.
On the contrary, the high uncertainty may be associated with impulse decisions
that may be influenced at the shelf. Consequently, managers are interested how n FA07
to allocate investments between general advertising to stimulate demand and Room 237, Alter Hall
more “push” style strategies at the POS. In cooperation with a publisher we
estimated a market response model in which we relate offline and online Search Engine Marketing
advertising expenditures and promotion incentives paid to retailers to the sales of
all 467 books published by the cooperating publisher in 2016. We find that offline
Contributed Session
advertising and sales incentives at the POS have similar elasticity magnitudes of Chair: Sebastian Schubach, University of Passau, Innstrasse 27, Passau,
around 0.08, each. The relationship of online advertising on the contrary is not Germany, sebastian.schubach@uni-passau.de
associated with additional sales. We advance the academic literature by providing
evidence for the continuing importance of sales incentives at the POS. Managers 1 - Keyword Selection Strategies in Search Engine Optimization:
are reminded of the importance of push strategies in the physical world. How Relevant is Relevance?
Mayank Nagpal, PhD Student, Penn State University,
2 - Technology Incentives and Service Quality the Case of 421 Business Building, University Park, PA, 16802, United States,
Taxis and Uber mfn5101@psu.edu, Andrew Petersen
Meng Liu, Massachusetts Institute of Technology, 100 Main Street,
Sloan Room 412, Cambridge, MA, 02142, United States, Search Engine Marketing (SEM) consists of efforts by a firm to increase clicks to
their website through Sponsored Search Advertising (SSA) and Search Engine
mengliu@mit.edu, Erik Brynjolfsson, Jason Dowlatabadi
Optimization (SEO). To date, research in Marketing has focused more on SSA
Moral hazard is prevalent in market places, likely leading to market inefficiency relative to SEO. This seems surprising given that organic search results are
or even market failure. This paper studies how technology affects agent incentive considered more trustworthy, account for the majority of the clicks, and firms
of quality provision, based on an online-offline comparison of taxis and Uber. We spend significantly more on SEO than on SSA ($65B vs. $35B in the US in 2016).
find asymmetric effects through comparing routing behaviors of taxi and Uber In order to create content for SEO to maximize organic clicks, managers need to
drivers. Taxi drivers detour more (relative to Uber drivers) on routes that are identify appropriate keywords on which their content will be focused. Currently,
longer in distance, that have lower expected subsequent pickup probability, and most managers use simple heuristics to identify appropriate keywords and then
that are taken mostly by non-local riders. Uber drivers detour more on routes write relevant content about those keywords. However, it is unclear whether
with greater surge pricing. We demonstrate that these effects are due to moral these heuristics actually are effective techniques for SEO. In this paper we build a
hazard, instead of driver selection or difference in navigation technologies. We framework which provides model-based guidance to SEO practitioners for
further highlight and disentangle important mechanisms —- the usual tech- keyword selection and web content creation. It is often thought that content
enabled disciplinary devices (monitoring and rating) that increase moral hazard relevance is a key factor to improve the effectiveness of SEO. We find, however,
cost are effective but only to a certain degree, while tech-aided efficient matching that while content relevance is an important criteria in a consumer’s organic click
of platform sides that decreases moral hazard incentive can play an important decision, improving content relevance regardless of the keyword selected may not
role. always be effective as search engines only reward content relevance when
ranking links under certain conditions. Specifically, we find that when the online
3 - Impact of Entry of Uber on the Taxi Industry authority of a website is more (less) than the average online authority of its
SunAh Kim, Assistant Professor, Concordia University, 1450 Guy competitors, then focusing content on more broad (specific) keywords is effective
St., Montreal, QC, H3H 0A1, Canada, sunah.kim@concordia.ca, in improving organic rank.
Pradeep Chintagunta, Jia Li
We empirically examine whether, and to what extent, entry of a ride-sharing
program (e.g. Uber) affects taxis in a large city. Using a unique and
comprehensive dataset that contains all taxis’ trip information (e.g. time and
location stamps of trip starting and ending points) and hailing information (e.g.
GPS data) from one of the big cities in China, we examine the impact of Uber
42

2 - Consumer Click Through Behavior Across Devices in
Paid Search Advertising n FA08
Chongyu Lu, Assistant Professor, Pace University, 1 Pace Plaza, Room 238, Alter Hall
New York, NY, 10038, United States, clu@pace.edu, Yuxing Du
Consumer Choice and Consumption
The paper investigates how consumer click through behavior with paid search ads
differs across devices (i.e., smartphone vs. desktop vs. tablet). We attempt to Contributed Session
determine: (1) whether and how smartphone users differ from desktop users in Chair: Takuya Satomura, Keio University, Faculty of Business and
terms of their tendency to click on the top paid search ad; (2) whether and how
Commerce, 2-15-45 Mita, Minato-ku Tokyo, 108-8345, Japan,
smartphone and desktop users differ in their sensitivity to ad position change; (3)
whether tablet users are more like smartphone users or desktop users when it satomura@fbc.keio.ac.jp
comes to clicking through paid search ads. By leveraging Google AdWords data 1 - Does Ethnicity Influence Beer Consumption and Brand Choice?
from twenty paid search advertisers, we conduct a single-paper meta-analysis to Matthew A. Looney, Graduate Student, Texas Tech University,
establish generalizable empirical regularities. We find that, for unbranded searches 5403 28th Street, Lubbock, TX, 79407, United States,
(i.e., queries without the focal advertiser’s brand name), smartphone users matthew.looney@ttu.edu, Benaissa Chidmi
(compared to desktop users) are on average more likely to click on the top paid
search ad and are more sensitive to ad position change. Such differences, The beer industry in the US represents more than $350 billion dollars of total
however, do not exist for branded searches (i.e., queries with the focal advertiser’s economic impact (2016). This makes the industry one of the largest consumer
brand name). Tablet users are more similar to smartphone users when it comes to product sectors in America. As a category of consumer goods, beer is one of the
both tendency to click on the top paid search ad and sensitivity to ad position most dynamically changing products in the country. The industry responds
change. We discuss the managerial implications of these cross-device behavioral quickly to changes in consumer preference and shifting consumer demographics.
differences for paid search advertising. The continued ability to understand and predict shifting consumer demand is
paramount to the industries’ ability to continue to innovate and selectively appeal
3 - Post Purchase Search Engine Marketing to the heterogeneous consumer. It is well known that consumer demographics
Qianyun Zhang, New York University, 44 West 4th Street, New play a key role in determining consumer preference. Lopez and Matschke (2012)
York, NY, 10012, United States, qz411@nyu.edu, Shawndra Hill, examine consumer preference for beer, in characteristic space, using market level
David Rothschild data. The authors assume a heterogeneous agent model with age and income
variation across consumers. Consistent with expectations, they find a strong
Though consumer behavior in response to search engine marketing has been relationship between increased age and income and lower sensitivity to price.
studied extensively, few efforts have been made to understand how consumers However, the study omits other relevant consumer demographic variables, such
search and respond to ads post purchase. This is in part due to the fact that as ethnicity. This study seeks to understand more deeply how additional
purchases are difficult to track and link to search queries. Thus, it is unsurprising consumer characteristics influence preference for beer; and in particular, how
that advertisers have been targeting consumers on search engines similarly ethnicity influences beer consumption and brand choice. The methodological
regardless of the heterogeneity in their search intents and context. Advertising to approach taken in this study is to estimate a differentiated demand for beer using
current customers the same way as to prospective customers inevitably leads to a random coefficients discrete choice model. IRI Brand level data will be used as
wasteful and inefficient marketing. Employing a unique dataset that combines well as consumer level demographic data from the Current Population Survey.
both search query and purchase data, we examine consumers’ searching behavior
and response to search engine marketing after purchase. We study large 2 - Decision Rule Evolution in Multistage Dyadic Choice
advertising campaigns for two popular technology products. We find that over Kee Yeun Lee, Assistant Professor, The Hong Kong Polytechnic
half of the branded keyword searches come from consumers who already University, 8/F Li Ka Shing Tower, MM Department, Hung Hom,
purchased, and that advertising response varies based on whether searchers are Kowloon, Hong Kong, keeyeun.lee@polyu.edu.hk,
pre or post purchase. In general, post-purchase searchers are less likely to click on
Fred M. Feinberg, Elizabeth Bruch
focal brand ads (i.e., they are less responsive to ads for products they already
own). However, post-purchase searchers are still responsive to advertising, and Consumers interact online to explore everything from office supplies to life
much more likely to click on ads for complementary products (i.e., they are more partners. As they do, their evaluative criteria evolve, often due to feedback from
responsive to ads for relevant products other than the focal product). Our findings the environment or other users. A key aspect of such interactions is their “staged”
offer unique academic contributions regarding consumer behavior along with nature: we click, gather information, compare, then potentially purchase (for a
practical implications for how platform should market post-purchase targeting product) or initiate personal contact. To address this intrinsic evolution, we
and how marketers should advertise to customers post purchase. develop a multi-stage dyadic choice model with dynamic decision rules, calibrated
on data from a major online dating firm consisting of two distinct phases:
4 - Leveraging Browsing Behavior for Enhanced Bidding Strategies in browsing potential profiles, then writing messages to a promising subset. The data
Search Engine Advertising provide a unique opportunity to explore how decision rules evolve not only
Sebastian Schubach, University of Passau, Innstrasse 27, Passau, temporally, but as a function of dyadic interaction, e.g., receiving a return
Germany, sebastian.schubach@uni-passau.de, Jan H. Schumann, message. Potentially noncompensatory behavior is addressed via piecewise linear
Alexander Bleier splines with multiple changepoints, while a non-homogeneous Hidden Markov
Model (HMM) captures decision rule dynamics relative to users’ latent states,
New technologies in paid search advertising (SEA) allow firms to adjust their thereby providing a potential account of users learning and strategic behavior in a
keyword bidding based on tracked behaviors of individual consumers in their dyadic choice context.
online stores. A popular way how firms use this information is to influence the
position in which their ads appear, based on individual consumers’ progress in the 3 - The Wait is Worth it – The Effect of Payment Depreciation on
purchase funnel before visiting a search engine. In this regard, current industry Consumption in Short Temporal Separations
practice suggests placing higher bids (for higher ad positions) on search queries Shivendra Pandey, Assistant Professor, Indian Institute of
from consumers in later stages of the purchase decision process. Marketing Management Rohtak, # 41/9J house, M.D. University Campus,
theory, however, suggests the exact opposite, i.e., placing higher bids on search
Rohtak, India, shivendra_p@rediffmail.com
queries from consumers in earlier funnel stages, due to their heightened
sensitivity to rank-ordered choice alternatives. Based on a field experiment and Existing research on payment depreciation examines the impact of this
observational data, we demonstrate that advertisers should indeed align their phenomenon in temporal separation of more than three weeks but researchers
bidding strategies with marketing theory. In particular, we find consumers in have neglected to examine the decay of sunk costs in short temporal separations
earlier funnel stages to exhibit higher click-through rates for search ads in higher of less than three weeks. The investigation of the effect of payment depreciation
positions than consumers in later stages. Given that post-click conversion rates on consumer behaviour for short temporal seperations is crucial for e-tailers as
are independent of ads’ positions, firms can increase their SEA effectiveness by the payment and delivery of products is usually separated only by short durations
targeting early- instead of later-stage consumers with higher bids. Our work adds of less than three weeks. With two experiments, the present study examines the
to extant research on position effects in SEA as well as personalization and occurrence of payment depreciation in a go versus no-go condition for temporal
provides meaningful and actionable implications for firms’ SEA strategies. separation of three days, one week and two weeks. The results indicate the
existence of the phenomenon in temporal separation of even three days. The
results further indicate a step-like attenuation of sunk cost with differential
payment depreciation occurring with one week separation. The second
experiment examined the impact of payment depreciation according to the
payment methods, i.e., credit, debit and cash-on-delivery. The results indicate
maximum payment depreciation in cash-on-delivery mode followed by debit
cards. As an implication, retailers can vary the order delivery time with due
attention to payment mode to minimise order cancellations due to delayed
delivery.
43

4 - A Duration Model of Customers’ Repeated Usage of 3 - Bundling and Two-part Pricing under Demand Uncertainty
Multiple Services Sreya Kolay, Assistant Professor, University of California, Irvine,
Takuya Satomura, Professor, Keio University, 2-15-45 Mita, Irvine, CA, 92697, United States, skolay@uci.edu,
Minato-ku, Tokyo, 108-8345, Japan, satomura@fbc.keio.ac.jp Rajeev Kumar Tyagi
Service firms need to retain their customers and to make customers keep using Pricing mechanisms like two-part pricing or bundling are ubiquitous in the
their services. For these purposes, service firms seek to understand the customers’ marketplace. While the former involves charging a consumer an upfront fixed fee
repeated usage behavior of their services. In this research, we focus on the and a per unit price on the units consumed of the product, the latter involves
customer behavior in the service industry, in which customer uses multiple offering a consumer a fixed quantity of the product at a fixed price. For example,
services repeatedly. Moreover, the customer, in this industry, uses each service in massage spas and fitness clubs sometimes offer a monthly fee and price per
a different interpurchase time, and she can use multiple services at the same session, or offer a monthly fee that comes with a fixed number of sessions. Prior
moment. It follows that the customer uses only one service at one time, but she literature has compared the profitability and consumer welfare implications of
uses multiple services at another time. We propose the duration model for these mechanisms under scenarios where consumers face no demand uncertainty.
customers’ repeated use of multiple services. The proposed model is based on the In reality, consumers routinely need to make their payment decision in advance
competing risk model, which assumes multiple episodes continue to survive until of their actual consumption while under substantial uncertainty about their
one of them ends for the first time. The proposed model also accommodates the future consumption needs. We incorporate demand uncertainty in analyzing the
heterogeneity of customers’ preferences for service usage. We apply the proposed relative profitability and consumer welfare implications of these two mechanisms,
duration model to the historical data of customers’ service usage from hair salon and show some interesting results.
industry. The choices of services during the period are heterogeneous within the
customer. She gets her hair only cut at one time but dyed and cut at other times.
The choices of services are also heterogeneous between the customers. Some of
the customers might use an only one service all the time, but others might use n FA10
multiple services. The longitudinal customer data is applied to our proposed
model. The effects of marketing variables and individual specific variables on the Room 605, Alter Hall
service usage are presented and discussed. Customer Loyalty
Contributed Session
n FA09 Chair: Junzhou Zhang, Old Dominion University, 4809 Killam Ave,
Apt 2, Norfolk, VA, 23508, United States, jzhan001@odu.edu
Room 239, Alter Hall 1 - Leveraging Limited Loyalty Programs using Competitor
Pricing Strategies – Bundling Based Targeting
Wayne Taylor, Southern Methodist University, Dallas, TX, 75275,
Contributed Session United States, wjtaylor@smu.edu, Brett Hollenbeck
Chair: Sreya Kolay, University of California, 8 Vega Court, Irvine, CA, This paper uses a new dataset from a Fortune 500 specialty retailer to fill an
92617, United States, sreya.kolay@gmail.com important gap in the study of loyalty program effectiveness by examining the
1 - Market Characteristics and Licensing Incentives in Tied-goods interaction between the loyalty program and competitive structure. We use
Markets: An Application to the Single-serve Coffee detailed, individual-level transaction data to analyze how purchase behavior both
System Industry before and after joining a loyalty program depends on the spatial relationship
among customer, store, and competitor locations. This research provides insight
Shaojun Qin, University of Minnesota, 4-351 Carl School of
into the degree to which a loyalty program’s effectiveness can be attributed to
Management, 321 - 19th Avenue South, Minneapolis, MN, 55454, stealing business from competitors versus increasing customer demand.
United States, qinxx113@umn.edu, Pradeep Chintagunta, Furthermore, this loyalty program is unique in that the program discounts are
Maria Ana Vitorino earned and applied on only a single category of the firm’s goods. This distinct
This paper studies the licensing incentives for firms selling tied-goods. We study framework allows us to also study whether the loyalty program and the
how different market characteristics affect incumbents’ and entrants’ incentives competitive structure causes spillovers into other category purchases. We use this
for entering a licensing agreement that allows the entrants to sell components rich analysis to suggest how targeted marketing can leverage a store’s competitive
that are compatible with the incumbent’s primary good. We develop a structural structure in order to maximize profits.
model of demand and supply for tied-goods and estimate it using data from the 2 - Close But No Cigar: The Joint Impact of Goal Type and Goal
single-serve coffee system industry. Using the model, we solve for the Completion Status on Consumer’ Post-goal-completion Behavior
counterfactual market equilibria under different market conditions. We find that
Junzhou Zhang, Old Dominion University, Norfolk, VA,
incumbents and entrants are more likely to enter a licensing agreement when
consumers place higher value on variety, when the incumbent has a higher United States, jzhan001@odu.edu, Yuping Liu-Thompkins
installed base for coffee machines, and when the number of existing competitors Goal pursuit represents an important psychological mechanism under loyalty
is large. Also, the likelihood of reaching a licensing agreement goes down if the programs. Although academic research on loyalty programs has examined the
discrepancy in the quality of coffee pods between the incumbent and the entrant extent to which consumers succeed or fail in reward goal pursuit (Kivetz et al.
is high. 2006; Koo and Fishbach 2012), insufficient attention has been paid to the
consequences of such successes or failures (Dreze and Nunes 2011; Wang et al.
2 - Seller-driven, Customer-driven or Hybrid Bundling?
2016). Addressing this gap, we utilized data from a major airline’s multi-tiered
A Study of Relative Attractiveness for Buyers and Sellers loyalty program to examine the effect of goal completion status on individuals’
R. Venkatesh, Professor, University of Pittsburgh, 332 Mervis Hall, effort toward their subsequent goals, and how maintenance versus attainment
Pittsburgh, PA, 15260, United States, rvenkat@katz.pitt.edu, goal types moderate this relationship. Analyzing 5,719 program members’ flight
Ashutosh Prasad, Vijay Mahajan activities from 2014 to 2017, we found (1) a linear effect under the maintenance
goal, such that the more one completed his/her previous goal, the more effort
Bundling has long been seen a strategy in which a seller decides to offer two or
he/she will invest in the subsequent goal cycle; and (2) a reverse U-shaped effect
more products as a specially-priced package. Here the seller has full control on the
under the attainment goal, such that substantial goal achievement in the previous
make-up of the bundle. The current study is motivated by growing use of two
goal cycle creates a surprising hampering effect on subsequent goal pursuit.
alternative strategies in the marketplace. New York Philharmonic
Instead, moderate achievement of the previous goal leads to the most effort
follows customer-driven bundling in which a customer can form one’s own
invested in subsequent goal pursuit. We explain our results using counterfactual
bundle of three or more performances. Chicago’s CityPASS is a form of hybrid
thinking (Medvec et al. 1995). Specifically, the counterfactual alternative for
bundling in which the seller offers a five-attraction bundle (out of seven
consumers with a maintenance goal is the possibility of losing their previous
attractions), in which the seller determines three attractions and the customer
status regardless of goal achievement status. In contrast, consumers’
picks one from each of two pairs of attractions. Our model has a monopolist seller
counterfactual alternative under an achievement goal depends on how far they
with a 3-product portfolio of complements and/or substitutes. Surplus-
have surpassed the original goal, creating a counter-intuitive unhappiness effect
maximizing customers have heterogeneous tastes and a budget constraint that
when one greatly surpasses the goal and becomes overly ambitious.
restricts their consumption to two products at the most. The study examines three
questions: (i) Under what product-market conditions do the strategies yield
similar profits for the seller? (ii) When profits diverge, which strategy is optimal
and when? (iii) What are welfare and surplus implications of the alternative
strategies? Pricing and bundle design are integral to answering the above
questions. Illustrative findings: Customer-driven bundling diminishes the
traditional role of the bundle as an effective surplus-capturing device. The
“required” product under hybrid bundling is not the one most favorably valued.
The study’s implications, research limitations and future research directions are
presented.
44

3 - Brand Loyalty Driven Price Promotions chain level. Using the outcomes, we identify the always-discounting chains and
Dan Horsky, Professor (ret.), University of Rochester, 500 Wilson brands, as well as often price-changers in both brand and chain level. We also
Blv, University of Rochester, Rochester, NY, 14627, United States, identify the constantly-advertisers or impulsive advertisers in brand and chain
level. Furthermore, we use the dynamic-hierarchical structure of the model to
danhorsky4@gmail.com, Polis Pavlidis
predict the marketing mix variables of all the brands, by only predicting the
Recent theoretical results suggest that the use of price promotions by profit overall price dynamics of the FMCG market. We also investigate the effect of a
maximizing manufacturers of frequently purchased consumer goods may stem price shock (like a price war) in the market level and chain level on the prices of
from the existence of the consumer phenomenon of brand loyalty. A price individual brands. The aim is to extend the empirical study towards different
promotion by a brand clearly also attracts consumers who otherwise would have product categories as well as regional dependent price-dynamics.
bought another brand or not bought in the category at all. When brand loyalty
exists some of these brand purchasers will develop a loyalty, a transient increase 3 - Assessing Strategic Customer Behavior under
in utility, such that when the brand resumes its regular high price they will buy it Bounded Rationality
again.The theoretical results indicate that if consumer loyalty is strong enough it Jihoon Cho, Kansas State University, 1301 Lovers Lane,
can make price promotions lead to profits which are higher than those attained Manhattan, KS, 66506, United States, jihoonch@ksu.edu,
with an optimal single price. We thus investigate whether the frequency of Anocha Aribarg, Puneet Manchanda
offering price promotions by a brand is positively impacted by the magnitude of
its consumer loyalty. We do so with brands from twenty product categories. We Firms often offer free product or service to meet (or exceed) customer
use a MCMC algorithm that handles the estimation of all twenty categories expectations and elicit pleasant surprise. But these costly efforts can hurt the
demand and price promotions supply models jointly to address the issue of “non- long-run profit margin as customers consistently update their expectations of
random” marketing mix variables. We are able to provide rich empirical evidence what is to come and become strategic to take advantage of promotional offers.
that dynamics of the loyalty type are a significant driver of brands’ price This paper provides empirical evidence on the extent that dynamic customer
promotions . Specifically we find that controlling for category , store and brand expectations affect strategic purchase behavior via the use of individual-level
factors, brands with higher re-purchase effects are offered on price promotions cross-sectional and time-series data from the auto rental industry. Using the
more frequently. Kalman filter algorithm, the data are applied to a two-equation system consisting
of customer expectations and product switching. The results suggest evidence of
bounded rationality in customer expectations and experiential learning, providing
managerial insights on how firms are able to take advantage of imperfect strategic
n FA11 customer behavior.
Room 606, Alter Hall 4 - Dynamic Structural Modeling of Online Reputation Systems: How
Do People Rate?
Dynamic Models Amin Rahimian, Postdoctoral Associate, MIT Institute for Data,
Contributed Session Systems and Society, 100 Memorial Drive,, Apt 8-12A, Cambridge,
MA, 02142, United States, rahimian@mit.edu,
Chair: Amin Rahimian, MIT Institute for Data, Systems and Society,
Shrabastee Banerjee
100 Memorial Drive,, Apt 8-12A, Cambridge, MA, 02142,
United States, rahimian@mit.edu Online reputation systems constitute an important component of many electronic
commerce platforms. Reviews and ratings posted on these platforms strongly
1 - Predicting Dynamic Consumer Search with influence the purchase and browsing behavior of customers, and play an
Reinforcement Learning important role in revenue generation. Existing literatures in marketing, computer
David M. Muir, Assistant Professor of Marketing, University of science, and economics highlight the statistical foundations of such impacts and
Delaware, Department of Business Administration, 20 Orchard Rd, address some of the behavioral and structural patterns that govern them (such as
Newark, DE, 19716, United States, muir@udel.edu self-selection and reporting bias). These studies, however, fall short of a
comprehensive framework to capture all aspects of online reputation dynamics
In the process of consumer decision making, which frequently involves a that include the public perception of reviews, as well as the purchase and rating
thorough search of price and product information, consumers learn. Previous decisions. In this work, we propose a dynamic structural model for the evolution
research has considered the question of consumer search with learning from the of reputation on an online e-commerce platform. We use the proposed generative
perspective of causal inference; for example, previous work has assumed model to make inferences about individuals’ rating behavior. We train a deep
consumers use some form of a Bayesian updating process to learn as they search learning inference architecture with the simulated data from our generative
dynamically. Uniquely, I take a different approach to the study of dynamic search model to test for non-zero thresholds in the model. Finally, we apply the trained
with learning and apply the machine learning technique of reinforcement network to real time-series data of reviews submitted on a popular e-commerce
learning on clickstream data to show that both model-based MDP and the less platform. The results reveal circumstances under which these reviews are posted
restrictive, model-free Q-learning algorithm yield a complete set of predictions and their implications for the evolution of product ratings. Gaining a better
about how consumers search and learn in a dynamic world. Importantly, I understanding of the dynamics of reputation systems, namely, the conditions
employ the same dataset as previous consumer search research — which focus on under which ratings are submitted, and how they are eventually interpreted, is
causal inference instead of predictive accuracy - to illustrate how our respective crucial for marketers and designers of digital platforms, who can leverage this
works complement each other. This research has important practical implications information to stimulate further reviews and better manage user-generated
for marketers who want to encourage optimal real-time search pathways for content.
consumers.
2 - Building Hierarchy in the Dynamics of Marketing Mix Variables
Keyvan Dehmamy, Assistant Professor of Marketing, University of
Groningen, Nettelbosje 2, Groningen, 9747 AV, Netherlands,
k.dehmamy@rug.nl, Jaap Wieringa
In the world of big-data, a familiar way to reduce the dimensionality could be
using factor analysis. This method however, often lacks structure and good
interpretability. One way to bring in structure to the extracted factors is to form
groups and apply a subjective hierarchy to the factors. The goal of this paper is to
identify the common dynamics of the marketing mix variables (like price or
advertisement activities) in the brands, category, and chain and market level. We
use an extension of a Dynamic Hierarchical Factor Models, in short DHFM
(Moench et al., 2013). This method was developed to add time varying intercepts
to a hierarchical factor model. To get an insight about possible common dynamics,
we use the information about two marketing mix variables (price and
advertisement activities) for one category of FMCG, including multiple brands
sold in several stores of different super-market chains in the Netherlands. We
extracted the common dynamics of the marketing mix variables into brand and
45
n FA12
Based on an updated agency-theory model, we propose a relationship between
cross-ownership and firm performance, and moderators of this relationship based
on the firm’s marketing capabilities and the firm’s strategic emphasis of marketing
Room 745, Alter Hall investment. To develop an industry cross-ownership measure, we use information
Marketing Strategy - Competition from 59,222 institutional owner individual holdings and then empirically test our
model using Arrellano-Bond estimation, accounting for endogeneity by using
Contributed Session instruments calculated using lags of the focal variables. We find a significant
Chair: Mitsukuni Nishida, Johns Hopkins Carey Business School, positive relationship between cross-ownership and firm performance over both
100 International Drive, Baltimore, MD, 21209, United States, the long- and short-term. Further, we find evidence that this effect is stronger
over both the short- and long-term for firms with lower marketing capabilities,
nishida@jhu.edu suggesting that the effect of institutional cross-ownership on firm performance is
1 - The R2m Index Assessing the Relevance of Marketing stronger for firms with lower marketing capability. We also find that, over the
Scholarship to Business Practice short-term, institutional cross-ownership has a stronger effect on firms with a
Kamel Jedidi, John A. Howard Professor of Business, Columbia strategic emphasis towards R&D. Further, we find these results are robust to a
University, 518 Uris Hall Grad Sch of Bus, 3022 Broadway, New variety of alternative model and measure specifications. This framework and
York, NY, 10027, United States, kj7@columbia.edu, Bernd Schmitt, empirical results provide important managerial, public policy, and theoretical
implications on the consequences of cross-ownership.
Yanyan Li, Malek Ben Sliman
Has marketing academia strayed away too far from marketing practice and thus 4 - Firm Dynamics, Entry Order, and Performance
become less relevant? Many feel that way and have called for more emphasis on Mitsukuni Nishida, Johns Hopkins Carey Business School,
addressing relevant marketing problems. We present the development of a metric 100 International Drive, Baltimore, MD, 21209, United States,
that assesses the relevance of academic marketing articles to the practice of nishida@jhu.edu
marketing. Ideally, academic articles should be evaluated directly by practitioners
Over the past forty years, a large literature on entry-order effects on performance
in terms of their relevance to practice to provide feedback to academics. However,
has documented how a pioneering firm entering a market or developing a
such a task would be tedious and time consuming. Instead, we propose the use of
product might (or might not) achieve an advantage in market share in reduced-
Natural Language Processing and Latent Dirichlet Allocation to classify articles
form analyses where they abstract away forward-looking decisions under strategic
into topics, and score each of the topics based on their “marketing-ness”.
interactions, which are often salient features of most industries. We empirically
Marketing terms are identified based on a marketing dictionary developed using
illustrate the importance of accounting for strategic interactions among firms and
various sources (e.g., AMA dictionary of marketing terms) and validated with
forward-looking incentive when measuring the entry-order effects on
practitioners. The proposed R2M (Relevance to Marketing) score is a weighted
performance. By using a panel on the store counts and sales from the
combination of the probability that the article belongs to a topic multiplied by the
convenience-store industry in Japan, we find evidence of a revenue and entry
“marketing-ness” of the topic. We apply the proposed R2M measurement on a
cost advantage for early entrants. In contrast, early entrants face a disadvantage in
balanced, random sample of more than 4000 articles from Journal of Consumer
expansion and variable costs.
Research (JCR), Journal of Marketing (JM), Journal of Marketing Research
(JMR), and Marketing Science from 1982 to 2015. We discuss the marketing
topics generated from the LDA analysis, show their evolution over time and assess
their “marketing-ness.” We also report the R2M score distribution overall and by
journal. We find that JM has the highest R2M score followed by Marketing
n FA13
Science, JMR, and JCR. For validity check, we find that the R2M measure Room 746, Alter Hall
correlates well with observable measures of relevance, such as practice prize
awards and self-stated evaluations by marketing practitioners of a random set of Multi-Sided Platforms 1
articles. Estimating the R2M on a holdout set of articles from MSI working paper Contributed Session
series, Psychological Review (PR), and Quarterly Journal of Economics (QJE), we
find that MSI working papers score slightly higher than JM; PR and QJE generally Chair: Jinzhao Du, Fuqua Business School, Apt 506, 910 Constitution
score lower than marketing journals as expected. Dr., Durham, NC, 27705, United States, jinzhao.du@duke.edu
2 - Technological Dynamism and the Janus Like Effects of 1 - Preference Elicitation, Price Discrimination and Matching in
Firm Capabilities Ride-sharing Systems
Saeed Janani, Arizona State University, BA 411, Tempe, AZ, Mustafa Dogan, Post-doctoral Associate, Carnegie Mellon
85281, United States, sjanani@asu.edu, Gaia Rubera, University, 5000 Forbes Avenue, Pittsburgh, PA, 15213,
Michael Wiles United States, mudogan@sas.upenn.edu, Alexandre Jacquillat,
Vibhanshu Abhishek
Technology is a key aspect of any markets, and markets go through various
technology phases, each of which rewards firms with particular set of capabilities. We study the dynamic design of a ride sharing platform in terms of allocation and
Having a contingency view on firm capabilities, we investigate the effects of pricing, when there is demand heterogeneity over the time preferences. There are
marketing, design, and R&D capabilities on return on assets (ROA) in different two type of agents: time-sensitive agents who value low wait times even at a price
technological market conditions. Using all the published patents in the US as of premium, and time-sensitive agents, with great flexibility regarding wait times.
1980, we defined three fundamental technology characteristics of markets: By allowing the agents to reveal their preferences and designing dynamic
technology intensity, technological growth, and technological uncertainty. While allocation and pricing rules accordingly, the platform can get an opportunity to
technology intensity refers to the level of technological advancement in a market discriminate over the customers, and, at the same time, smooth out the imbalance
in a certain year, technological growth and uncertainty respectively capture the between the demand and supply over time. We show that, when the valuation
general trend and the degree of unpredictability in technological changes in a heterogeneity is strong, time becomes a significant discrimination tool. In this
market. Building on the RBV and dynamic capability theories and using the most case, the platform can extract all the surplus that the system generates. This
comprehensive sample to date with 1961 firms within 378 industries (SIC codes) outcome however, is suboptimal as it does not maximize the total surplus. As
in 36 years, we manifest that all the capabilities have a positive effect on ROA, valuation heterogeneity becomes weaker, time becomes less important for
but technological conditions moderate such effects. That is, technology intensity discrimination, and the platform uses the allocation mechanism primarily to
has a positive moderating effect on the marketing capability-ROA relationship manage the dynamic imbalance between supply and demand. In this case, the
and a negative effect on the R&D capability-ROA relationship; technological platform has to leave some of the surplus to the time-sensitive agents as
uncertainty positively moderates the effects of these capabilities on ROA; and, information rent. We also show that the price does not necessarily increase with
technological growth has a positive impact on the R&D capability-ROA the realized demand, in contrast to conventional wisdom. We quantify the
relationship. This study provides insights to researchers and managers with benefits of our mechanism by comparing its performance to that of baseline
respect to what capabilities should be developed under different technological mechanisms based on surge pricing. We characterize the circumstances under
market conditions to drive profitability. which the general mechanism we suggest leads to more preferable outcomes in
terms of consumer surplus as well as the overall system efficiency.
3 - What if Your Owners Own Other Firms in Your Industry?
Institutional Cross-ownership’s Effect on Firm Marketing
and Performance
John Healey, Tulane University, 7 McAlister Drive, New Orleans,
LA, 70118, United States, jhealey@tulane.edu, Ofer Mintz
The growth in institutional holdings of public firms has led to increased incidence
of cross-ownership, in which the same investor owns stakes in multiple firms
within an industry. Economic theory suggests such cross-ownership could impact
individual firm capabilities, but no empirical study has examined its association
with a capability like marketing that all firms need in order to sustain profitability.
46

2 - Dynamic Bundling Strategies in Platform and Two Sided Markets across shopping baskets. With these extensions, we obtain high-level insights in
Richard T. Gretz, Associate Professor of Marketing, University of high-dimensional purchase behavior. Naturally, these extensions add complexity
Texas at San Antonio, One UTSA Circle, San Antonio, TX, 78249, to the model and hence we rely on a new scalable estimation technique called
variational inference, originating from the machine learning literature. We apply
United States, richard.gretz@utsa.edu, Bradley Allen,
the method to purchases from an assortment that contains over 4,000 products.
Suman Basuroy, Deepa Chandrasekaran The obtained results display high face-validity, e.g. the motivations can be labeled
Bundling, defined as the practice of selling two separate items together in one intuitively and the inferred correlations make sense.
offering, is used as a strategic tool in various industries. Our research attempts to
answer three critical, and hitherto unanswered questions as to how managers use
2 - Adaptive Customization
bundling strategically over the life of the products in platform markets and what Khaled Boughanmi, PhD Student, Columbia Business School,
factors influence the performance of bundles. Specifically, the research questions 3022 Broadway at 117th Street, Uris Hall, New York, NY, 10027,
are: (1) what are the hardware-specific, software-specific and actor-specific factors United States, kb2662@columbia.edu, Rajeev Kohli
that influence bundle introduction, (2) how do these factors affect market On a recent day, Amazon.com had over 10,000 electronic tablets for sale. To
performance of such bundles, (3) how does bundle introduction impact the sales facilitate shopping, the web page showing the tablets displayed a menu of features
of stand-alone hardware and software sales. Using a dataset of observed that a shopper could use to refine the display. For example, selecting `ìPad’’ as the
console/game bundles in the video game industry, we empirically examine the first feature eliminated all but 418 tablets. Selecting `àt least 64GB hard drive’’ as
determinants of bundle introduction and the impact of bundle introduction on the second feature further reduced the display to 30 tablets. Two more screening
sales of the bundle, overall hardware, stand-alone hardware, and stand-alone steps (9’’-10’’ screen size, followed by at most $499 price) narrowed the options to
software. 8 tablets. Suppose we could predict the sequence in which a shopper is likely to
Preliminary findings indicate that bundle introduction increases stand-alone screen the tablets. Then we could use the prediction to customize the screening
component sales, suggesting that mixed bundling may increase hardware menu and the displayed alternatives, and to recommend tablets to the shopper.
adoption beyond what traditional bundling literature predicts. Further, findings We propose a method for making such predictions. The first prediction is obtained
indicate that bundle introduction is a function of hardware installed base, after the shopper selects the first screening feature. It is revised after the shopper
hardware life-cycle, and the interplay of characteristics of hardware and software selects each additional feature. The proposed approach has an offline component
providers. Bundling is implemented as a catch-up strategy for non-leading and an online component. The offline components uses past behavior and/or
hardware providers and a niche strategy for established hardware providers. choice data to identify probabilisitic screening rules for different consumer
Bundle performance increases along with the stand-alone price of the included segments. The online component uses Bayes’ rule to update segment-membership
software, suggesting consumers perceive bundles with more expensive software probabilities based the features selected by a shopper. The posterior membership
as a good deal. Our research extents bundling research by showing how bundling probabilities are combined with the segment-level estimates to identify the
operates in platform markets, and by examining the strategic decisions of optimal feature sequence recommended for a shopper. The procedure is adaptive
managers bundling software and hardware. Several managerial implications are since the optimal feature sequence can change as a shopper selects additional
discussed. features. We illustrate the proposed procedure using data on tablet computers.
3 - Media Platforms’ Content Provision Strategy and Source 3 - Assortment Optimization: Using Network Analysis to Reduce
of Profits Product Complexity at Retail Stores
Jinzhao Du, Fuqua Business School, Apt 506, 910 Constitution Ehsan Gholami, University of California, Davis, 690 Alvarado Ave.,
Dr., Durham, NC, 27705, United States, jinzhao.du@duke.edu, Apt 11, Davis, CA, 95616, United States, egholami@ucdavis.edu,
Wilfred Amaldoss, Woochoel Shin Kevin Manuel, Ashwin Aravindakshan, Chen-Nee Chuah
We see media platforms earning their profits from both consumers and advertisers Assortment rationalization, the process to determine if a product should be kept
(e.g., the New York Times), advertisers only (e.g., the Huffington Post), or or discontinued, has gained renewed importance in the retail industry. Prior
consumers only (e.g., Tidal). This paper theoretically investigates two important research has produced several assortment rationalization algorithms. Nonetheless,
strategic issues confronting a media platform: what proportion of its limited to the best of our knowledge, none of the proposed solutions are comprehensive
bandwidth or space should a platform allocate for content (instead of when the number of Stock-Keeping Units (SKUs) increases into the thousands. In
advertising)? and what should be the source of a platform’s profits? To facilitate this research, we propose a graph-based approach in which the components of
this analysis, we propose a model where a media platform interacts with three the graph (e.g., nodes, edges) are constructed using the retail customer’s
sides: content suppliers, consumers, and advertisers. In a perfectly competitive purchasing history. This construction allows retailers to learn not only about SKUs
content market, our analysis shows that competing platforms will adopt a free- with high sales but also about key products that might bring shoppers into the
content strategy even in circumstances where a monopoly platform adopts a store. Given the vast number of SKUs (over tens of thousands of items) that each
paid-content-with-ads strategy. However, the result can get reversed if the retailer carries and the shelf space capacity constraint, we take advantage of graph
content supplier is a monopoly. Counter to conventional wisdom, inter-platform theory to reduce the number of products in an assortment. We do so by analyzing
competition helps a platform to earn more profits when they adopt a free-content the purchasing behavior of all customers to determine the relative importance of
strategy. Next, despite paying a lower price to content suppliers, a media platform different goods in the assortment. We find that our solution outperforms other
may still get hurt. Furthermore, though advertisers’ higher valuation for assortment rationalization methodologies. Finally, we also perform an analogous
consumers benefits a media platform, it can hurt a content supplier’s profits when analysis at the personal level, targeting the key merchandise in a shopping basket.
a monopoly supplier sells content to a platform using paid-content-with-ads Leveraging the results of the aforementioned analyses, we build a network of
strategy or when duopoly suppliers can shape consumers’ preference at a low relationships among products and develop a network-based algorithm to cull the
marginal cost and sell to a platform using free-content strategy. Finally, if assortment subject to the capacity constraint.
advertising is quite annoying, even while a monopoly platform shuns the 4 - Generalizing Benford’s Law for Retail Prices
advertising market, duopoly platforms may cater to advertisers. Vinay Kanetkar, Associate Professor, University of Guelph, Dept of
Marketing and Consumer Studies, University of Guelph, Guelph,
ON, N1G 2W1, Canada, vkanetkar@uoguelph.ca
n FA14 Newcomb (1881) observed that beginning pages of logarithmic tables were
overused than back pages. Benford (1938) independently noted for 20 different
Room 607, Alter Hall datasets that the first significant digit (FSD) did not have uniform distribution as
Machine Learning - Retail might be expected. Benford (1938) suggested that FSD distribution followed
logarithm of digit with base 10. Benford’s observations were empirical
Contributed Session generalization. Seven years later, Stigler (1945) proposed alternative explanation
Chair: Vinay Kanetkar, University of Guelph, Dept of Marketing and for Benford law. Over the last 135 year, many mathematician, physicist and
Consumer Studies, Guelph, ON, N1G 2W1, Canada, statistician have tried to explain this phenomenon using variety of techniques,
methods and datasets. In area of business, Benford’s law is used for fraud
vkanetkar@uoguelph.ca
detection. However, number publications in marketing and economics are
1 - Model-based Marketing Insights from High-dimensional limited. In this paper, we investigate whether retail prices follow pattern
Purchase Data suggested by Benford law. We examined retail prices for automobiles, computer
Bruno Jacobs, Assistant Professor, University of Maryland, 3453 monitors, end of day stock market prices, house prices (list and selling prices),
Van Munching Hall, Robert H. Smith School of Business, College dish detergent prices based on scanner data as well as prices for spirits (wine,
Park, MD, 20742, United States, brunojacobs@rhsmith.umd.edu, whiskey, rum, gin, vodka). Not surprising that Benford’s law generally does work
for most of retail prices. Using several flexible distribution that are special case of
Bas Donkers, Dennis Fok
Benford’s or Stigler’s law, we are able describe various retail price datasets.
We introduce a novel method to obtain insight in purchase behavior from high- Although there is substantial literature in the marketing about price-ending,
dimensional purchase data, e.g. by identifying seasonality and dynamics in strategic aspect of pricing is hidden in the first digit. That is should retailer price its
purchase behavior. In addition to these high-level insights, the method can product and service for $1 or $2 and so on and not about $1.39 or $1.40. This
predict on the level of a shopping basket which products will be relevant. We paper provides insights about distribution of first digits using retail prices.
extend on previous work where LDA was used to model purchase behavior using
latent motivations in several ways: We allow for correlations between
motivations, estimate time effects such as seasonality, and allow for dynamics
47
n FA15 4 - Catching the Health Wagon: Consumers` Strategies of Control in

Healthy Food Consumption
Room 603, Alter Hall Meltem Ture, Université de Lille, Paris, France,
meltem.ture@skema.edu, Sukriye Sinem Atakan, Mina Seraj
CB – Health & Choices
Debates about healthy food have once again come to the fore as obesity rates
Contributed Session increase in most parts of the world and more people suffer from diet-related
Chair: Amir Heiman illnesses (e.g., diabetes, cancer). This study focuses on consumers’ (mundane and
special) practices of cooking and eating to understand how they - with the help of
Hebrew University, Department of Agriculture Economics, P.O. Box 12, or despite other actors - adopt what they perceive as healthy eating behaviors. A
Rehovot, 76-100, Israel, amir.heiman@mail.huji.ac.il two-step methodology consisting of a netnography on blogs and websites on food
and cooking (consisting a total of 4000 consumer posts), and sixteen in-depth
1 - Healthy Shopping Dynamics – The Healthiness of Sequential interviews with consumers and dieticians provide the data set. We find that while
Grocery Choices some aspects of healthy food consumption are clearly defined, consumers still feel
Martine T. van der Heide, University of Groningen, Nettelbosje 2, overwhelmed by the amount and variety of information. Moreover, analyses
P.O. Box 800, Groningen, 9700 AV, Netherlands, reveal four strategies that consumers use to eat healthily and, ultimately, gain
m.t.van.der.heide@rug.nl, Koert van Ittersum, Tammo H. Bijmolt, control over their bodies and lives: 1) relocating the locus of control to external
Jenny van Doorn actors, 2) shifting the focus away from food, 3) planning in advance, and 4)
cooking. This study extends the discussion that consumers try to establish a sense
To stimulate healthier shopping baskets among grocery shoppers, it is critical to of control by moderating their food consumption when they feel powerless in
understand how the healthiness of sequential choices evolves within a shopping other domains of life (Rezek and Leary, 1991). We found the pursuit of health to
trip. For example, if the healthiness of food choices (relative within their product be perpetual, full of uncertainties, and a source of anxiety for consumers. The
category) is interdependent, then the benefits of a healthy choice (e.g., low-fat strategies of control we delineated above help consumers navigate those dynamic
yogurt) may be offset by a subsequent unhealthy choice (e.g., regular chips). discourses. Hence, while the pursuit of healthy eating can add to the feelings of
Across panel data from over 5,000 shopping trips in a brick-and-mortar stress, distrust, and confusion - trademarks of postmodern times - it can, at the
supermarket and two controlled experiments, we find evidence for such same time, provide consumers with a sense of control over their lives and hope
interdependencies across sequential food choices, irrespective of the for their future wellbeing. Furthermore, we observed that high levels of planning
supermarket’s floor plan or choice format. A healthier choice reduces the may have negative consequences (overconsumption due to availability,
healthiness of the subsequent choice; an unhealthier choice in turn increases the frustration due to over-planning) and should be done in moderation to prevent
healthiness of the subsequent choice. Additionally, the brick-and-mortar cognitive overload. The findings have significant implications for researchers,
supermarket data suggests that a) the negative effect following a healthier choice managers, as well as policy makers.
is larger than the positive effect following an unhealthier choice, b) the relative
healthiness of choices reduces as a function of the number of choices made, and 5 - Substitution and Complimentary Relationships Between Diet,
c) unhealthy choices promote healthy subsequent choices to a lesser extent as Physical Activity and Medication Use
more choices have been made, all diminishing the relative healthiness as the Amir Heiman, Director of Research, The Center for Agricultural,
shopping trip progresses. These findings contribute to literature on food decision- Hebrew University, Department of Environmental Economics and
making and within-trip dynamics, while offering important implications for Management, P.O. Box 12, Rehovot, 76-100, Israel,
organizations aiming to promote healthier food choices. In order to successfully amir.heiman@mail.huji.ac.il
promote healthier choices throughout shopping trips, one must take a dynamic
perspective and take into account effects across a longer range of sequential This study discusses the possible tradeoff between chronic intake of hypertension
choices. medication, intensity of performing physical activity during leisure time and
adhering to DASH (Dietary Approach to Stop Hypertension) nutritional
2 - Does Air Pollution Affect Food Consumption guidelines. The medical literature considers medication intake, physical activity
Han Zhang, Peking University, Beijing, China, efforts and calorie restricting diet to be complementary in their nature.
hanzhanggsm@pku.edu.cn, Xing Li, Ping Tu, Xiaona Zheng Integrating prescribed medicines that control high blood pressure with healthier
life style is recommended by the medical intuitions as an efficient mean to lower
This paper uses data from a Chinese online grocery store to examine the effect of
hypertension and reduce the risk of cardio vascular diseases (CVDs). Despite the
air pollution on food sales. We find that 100 increase in Air Quality Index (AQI)
belief of the medical establishment that taking medication and maintaining a
increases the sales of the grocery store by 5%. This effect is concave, implying that
healthy lifestyle should come hand in hand for patients suffering from chronic
when AQI is low, an increase in AQI has a relatively larger impact on food sales.
diseases there is reason to believe that various psychological and personality
With regard to the sources of sales increase, our result suggests that consumers
factors would cause a situation in which chronic medicine intake will cause a
tend to upgrade their purchase to more expensive food items in polluted days. We
boomerang effect. Chronic usage of medicines may reduce the cost of unhealthy
conjecture that the salience of health concerns (referred to as the health-saliency
behavior, reduce risk of unhealthiness and establish a state of mind of
mechanism) leads consumers to buy more healthy and expensive food. Further
incompetence that lead to passive rather than proactive behavior. This study
analysis of sales for organic food confirms our conjecture.
empirically analyzes whether the relationship between chronic medication intake
3 - Air Pollution and Consumer Behavior: Evidence from and making efforts to maintain healthier lifestyle are indeed complementary or
Mobile Games substitute means to maintain health. The possible trade-off between adopting
Zhuo Zhang, Shanghai University of Finance and Economics, healthier life style and medication intake is analyzed using medical records
database of a sample of diagnosed hypertension from Israel. Our results suggest a
Shanghai, China, xixizz@sina.com, Weihe Gao, Yong Liu
two direction boomerang effect when it comes to physical activity. Specifically,
Although researchers are using the weather and the air quality to predict taking hypertension medication reduces the likelihood of meeting the threshold
investors’ behavior, they struggle to quantify the impact. While marketers focused for physical activity recommendation of 2.5 hours per week. The reversal
on the effect of weather and air quality to consumer behavior in the real life, little relationship is also significant. We found that adhering to the physical activity
is actually known about how the air quality influenced consumer behaviors in the recommendation reduced the likelihood of taking medication
virtual world. This study exploits the data from the mobile games at consumers’
individual level. Results find that air quality has main effects. Air pollution not
only negatively influenced the game player’s amount of paid for mobile games
but also negatively influenced their social reciprocity. Due to the“Winter Blue” n FA16
effect, SAD(seasonal affective disorder) plays moderate role in the relationship
between air pollution and game player’s paying behavior and reciprocal behavior. Room 231, Alter Hall
These findings are robust across different measures of air quality changes. Also, 2018 ISMS/MSI Gary Lilien Practice Prize
firm’s promotion and product strategy plays important role in the process of
players’ consuming. This research explored the relationship between the reality General Session
environment and consumers’ behavior in virtual mobile games. These findings Chair: John H. Roberts, University of New South Wales, Sydney NSW,
imply new opportunities in customer data analytics for firm’s managers and
marketers.
Australia, johnr@agsm.edu.au
48
INFORMS MARKETING SCIENCE – 2018 FB01
n FA17 Friday, 10:30AM - 12:00PM

Room 31, Alter Hall
UGC III - Online Reviews
Contributed Session n FB01
Chair: Douglas Bowman, Emory University, Goizueta Business School, Room 32, Alter Hall
1300 Clifton Road, Atlanta, GA, 30322-2710, United States, Healthcare Marketing: II
doug.bowman@emory.edu General Session
1 - The Coevolution of Volume, Valence, and Textual Content on
Social Media Chair: Sriram Venkataraman, UNC-Chapel Hill, Chapel Hill, NC, 27599,
Ning Zhong, Emory University, 1300 Clifton Rd, Atlanta, GA, United States, venkats@kenan-flagler.unc.edu
30322, United States, nzhong@emory.edu, David A. Schweidel 1 - Success Breeds Success: Weight Loss Dynamics in the Presence
of Short-Term and Long-Term Goals
Although marketers have been taking advantage of social media to watch brand
perceptions by tracking the volume, valence, or key words of online Kosuke Uetake, Yale School of Management, 165 Whitney
conversations individually, limited efforts have been made to investigate how the Avenue, Room 5477, New Haven, CT, 06520, United States,
volume, valence, and textual content of user-generated content (UGC) coevolve. kosuke.uetake@yale.edu, Nathan Yang
Research questions remain open about how the valence of UGC disturbs its We investigate the role of short-term goal achievement on long-term goal
volume, how the textual content of UGC impacts its valence, and how the topics achievement under the context of weight loss. Using novel large-scale data from a
of textual content affect each other over time. To examine the mechanism of how popular mobile weight management application, we track the daily dynamics of
online conversations develop, we analyze a corpus of time-stamped user- weight loss and calories consumption across a large number of users. The
generated posts across multiple social media platforms in the wake of a brand application sets a salient daily budget for calories, and by comparing cases in
crisis. We develop a dynamic model that jointly models the volume, valence, and which the user is slightly under or over-budget, we provide an empirical link
texts of these posts with a vector autoregressive (VAR) form. This modeling between short-term goal achievement and various long-term outcomes. Using
approach not only reveals the precedence of volume, valence, and textual content LASSO in a synthetic control method to predict counterfactual outcomes, we
as online conversations about the brand crisis evolve, but also unveils the show that our results are robust to potential manipulation of calories
causality of topics in the textual content at the meantime. consumption around the goal. Furthermore, our findings generalize beyond
2 - Using Online Employee Reviews to Understand the Corporate observations around the discontinuity when we implement propensity score
Culture of Firms Facing Consumer Crises methods with random forests. Finally, estimates from a dynamic structural model
of calories management reveal that users receive positive utility from past short-
Vrinda Kadiyali, Cornell University, 385 Sage Hall, Ithaca, NY, term goal accomplishments, and counterfactual analysis with the estimated model
14853-6201, United States, kadiyali@cornell.edu, Piyush Anand, quantify the long-run user benefits of various hypothetical policies that adjust the
Vishal Narayan budget.
We use publicly available online employee reviews to understand how the 2 - The Legalization of Marijuana and Opioid Epidemic
corporate culture of firms which face consumer crises (e.g., E.coli outbreak at
S. Sriram, University of Michigan, University of Michigan,
Chipotle restaurants), differs from comparable firms which do not face crises.
Unlike traditional data sources for measuring culture, employee reviews are Ann Arbor, MI, United States, ssrirag@umich.edu,
readily available from a large number of employees both before after the crisis, for Hayoung Cheon, Tong Guo, Puneet Manchanda
both crisis firms and comparable non-crisis firms, and over relatively long Two drug-related topics have garnered considerable attention in recent years. The
durations. Based on the competing values framework of corporate culture, we first pertains to growing concerns with opioid painkiller prescriptions, addiction,
estimate a factored hierarchical topic model on 43,000 employee reviews. We use and consequent death due to drug overdose. The second issue is the legalization
propensity score matching to control for selection issues between crisis firms and of marijuana for medical and recreational purposes by several states. While, prima
non-crisis firms. In comparison with employee reviews of non-crisis firms, we facie, these two issues do not appear to be related, two opposing viewpoints have
discuss how employee reviews of firms that face crises differ in their discussion of been advanced. On the one hand, it has been contended that marijuana is a safer
various aspects of corporate culture, both before and after the crises. Key words: alternative to opioids, both for medical and recreational use. Therefore, marijuana
social media, employee reviews, topic modeling, latent dirichlet allocation, legalization should reduce opioid prescriptions and other related adverse
propensity score matching, firm crises, corporate culture consequences. On the other hand, it has been contended that marijuana is a
3 - Suspicious Online Reviews and Brand Advertising Effort gateway drug that will encourage users to seek the more harmful opioids. This
point of view opposes marijuana legalization measures. We study the effect of
Douglas Bowman, Professor of Marketing, Emory University, legalizing marijuana on opioid prescriptions and deaths due to overdose. Further,
Goizueta Business School, 1300 Clifton Road, Atlanta, GA, 30322- we explore heterogeneity in the direction and magnitude of these effects based on
2710, United States, doug.bowman@emory.edu, Eun Hee Ko the nature of marijuana legalization (e.g., recreational vs. medical) as well as the
Concerns over the legitimacy of online reviews hinders their usefulness. In this type of patients seeking opioid prescriptions. Thus, our research represents an
paper, we study the relationship between a brand’s advertising effort and it early attempt to understand the consequences of marijuana legalization on
having reviews that consumers are suspicious of being fake. Studying 18 years of prescriptions of opioids and opioid-related adverse health events.
Amazon.com reviews for 2.4 million unique products, we find that 3% of reviews 3 - Prediction and Intervention of Racial-Ethnic Disparity Reductions
are ones consumers would be suspicious about. Extreme emotions (e.g., fear, joy)
in Severe Maternal Morbidity: A Machine Learning Approach
account for a review being viewed as suspicious better than mixed emotions (e.g.,
anticipation, surprise) or low-arousal emotions (e.g., sadness). We are argue that in the Field
weaker brands have an incentive for review manipulation. We find that a weak Jian Ni, Johns Hopkins University, The Johns Hopkins Carey
brand status, described by lower advertising effort, is associated with suspicious Business School, 100 International Drive, Baltimore, MD, 21202,
reviews that are promotional (positive) in nature. Though, the effect fades away United States, jni@jhu.edu, Andreea Creanga
for suspicious reviews that are denigrating (negative).
Marked and persistent racial-ethnic disparities exist in health in the United States
and reasons behind these disparities are not fully understood. We study the
disparity reduction of Severe Maternal Morbidity (SMM) in Maryland. We
develop and implement a machine learning approach for assessing the potential
reduction and estimating treatment effects using sequential visits data for
Maryland resident patients across facilities and hospitals setting. We assess
whether delivery in hospitals that have contracts with commercial payers where
payment is tied to performance on quality and safety measures would reduce
racial-ethnic disparities in SMM. We also detail the high concentration of SMM
racial-ethnic disparities in Maryland and compare it with potential improvements
in individual or health system changes in the state. Our study is aimed to provide
some much-needed analytics-driven recommendations to the policymakers and
healthcare professionals.
49
FB02 INFORMS MARKETING SCIENCE – 2018

4 - Impact of the ACA Medicaid Expansion on Public Health the platform made from the products listed, which we find correlate with the
Sriram Venkataraman, UNC-Chapel Hill, McColl Building, position of the product in the list. This feature of the data allows us to use
Kenan-Flagler Business School, Chapel Hill, NC, 27599, revenues as an instrument for position and thereby measure the causal effect of
position. In addition, we are able to quantify the estimation bias that arises from
United States, venkats@kenan-flagler.unc.edu
not correctly addressing the endogeneity of position.
The ACA Medicaid expansion extends coverage for most low-income adults to
138% of the federal poverty level. While the ACA Medicaid expansion was 4 - Profit Maximizing Marketing Experiments
intended to be national, the June 2012 Supreme Court ruling made it optional for Elea McDonnell Feit, Drexel University, 3220 Market Street,
states to adopt this program. As of the end of the calendar year 2017, 19 states Philadelphia, PA, 19104, United States, eleafeit@gmail.com,
have yet to expand their Medicaid program. Medicaid eligibility for adults in Ron Berman
states that did not expand their programs became quite limited. For example in
Recommended sample sizes for A/B tests are usually based on a hypothesis testing
nearly all states not expanding, childless adults remain ineligible for Medicaid.
framework where the goal is to detect a specific marketing effect with high
Even amongst the states that have adopted such an expansion, there exist
confidence. When the effect is small these formulas suggest samples of tens of
significant variation in the timing of their adoption decisions. For example,
thousands of consumers. Moreover, the hypothesis testing framework provides no
coverage under the Medicaid expansion became effective January 1, 2014 in all
guidance as to how to proceed when an A/B test fails to reject the null hypothesis
states that opted to immediately adopt the Medicaid expansion. Other states were
of no effect. We propose a new method to plan sample sizes for marketing
late to adopt (ex. Michigan 4/1/2014; New Hampshire 8/15/2014; Pennsylvania
experiments. We explicitly define the goal of a marketing experiments as
1/1/2015 etc.) . This study investigates the impact of states decision to expand or
deploying the best performing treatment over a population (e.g. visitors to a
not expand its Medicaid program on key outcomes like hospital admission,
website) to maximize the profit of the experimenter. Given this goal, we re-frame
readmissions, emergency room utilization, etc. Causal identification is achieved by
A/B testing as a Bayesian decision problem, where the marketer has prior beliefs
exploiting the rich variation in adoption timing decisions across states (specifically
about the treatments and chooses sample sizes in the experiment to maximize the
counties across adjacent states). Our findings reveal economically significant
profits produced during the test and in the subsequent roll-out. We find that
impact of such a policy on these public-health outcomes.
profit-maximizing sample sizes are highly dependent on the priors and costs of
the marketing treatments, and are often substantially smaller than those
suggested by standard sample size formulas. We provide recommended sample
n FB02 sizes for several different types of experiments that are common in practice
including a symmetric “A/B” Test, an asymmetric “Incumbent/Challenger” test
Room 33, Alter Hall and a “Holdout” test where both costs and priors are different for the two
treatments.
Digital Economy VI: Online Search and Advertising
General Session
Chair: Elea McDonnell Feit, Drexel University, Philadelphia, PA, 19104, n FB03
United States, eleafeit@gmail.com
Room 34, Alter Hall
1 - Competition and Confusion on Brand Search
Andrey Simonov, PhD Student, University of Chicago, Chicago, IL, Causal Inference II: Pricing and Preferences
United States, andsimonov@gmail.com, Shawndra Hill General Session
Bidding on a rival’s brand keyword in search advertising is legal and common, Chair: Bryan K. Bollinger, Duke Fuqua School of Business,
despite the arguments that such advertising might confuse consumers and thus Durham, NC, 27708, United States, bryan.bollinger@duke.edu
constitutes a trademark infringement. Using a randomized ad allocation on Bing
that manipulates the presence and positions of competitors’ ads, we measure the 1 - The Impact of Surge Pricing in Ride-Sharing Market
share of clicks stolen by competitors and the percent of these clicks driven by Linli Xu, University of Minnesota, Minneapolis, MN,
consumers’ confusion. We use the incremental “quick back” returns to the search United States, linlixu@umn.edu, Song Yao, Yi Zhu, Jiaoju Ge
engine page as a proxy for confusion. One-four competitors in the top paid
Ride-sharing companies such as Uber and Lyft have fundamentally disrupted the
positions on the page can steal 2%-15% of the focal brand’s traffic. Sole confusion
taxi industry by matching riders and drivers more efficiently. Recent studies have
cannot explain the clicks substitution, with more relevant advertisers stealing
shown that the entry of these platforms could improve consumer surplus and
more and higher quality (lower “quick back” probability) clicks. Yet, four
reduce search frictions commonly observed in traditional taxi markets. One
competitors’ ads increase the total “quick back” probability by 4 percent points,
distinct feature of ride-sharing platforms is that a dynamic pricing algorithm, so-
implying that around 23% of the consumers clicking on competitor’s links are
called “surge pricing,” is utilized to increase supply of drivers at times and places
due to confusion. The share of “confused” switching consumers decreases to
of high demand. Using a comprehensive dataset of individual trips from one of
12.5% if the top competitor is the most relevant one and increases to 29.5% if the
the largest ride-sharing companies in the world, we explore the impacts of surge
top competitor mentions focal brand’s company name. Competitors’ ads increase
pricing on consumer demand and its implications on consumer welfare and
the time-to-click of consumers on the search results page, suggesting higher
government regulation.
search costs for consumers. Overall, our results show that consumer confusion is
limited, suggesting that brand search is not restricted to the strict navigational 2 - Reference Dependence and Price Negotiations – The Role of
purpose. Advertised Reference Prices
2 - Large-scale Demand Estimation with Search Data Pranav Jindal, UNC Chapel Hill, McColl 4517, CB 3490,
Tomomichi Amano, Stanford Graduate School of Business, PhD Chapel Hill, NC, 27517-3490, United States,
Program, 655 Knight Way, Stanford, CA, 94305, United States, pranav.jindal@unc.edu
tamano@stanford.edu, Stephan Seiler, Andrew Rhodes Retailers routinely indulge in comparative pricing where they post two different
Many online markets are characterized by sellers that stock large numbers of prices (e.g., Regular Price and Sale Price) on the price tag of a product. Previous
products and sell each product infrequently. At the same time, consumer literature shows that comparing the sale price to an Advertised Reference Price
browsing information is typically tracked by online retailers and is much more (ARP) increases consumer’s likelihood to purchase and reduces their likelihood to
abundant than purchase data. We propose a demand model that caters to this search. In this paper, we study the effect of ARP on transacted prices in settings
type of setting. Our approach, which is based on search and purchase data, is where consumers can negotiate over product prices. Quantifying the effect of ARP
computationally light and allows for flexible substitution patterns. We apply the on transacted price is important to both retailers, as well as policy makers such as
model to a data set containing browsing and purchase information from a retailer the Federal Trade Commission (FTC) which closely monitors deceptive pricing
stocking over 500 products, recover the elasticity matrix, and solve for optimal arising from price comparisons. Utilizing transactions data from a large durable
prices for the entire assortment. goods retailer, we find that ARP has a positive and significant effect on negotiated
prices. For consumers who purchase at the retail store, a $1 increase in ARP
3 - Measuring the Position Effect of Search Rankings: increases the negotiated price by $0.20 on average. Interestingly, holding sale
Evidence from an Online Travel Website price fixed, higher ARPs lower consumer’s likelihood to negotiate, but conditional
Qingliang Wang, 28 Xianning West Road, Xi’an, China, on negotiating, higher ARPs result in lower negotiated prices. While salespeople
wangqliang123@gmail.com, Raluca Ursu, Pradeep Chintagunta differ in the discount they offer to the consumers, we do not find any differences
across salespeople in how ARP affects negotiated price, pointing to this effect
Online platforms increasingly rely on ranked lists to display product information being driven primarily by consumers. The effect of ARP on negotiated price differs
to consumers. These lists are typically constructed using machine learning based on consumers’ demographics, which as we discuss, has several implications
algorithms that predict and optimize consumer responses to the ranked options. for retailers and policy makers.
As a result, measuring the effect of a product’s position is challenging since the
ranked list is endogenous. In this paper, we analyze the causal effect of a
product’s position on consumer search outcomes using data from a travel search
engine. The data is unique in that it provides information on the revenues that
50

3 - Expectations-Based Reference Points and Consumer Search – 2 - Contracts in the Upfront Market for National
The Relevance of Irrelevant Prices Television Advertising
Anocha Aribarg, University of Michigan, Ross School of Business, Sylvia Hristakeva, University of California, Los Angeles, CA,
701 Tappan Street, R5478, Ann Arbor, MI, 48109-1234, United States, sylvia.hristakeva@anderson.ucla.edu,
United States, anocha@umich.edu, Pranav Jindal Nicholas Diebel, Julie Holland Mortimer
Retailers routinely indulge in comparative pricing where they post two different Advertising is an important input in the production of most final products sold to
prices (e.g., Regular Price and Sale Price) on the price tag of a product, which, as consumers, and national television ads still command the majority of ad dollars
the literature shows results in higher purchase intent and lower search likelihood. spent in the U.S.. Nevertheless, firms face different costs when accessing the
In this paper, we explicitly study how consumers use observed prices (both market for national television ads. These differences are so important that the
regular and sale) to form (and update) beliefs about market prices, and how these industry distinguishes between `good’ and `bad’ money. In particular, industry
beliefs impact consumer search. We design an incentive aligned online study, practices suggest that firms with long advertising relationships benefit from
where consumers update their price beliefs based on random search outcomes, favorable prices to reach the same audiences. We seek to confirm empirically
and trade-off potential savings from search with the associated search costs. The whether there are important differences in firms’ costs to advertise nationally and
experimental setup also allows us to test the feasibility of the rational expectations analyze the competitive consequences of these industry practices. As contracts
assumption, and the assumption that consumer update beliefs consistent with between advertisers and networks are considered trade secrets, we combine data
Bayesian updating, which are commonly made in the literature on consumer on national ad placements and program viewership demographics with average
learning and search. ad prices in each program airing. Reduced-form analyses suggest that advertisers
who have longer relationships with broadcasters face lower prices in those
4 - Understanding Preference Changes due to Aging for Consumer networks. We use a structural model to quantify these price differentials, and to
Packaged Goods estimate firms’ incentives to advertise to different audiences. Firms’ input-
Masakazu Ishihara, New York University, Tisch Hall 818, sourcing choices are modeled with a discrete-continuous payoff function.
40 West 4th Street, New York, NY, 10012, United States, Preliminary results suggest that advertisers that establish relationships with
mishihar@stern.nyu.edu, Akira Shimizu, Takashi Teramoto national broadcasters before 1996 obtain a 25% discount relative to advertisers
that establish relationships in 1996 or after. We propose a counterfactual that
In many countries, aging of the population has become an increasingly important eliminates these historic price dependencies and allows for prices to adjust using a
issue among marketers. As the population of senior consumers grows, marketers market clearing condition.
need to appropriately design marketing strategies for capturing their needs and
wants, which are likely to change due to aging. The goal of this paper is to 3 - Heterogeneity in Own and Competitive Advertising Effects
estimate preference changes due to aging, using scanner panel data that keep across Categories
track of the same group of consumers’ purchases over ten years at a large Anna Tuchman, Northwestern University, 2755 N Lakewood Ave
supermarket in Japan. We extend a multiple discrete-continuous choice model by Apt 3S, Chicago, IL, 60614, United States,
incorporating age-period-cohort effects into consumer preferences that are
anna.tuchman@kellogg.northwestern.edu, Gunter Hitsch,
governed by a Hierarchical Gaussian Process. Our approach allows us to
separately identify the changes due to aging from period and cohort effects. We Bradley Shapiro
further supplement the purchase data with a large scale survey on lifestyles, and Much of the empirical literature exploring the economics of advertising may not
examine the interaction effect between aging and lifestyles on consumer be generalizable because it uses a case-study model of research, finding a
preferences. As an application, we study the Liquor category purchases and particular effect in a single category and exploring the implications of that effect
investigate how aging influences consumers’ choice on the type of liquor (wine, only in that category. Publication bias may further distort our understanding of
beer, sake, shochu, etc.) as well as the healthiness. The results offer new insights the distribution of realized advertising effects if it discourages researchers from
on preference evolution due to aging. pursuing projects where a null effect may exist. Additionally, empirical
identification in many studies of advertising can suffer due to a lack of exogenous
variation. In this paper, we study the effects of TV advertising across a broad
range of brands and categories, which allows us to characterize the full
n FB04 distribution of advertising elasticities. We also evaluate the sensitivity of our
results to different identifying assumptions that are frequently employed in the
Room 35, Alter Hall literature. Our distributional analysis provides insights into i) whether or not,
Empirical Investigations of Present-day Television effects found in the literature are generalizable, ii) the extent to which null effects
may be present, and iii) the need to carefully address identification in any
Advertising Strategies empirical study of advertising effectiveness.
General Session 4 - The Impact of Product Placement on Brand-related Social Media
Chair: Beth Fossen, Indiana University, Bloomington, IN, 47401, Conversations and Website Traffic
United States, bfossen@indiana.edu Beth Fossen, Indiana University, Bloomington, IN, 47401,
United States, bfossen@indiana.edu, David A. Schweidel
Co-Chair: Anna Tuchman,Chicago, IL, 60614, United States,
anna.tuchman@kellogg.northwestern.edu As some advertisers grow concerned about traditional television advertising
effectiveness, product placement activities, where brands are visually and/or
1 - Watching People Watch TV verbally incorporated into television and movies, have increased. Despite its
Matthew McGranaghan, Graduate Student, Cornell University, popularity, there is limited research in marketing that has investigated the impact
Ithaca, NY, United States, mcgranam@gmail.com, Jura Liaukonyte, of product placement and their relationship with traditional television advertising.
Kenneth C. Wilbur In this research, we leverage media multitasking by television viewers to
investigate the effect of product placement in television programs on the volume
The proliferation of new technologies presents both challenges and opportunities
of social media activity and website traffic for the placed brand. Using data on
for measuring the effects of television advertising on attention: on one hand, new
nearly 3,000 product placement incidences for 99 brands that aired on 77
technologies such as cell phones and tablets compete with television advertising
television programs during the fall 2015 television season, the authors find that
for viewer attention, in effect changing the interpretation of traditional audience
product placement activities contribute to both more online conversations and
metrics; on the other hand, new technologies can be used to get a more accurate
web traffic for the brand, with audiovisual placements yielding larger increases
picture of an audience’s attention to, as well as content in,
compared to visual placements that lack a verbal mention of the brand. The
specific advertisements. This paper focuses on those opportunities and investigates authors also find that television advertising can enhance the impact of product
the effects of advertising content on viewer attention using two novel data sets: placement on social media activity, depending on the modality of the placement,
(1) a data set of advertising content developed using a combination of human supporting the importance of coordination between marketers and television
coders and machine learning algorithms, and (2) a data set of audience attention content creators.
measures that are passively collected from a panel of several thousand households
by devices that use facial and body recognition algorithms to quantify in room
and eyes-on-screen television viewing behavior - measures that may be more
aligned with an ad-buyer’s interests. Combined, these data provide a unique view
into how television advertising content affects attention, as well as suggest
meaningful implications for the future of audience measurement and content
development.
51
n FB05
adoption. Customers prefer mobile channel mainly because there are more
discounts for the transactions conducted via the mobile channel. We also find a
significant lock-in effect of lifetime, i.e., customers with shorter PC lifetime on e-
Room 232, Alter Hall commerce platform are more likely to adopt the mobile channel. Compared to
Mobile, Algorithm, and Artificial Intelligence (AI) mobile channel, online pay learning process is more affected by customer-specific
Session III: Customer Welfare in Mobile Age factors, including geographical and membership factors. We find that customers in
first-tier cities or in the higher membership level are less likely to adopt online
General Session pay. Three sets of policy simulations are conducted to optimize bonus policies for
firms to promote customers’ mobile pay adoption. The simulation results show
Chair: Xueming Luo, Temple University, Philadelphia, PA, 19122, that reducing bonus amount while increasing bonus offering opportunities and
United States, luoxm@temple.edu extending bonus policy durations are more effective strategies.
Co-Chair: Siliang Tong, Temple University, Philadelphia, PA, 19144,
United States, jack.tong@temple.edu
1 - Personalized Recommendation Algorithms Impact on Seller n FB06
Revenues in the Sharing Economy
Siliang Tong, Temple University, Temple University,
1801 Liacouras Walk, Philadelphia, PA, 19144, United States, Analysis of Markets III – Competitive Strategies
jack.tong@temple.edu Contributed Session
A central feature of the sharing economy is to use recommendation algorithms to
Chair: Yusan Lin, Penn State University, 301D Grubb, White Course
match buyers and sellers. However, it remains unclear whether and how
recommendation algorithms affect demand and supply of products in the sharing Apartments, University Park, PA, 16802, United States, yusan@psu.edu
economy. The authors explore this question by using a unique field data from a 1 - When Should Biopharmaceutical Rivals form Alliances
leading Asian home-cooked food mobile sharing platform with1.5 million Cexun (Jeff) Cai, Assistant Professor, Texas A&M University,
observations. To match peer sellers who cook dishes at their home kitchens with College Station, TX, United States, caicexun@tamu.edu
peer buyers in the same city who order take-out food, the app platform Arun Gopalakrishnan
implemented two algorithms: (1) review popularity recommendation (RPR) and
(2) botler personalization recommendation (BPR). Data analyses find that both Biopharmaceutical firms, when developing products for new markets, sometimes
RPR and BPR have significantly positive incremental effects on the seller’s have to decide between forming an R&D alliance with a potential rival versus
revenues, but through different mechanisms. RPR can improve sales revenues by competing on R&D. When such alliances make sense for firms, as well as
benefiting the seller’s future online reputation on the demand side, whereas BPR regulators looking to promote innovation that improves consumer welfare,
can improve revenues by motivating sellers to offer more new products on the remains far from clear. In this paper we use a game-theoretic framework to study
supply side. The results also find unintended consequences of recommendation the conditions under which firms should pursue R&D alliances, and the situations
algorithm designs: RPR has negative impact on new product offering, and BPR under which the alliance decision may conflict with consumers’ interests in
reduces subsequent consumer review rating. These findings are consistent with having access to life-saving medicines. First, we find that R&D costs in an alliance
the exploration-exploitation tradeoff account, in which RPR acts as an relative to in-house costs are an important driver of the alliance decision. Second,
exploitation algorithm since it encourages sellers to leverage existing firms with large asymmetries in their in-house R&D costs are less likely to form
competences, whereas BPR acts as an exploration algorithm as it rewards sellers an alliance. Third, as product-market competition intensifies, R&D alliances are
who are willing to take risks and introduce new products to satisfy buyers’ more likely to be pursued to alleviate competition rather than for efficiency gains
personal preference. The authors discuss implications for how to leverage in R&D. Fourth, and most strikingly, we show a sizable region of the parameter
recommendation algorithms and artificial intelligence for the prosper of sharing space in which firms would pursue an R&D alliance even though it would lower
economy platforms. the chances of a successful drug becoming available to consumers -a clear loss
of ex ante consumer welfare that regulators should be concerned with. These
2 - Empowering Patients using Smart Mobile Health Platforms: results provide a novel theoretical analysis of the biopharmaceutical industry for
Evidence from a Randomized Field Experiment regulators, firms, and researchers.
Beibei Li, Carnegie Mellon University, 5000 Forbes Ave,
2 - Consumer Social Sharing and Brand Competition
Hamburg Hall 3026, Pittsburgh, PA, 15213, United States,
Jane Gu, Associate Professor, University of Connecticut,
beibeili@andrew.cmu.edu
2100 Hillside Road, Unit 1041, Storrs, CT, 06269, United States,
With today’s technological advancements, mobile phones and wearable devices jane.gu@business.uconn.edu, Xinxin Li
have become extensions of an increasingly diffused and smart digital
infrastructure. In this paper, we examine the emerging mobile health (mHealth) This study investigates how the identity revelation consequence of consumers’
platform and its health and economic impacts on the outcomes of diabetes social sharing behaviors affects their product choice decisions and firm
patients. To do so, we partnered with a major mHealth firm that provides one of competition. Our analysis reveals two identity revelation mechanisms induced by
the largest mobile health app platforms in Asia, specializing in diabetes care, two types of consumer sharing activities that have different strategic influences on
together with the Office of Chronic Disease Management from the national market competition. First, consumers commonly publicize on social media their
Ministry of Health. We designed and implemented a randomized field experiment associations with products of distinct brand images, which has the effect of
based on 9,251 unique responses from 1,070 diabetes patients over a 15-month suggesting their identities to the public. Such identity suggestion through
period from May 1, 2015, to July 31, 2016. Our main findings show that adoption publicizing product association allows consumers to derive a social value in
of an mHealth platform by users has a statistically significant impact on reducing addition to the consumption value from buying a branded product. Identity
blood glucose and glycated hemoglobin levels, hospital visits, and medical suggestion affects firm profit through three effects: the positive identification
expenses of diabetes patients over time. In conjunction with patient self- effect, the negative misidentification effect, and the positive competition
management through the mHealth platform, we also find heterogeneous effects alleviation effect. We find that compared to the case of no social sharing, identity
between personalized and non-personalized messages. Interestingly, non- suggestion through publicizing product association always enhances the profit of
personalized mobile messages with general diabetes-care guidance demonstrate a the leading firm in a market with a large loyal segment, but can hurt the profit of
stronger impact on patient health improvement. Our findings indicate the the follower firm with a small loyal segment. Moreover, the follower firm may be
potential value of mHealth technologies, as well as the importance of mHealth further worse off when it attempts to enhance competitive status through
platform design in achieving better healthcare outcomes. expanding its loyal segment. Second, in addition to publicizing product
associations, consumers can also publicize their opinions on social media through
3 - A Dynamic Structural Model of Customer Learning on Mobile Pay publishing blog posts and comments, which has the effect of directly announcing
Shaohui Wu, Tsinghua Uiversity, School of Economics their identities to the public. Such identity announcement through publicizing
and Management, Beijing, 100084, China, opinions allows consumers to derive a social utility even if they do not buy any
wushh.14@sem.tsinghua.edu.cn products. We find that when identity announcement has low effectiveness, it
inhibits the positive identification effect of identity suggestion, making the
As one of the prominent components of Financial Technology (FinTech), the follower firm with a small loyal segment more likely to suffer a profit loss from
method of mobile pay is gradually accepted by more and more customers. This consumer social sharing. When identity announcement has high effectiveness, it
study develops a stochastic model to investigate the dynamics of individuals’ not only inhibits the positive identification effect of identity suggestion, but
mobile pay behavior. A Bayesian learning model is proposed and calibrated using eliminates the negative misidentification effect.
a rich data set. We find that there are two significant learning processes on both
mobile pay channel and online pay type. These two learning processes are
affected by consumer-specific factors, order-specific factors, and promotions from
firms. We find a significant discounts effect on customers’ mobile channel
52

3 - Will Digital Technology Replace Human Retail Agents reservation process—which is universally needed before any transaction carried
Tingting He, Saint Anselm College, 100 Saint Anselm Drive, out on all the P2P sharing platforms. In particular, we study how the time taken
Manchester, NH, 03102, United States, the@anselm.edu, Rajiv Lal by the resource owner to respond to the renter affects the matching outcome. We
utilize a unique policy on a popular P2P car-sharing platform in China, which
Our paper aims to answer the strategic question by solving a game-theory model mandates that any request made between 08:00 and 24:00 must be responded to
of market competition: Will digital technology replace human retail agents? The within 15 minutes. Our results show that the owners take on average 15.3 more
threat of digital technology on retail agents started from the 1990s when the minutes to respond outside of the quick-response hours (i.e., 00:00-08:00).
Internet took away customers from retail travel agents and airline companies Surprisingly, conditional on owners accepting the requests, this additional
stopped paying travel agents commission fees. Many agents exited the market. response time boosts, rather than decreases, the probability of renters finalizing
But the Internet did not kill all the retail travel agents, and some agents survived the transaction by 9.4%. Our analyses suggest that the positive effect of longer
by offering premium services and charging service fees to their clients. Facing the response time is likely driven by renters’ strategic inference of favorable
threat from more digital technology such as artificial intelligence, many people information from waiting. We also discover that longer response time can lead the
wonder if machines will replace humans in many industries. Our model shows renters to more likely withdraw their reservations. We discuss the implications of
that, just as the Internet did not kill the retail travel agents, digital technology will our findings to the platform and different participants.
not completely replace human retail agents. As our model would predict, the
Internet helped some travel agents practice service and fee discrimination among 3 - Product Line Design in a Competitive Sharing Market
different consumer segments. And as our model shows, as long as there is unique Chenchen Di, UIUC, 201 E Armory Ave. Apt 26, Champaign, IL,
value from human touch, human agents may survive by charging service fees to 61820, United States, cdi2@illinois.edu, Yunchuan Liu
their clients.
P2P platforms enable product sharing and collaborative consumption among
4 - The Role of Imagery in Equity Crowdfunding consumers. With the emergence of sharing markets, the incumbents adjust the
Yusan Lin, Penn State University, University Park, PA, United product line design and adopt different sharing business models. In this paper, we
States, yusan@psu.edu, Miwako Nitani, Tavy Ronen, Tawei Wang consider a competitive market where two firms contemplate sharing their
products and redesigning their product lines with multi-dimensional qualities. In
This paper examines the role of imagery in crowdfunding from 2014-2016. While addition to traditional products, a firm may introduce a new shareable product
previous papers have documented the correlation between entrepreneurs’ social with both traditional features that most products have and shareable features that
networks and the probability of campaign success, the underlying mechanism has facilitate consumer sharing. We start with a benchmark model where both firms
not been fully investigated. This paper addresses this gap in the literature by produce single traditional products respectively. Then we extent the model to a
exploring the role of images originating from social media networks in competitive sharing market where firms may introduce a new shareable product.
crowdfunding campaigns. We focus on fashion and beauty related companies and Interestingly, we show that if the low-end competitor offers shareable product
argue that the probability of campaign success depending on reliable imagery. By and participates in sharing, the high-end firm can be better off even it only
leveraging deep learning neural networks to understand the contents of imagery, produces traditional product with the same quality level. When we compare the
we show that by transmitting reliable imagery regarding the main product line, competitive sharing model with the benchmark, sharing can facilitate low-end
fundraising campaigns on crowdfunding platforms are more likely to be firm to increase qualities of traditional products, in turn to increase the quality
successful. Finally, we document how crowd investors interpret those signals and differences between product lines and to alleviate cannibalization. Moreover, we
use for their investment decisions. endogenize rent for sharing and show that the traditional product firm will
increase general product quality when its competitor offers shareable product.
n FB07
n FB08
Sharing Economy II Room 238, Alter Hall
Contributed Session Consumer Choice Models 1
Chair: Chenchen Di, University of Illinois, Urban-Champaign, Contributed Session
IL., cdi2@illinois.edu.cn Chair: Joseph Jason Bell, University of Iowa, 382 Westgate Street,
1 - The Impact of Ride-sharing Services on New Car Demand: Apt 5, Iowa City, IA, 52246, United States, jason-bell@uiowa.edu
An Empirical Analysis of the US Market 1 - Form + Function: Aesthetic Product Design via Adaptive,
Isamar Troncoso Cortez, PhD Student, University of Southern Geometrized Conjoint
California, Los Angeles, CA, United States, Fred M Feinberg, Handleman Professor of Marketing and Statistics,
itroncos@marshall.usc.edu, Sivaramakrishnan Siddarth, University of Michigan, 701 Tappan St., Room R5324, Ann Arbor,
Jorge Mario Silva-Risso MI, 48109, United States, feinf@umich.edu, Namwoo Kang,
Ridesharing services, led by Uber and Lyft in the US market, are one of the most Max Yi Ren, Panos Papalambros
visible and successful sectors of the sharing economy. Many financial analysts find Some “attributes” critical to product design are notoriously elusive. Conjoint
their rapid growth and future prospects to pose a serious threat to mainline shines in calibrating the importance of concrete elements like price, MPG, and
automakers, though, to our knowledge, no documented empirical evidence warranty length, but struggles with perceptual ones like “style” and “design”.
directly supports this claim. To fill this gap in the literature, we analyze new car These holistic, visually-conveyed attributes trade-off against traditional ones in
transaction data at the product segment level, from more than 1,200 car dealers consumers’ minds, so are critical to eventual market choices. Getting them right
in 68 different geographical markets in the US, spanning a five year period during consumes vast R&D and consumer research resources; yet current preference
which ridesharing services - led mostly by Uber- were gradually introduced in elicitation methods cannot reliably assess them. Here, we leverage real-time
different markets. We supplement this with Google Trends data on market- adaptive rendering — via a parameterized geometric model — to measure this
specific ride-sharing usage intensity. Together, these data provide a rich variation interplay between key design and traditional attributes in the passenger vehicle
in the treatment effect across markets, which enables us to identify the impact of market. The proposed “bi-level adaptive conjoint” method uses crowd-sourced
ride-sharing entry on new car demand at the product segment level. We estimate data to both measure vehicle style preferences based on 3D geometrization and
a fixed effects model on the number of transactions for each product segment at reveal tradeoffs between design/style attributes and functional ones (e.g., price
each dealer to identify the difference-in-difference coefficient associated with the and fuel efficiency). Bayesian part-worth estimation, online training via ranking
impact of UberX entry on its sales. We find that ridesharing services resulted in a SVM, and a crowd-based experiment allow the proposed method to pinpoint
two percent decline in the overall demand for new cars, and that the impact which styling elements differentially drive individual-level consumer reaction.
varied by product segment. The entry-compact segment was affected the most,
with sales declining by almost eight percent, which is consistent with the notion 2 - An Empirical Model of Screening Rule Choice
that the primary users are millennials in urban areas for whom ridesharing is a Joseph Jason Bell, University of Iowa, 382 Westgate Street, Apt 5,
realistic alternative to owning a car. This idea is further reinforced by the finding Iowa City, IA, 52246, United States, jason-bell@uiowa.edu,
that other car segments, such as luxury, luxury SUV, and trucks, show little or no Sanghak Lee, Gary J Russell
impact.
Consideration sets contain a wealth of information about competition between
2 - The Bright Side of Waiting in a Peer-to-peer Sharing Market, alternatives and brands. Consideration set formation is often thought to proceed
Despite Being Mostly Dark using non-compensatory rules, which very often include discontinuities. Because
Chuang Tang, National University of Singapore, Biz 2 #B1-03, of this, modeling consideration sets can be challenging. In this essay, we
1 Business Link, Singapore, 117592, Singapore, overcome this challenge with a model where consumers choose from among a set
of rules, and evaluate the rules by anticipating their impact. Our econometric
chuang.tang@u.nus.edu, Dai Yao, Junhong Chu
specification allows us to simulate the screening behavior of consumers,
Peer-to-peer (P2P) online sharing markets, which enable consumers to exchange understand patterns of brand competition, and perform counterfactuals. We
their unused resources, such as cars and apartments, with their peers for a rental, estimate the model with Bayesian techniques using a unique dataset from the
are gaining momentum. Previous studies have examined the impact of the design automobile industry where considerations sets are observed.
of the markets and the observable attributes of the traders, such as gender and
age. In this paper, we focus on the impact of a new factor—the multi-stage
53
n FB09
priced differently. To the extent that this pricing strategy reduces credit rationing
and improves financial institution profitability, price discrimination based on risk
may be advantageous. Our research aims to determine the value of price
Room 239, Alter Hall discrimination based on customer risk. The current research surrounding risk
Pricing Strategies I based pricing is scant and empirical investigations exploring the topic are even
more limited (Edelberg 2006). To our knowledge, there is no empirical
Contributed Session investigation of the effects of risk based pricing that models (1) the financial
Chair: Praveen K. Kopalle, Dartmouth College, 100 Tuck Hall, institution’s decision to approve a loan (2) the customer’s decision to accept a
Tuck School of Business, Hanover, NH, 03755, United States, loan (3) the customer’s decision to default and (4) the agent’s decision to select an
offer for presentation to customers. Our results suggest that price sensitivity
kopalle@dartmouth.edu decreases with higher levels of customer risk. This difference in willingness to pay
1 - The Risk Signal of Price Among Complementary Products: provides the financial institution with suitable conditions for risk based pricing.
Evidence from Innovative Short-term Insurances Furthermore, we find that price discrimination based on risk will lead to double-
Jochen Reiner, Goethe University Frankfurt, digit increases in profitability and increase access to credit for lower-credit quality
Theodor-W.-Adorno-Platz 4, Frankfurt, 60323, Germany, borrowers.
jreiner@wiwi.uni-frankfurt.de, Julia Wamsler, Martin Natter 4 - Can’t Take the Heat? Field Experiment in Residential
The authors propose and investigate the risk-revealing role of price in the context Energy Conservation
of complementary products, such as optional insurances (e.g., short-term Praveen K. Kopalle, Professor of Marketing, Dartmouth College,
insurances, product insurances or extended warranties). We argue that 100 Tuck Hall, Tuck School of Business, Hanover, NH, 03755,
consumers use the price of an optional insurance as a cue to infer the risk United States, kopalle@dartmouth.edu, Jesse Burkhardt,
associated with the product, service, or activity to be insured (i.e., core product). Kenneth Gillingham
Thus, high prices for optional insurances should be interpreted as a risk signal and
should negatively influence the choice probability of the core product. Yet, the In this study, we examine the results of a field experiment on minute level and
observed high prices for optional insurances suggest that it is common practice to appliance specific electricity consumption. The experiment took place during
neglect dependencies between the choice of the core product and the price of the critical peak load pricing days in 2013-2014 in a neighborhood in Austin, Texas.
optional insurance. In exploring the risk-revealing role of price, we address this The study includes five treatment groups: (i) installation of Nest Thermostat, (ii)
pricing problem and contribute to research on the allocative and informational setting up an online account to track energy consumption at the appliance level,
role of price. We test our conceptual framework with a series of experimental (iii) sending a text message, (iv) sending an actionable text message, and finally,
studies, a choice-based conjoint study, and a simulation study on innovative (v) sending a text message that has peak load pricing information. The
short-term insurances. The key results demonstrate the existence of the risk- households were randomly assigned to each of the five treatment groups and one
revealing role of price and its effect on consumer behavior. We find that an control group. We ran a triple differences model and included household and day
increasing insurance price not only negatively affects purchases of the optional fixed effects. Using data at the appliance-minute-level, we estimate a price
insurance but also of the core product. Our results further show that the risk elasticity of electricity demand of -0.17, and find that over 60 percent of this
signal emerges from the insurance price and not from the mere presence of an response can be attributed to air conditioning. The results of the field experiment
optional insurance in a purchase situation. Finally, we explore the properties of are also consistent with more recent research at the intersection of marketing and
the risk signal (i.e., its boundaries and strengths) and discuss consequences for neuro-science.
optimal pricing policies. We show that the current industry practice involves a
conflict of interest if the product to be insured and the optional insurance are sold
by different suppliers.
n FB10
2 - The Impact of Prior Price Dispersion and Basket Size on the
Effectiveness of Retailer’s Obfuscation Strategies Room 605, Alter Hall
Saurabh Bhattacharya, Lecturer, Newcastle University Business Customer Relationship Management I
School, 5 Barrack Road, Newcastle, NE1 4se, United Kingdom,
saurabh.bhattacharya@ncl.ac.uk, Matthew Gorton
Contributed Session
Obfuscation is a strategy used by retailers to decrease the price sensitivity of Chair: Guilherme Bucco, Dona Gabriela, 263, Ap.303, Porto Alegre,
consumers, by increasing their search costs, but in a way in which does not Brazil, guilherme.brandelli@yahoo.com.br
damage the reputation of the firm. Typical examples include providing different 1 - Dependence of Mere-measurement Effects on Past Experiences:
sizes of packaging for the same product categories across different stores, charging An Empirical Investigation in Financial Service Industry
different delivery options for internet purchases etc. Prior research establishes that Minjee Sun, University of Toronto, Rotman School of
such pricing strategies limit the use of price learning mechanisms by consumers.
Management, 105 St. George st, Toronto, ON, M5S 3E6, Canada,
With regard to price learning, extant research in obfuscation has, however, not
considered the importance of the degree of past price dispersion in the product minjee.sun15@rotman.utoronto.ca, Mengze Shi, Yupin Yang,
category in which the obfuscation strategy is applied. We propose that the lower Xubing Zhang
the previous price dispersion in a product category, the higher will be the price Conducting surveys to collect customer feedbacks may provide firms
learning for a consumer, which will decrease the probability of consumers an unintended benefit: mere participation of customers in the survey can change
purchasing a brand when a retailer applies an obfuscation strategy to mask higher their subsequent behaviors. This effect is commonly referred to as mere-
per unit prices. Additionally, we propose that the relationship between price measurement effect (or, survey participation effect). A widely accepted
dispersion and learning is moderated by the consumer’s basket size. Such that explanation for the effect is self-generated validity, which states that completing a
even when the dispersion in prices is low, consumers’ price learning may still be customer-satisfaction survey will increase the accessibility of previous experience
weak, increasing the likelihood of purchasing a product when an obfuscation and lead to subsequent behaviors consistent with the answer. However, the
strategy is employed. Based on AC Nielsen consumer panel and retail scanner literature has neglected how the valence of previous experience may affect the
data for a large US market, we demonstrate empirical support for our proposed direction of mere-measurement effect, in particular, the mere-measurement effect
model in the carbonated beverage product category where obfuscation strategy is under negative product performance remains unexplored. In this research, we
common. Managerial implications are discussed. investigate the impact of product performance on the mere-measurement effect
3 - The Impact of Discriminatory Pricing Based on Consumer Risk: using a unique dataset from a financial securities firm. The data contains a unique
natural experiment in which a random sample of customers participated in
An Empirical Investigation using Indirect Lending Through satisfaction surveys, and the fluctuation in product experience (i.e. stock portfolio
Retail Networks performance) is observable. We estimate the mere-measurement effect and the
Christopher Amaral, PhD Candidate in Marketing, Queen’s dependence of mere-measurement effect on customers’ past portfolio
University, 143 Union Street, Kingston, ON, K7L 3N6, Canada, performance. Taking several issues of the data into consideration, we apply Zero-
15ca8@queensu.ca, Ceren Kolsarici, Mikhail Nediak inflated Negative Binomial models and sample matching techniques. Our results
show that the mere-measurement effect indeed depends on the previous portfolio
There is strong evidence in the marketing literature that suggests that consumers
performance, and the choice of measures (e.g., the activeness of investments, the
often differ in their willingness to pay (Besanko, Dubé, and Gupta 2003),
size of investments, and retention).
highlighting the potential for firms to profit by varying prices by consumer
segment. While segments can be formed using various factors, one potential
factor that has received less academic attention in the price discrimination
literature is risk. The concept of risk is especially applicable in the context of
consumer credit, where lenders can classify borrowers into risk segments that are
54

2 - Improving Customer Retention Targeting using Control Charts
Jaap E. Wieringa, Full Professor, University of Groningen, Faculty n FB11
of Economics and Business, Department of Marketing, Groningen, Room 606, Alter Hall
9700 AV, Netherlands, J.E.Wieringa@rug.nl, Niels Holtrop
E-Commerce I
An extensive body of literature has focused on selecting the targets for customer
retention campaigns to reduce customer churn. However, while the extant is Contributed Session
literature is rich on methods to select who to target, far less attention has been Chair: Qiyuan Wang, University of British Columbia, 2111, Lower Mall,
paid to when to target these customers. This is particularly relevant in non-
Vancouver, BC, V6T 1Z4, Canada, qiyuan.wang@sauder.ubc.ca
contractual settings, where churn can occur at any instant. We build upon
existing work using probabilistic customer retention models, and extent these 1 - Adapting Online Shops to Window Shoppers
models with insights from the statistical quality control literature. In particular, Christian Schulze, Associate Professor, Frankfurt School of Finance
we develop a gamma-gamma control chart model to not only select which & Management, gGmbH, Adickesalle 32-34, Frankfurt am Main,
customers to target with retention efforts, but also to determine the time at which 60322, Germany, email@christian-schulze.de, Donald Ngwe,
the retention effort should begin. We apply our model to purchase history data Thales Santos Teixeira, Sandra Di Stefano
from a firm in the greetings and gifts industry. Beyond calibrating the model, we
also conduct a field experiment to test the external validity of our approach Many shopping websites focus on helping consumers, who are looking for specific
compared to a targeting-as-usual and control group. We find that our approach items (i.e., are in a so-called directed shopping mode). Prominently placed search
decreases churn by 4-6% compared to the other two groups. While not the main bars, references to related products from the same category, and extensive
goal of our model, we also find a modest spending increase amongst customers product descriptions cater to these customers. In many cases, focusing on directed
targeted by our model compared to the control groups. Finally, we explore shopping results in high conversion rates, but also small shopping baskets, and
heterogeneity in the response to our targeted e-mails. low margins due to low prices. However, a substantial portion of purchases are
the result of undirected shopping (e.g., in fashion, food, home interior, toys), akin
3 - The Role of Time-varying Contextual Factors in Latent Customer to “window shopping” in the offline world. Undirected shoppers often don’t enter
Attrition Models the store with the goal of buying a specific product, but have more diffuse goals,
Patrick Bachmann, University of Zurich, Andreasstrasse 15, such as “rewarding themselves” or “being inspired”. The setup of most online
Zurich, 8050, Switzerland, patrick.bachmann@business.uzh.ch, websites with their focus on low search effort and low prices is probably not well-
Markus Meierer positioned to capitalize on these undirected shoppers’ visits. In this study, we use
real-world, randomized field experiments to investigate the benefits of offering
Valuing customers is essential to any firm and enables marketers to identify key special websites targeted at shoppers in “undirected” shopping mode: How does
customers. Customer lifetime value (CLV) is the central metric for valuing offering an additional starting page targeted at undirected shoppers in “window
customers. It describes the long-term economic value of customers and gives shopping” mode affect conversion rate, basket size, and profit margin? Moreover,
managers an idea of how customers will evolve over time.With the Pareto/NBD we investigate the “how-to” of running websites for undirected shoppers: How
model, modeling customer lifetime value for non-contractual businesses has can firms determine, which starting page types to show to a consumer (e.g.,
become a straight-forward task, however this simplicity comes at a price. asking them about their preferences, inferring shopping mode from access
Individual-level predictions of customer lifetime value often lack precision. A channel, time of day, etc.).
possible explanation is that standard probabilistic customer attrition models do
not consider important contextual factors, such as direct marketing or regularity 2 - Measuring the Value of Social Credit on Online C2c Platforms
purchase patterns. However, there is no generalization of the Pareto/NBD model Jie Zhao, Associate Professor, School of Management,
that allows time-varying contextual factors to be considered.This study proposes a Guandong University of Technology, Guangdong, China,
closed-form maximum likelihood extension to the Pareto/NBD model that allows zhaojie@gdut.edu.cn, Junhong Chu
both time-invariant and time-varying contextual factors to be modelled in
continuous non-contractual settings. These contextual factors can influence either We quantify the value of Sesame credit in the online C2C accommodation sharing
the purchase or the attrition process, or both. A benchmark using multiple market in China. Specially, we collected data on several C2C accommodation
retailing datasets shows a significant improvement in forecast accuracy for future sharing platforms, xiaozhu.com, muniao.com, mayi.com, and Airbnb (China).
customer activity when explicitly modeling time-varying contextual factors.Our Several features make our empirical context an ideal setting for measuring the
findings have strong implications for both, marketing practice and research. value of social credit. (1) These platforms started operations 2-3 years before the
Besides giving detailed recommendations on when to use which modeling Sesame Credit was introduced in 01/2015, so our data cover 2-3 years before and
approach, we also provide practical advices for applying probabilistic customer 3 years after the introduction. (2) Some platforms encourage landlords to display
attrition models. Sesame scores thus we observe some of the landlords with Sesame scores, while
other platforms do not display any Sesame scores. (3) Multi-homing is common
4 - Customer Portfolio Optimization Based on Latent in China’s accommodation sharing market with the same properties being listed
States Segmentation in several platforms. Using AI and ML, we are able to identify the same properties
Guilherme Bucco, Federal University of Rio Grande do Sul listed in multiple platforms. We first apply the DiD approach to compare a
(UFRGS), 855 Washington Luiz St., Porto Alegre, 90010-460, property’s performance before and after the landlord’s Sesame score was
Brazil, gbbucco@gmail.com, Rodrigo Heldt, Cleo Schmitt Silveira, displayed. To address the possible selection bias in Sesame credit display, we
conduct a difference-in-difference-in-difference analysis. We use all properties
Fernando Bins Luce, Joao Luiz Becker that have their landlords’ Sesame scores displayed in at one platform, and that are
Customer contribution margin, return, and risk are key measures for evaluating also listed in at least one platform that does not allow landlords to display Sesame
customer-company relationships. However, they are seldom analyzed scores. We then compare these properties’ performance in the same platform
simultaneously in customer management, since customer lifetime models (before and after the Sesame score display), and across platforms with and
disregard the return rate provided by customers, and portfolio optimization without Sesame scores displayed. We find that Sesame score can be an effective
approaches disregard the contribution margin. We developed a framework to (1) means to build trust and increase transactions.
segment customers combining these three key customer measures through a
Hidden Markov Model (HMM), and (2) use the latent segments to optimize the
customer portfolio. By using HMM we provide a non-arbitrary segmentation and
a stable latent structure of segments from the key customer measures, which are
the observable variables. The latent segment-based optimization involved
constraints which ensured managerial feasibility by guaranteeing viable segments
weights and an overall desired profitability. The proposed framework was tested
with a database from a large company (80,000+ customers) of the financial
services industry. We compared the results (1) with the actual company portfolio,
and (2) with the previous efficient frontier, which is based on the segmentation
traditionally adopted by the company. Given the more homogenous segmentation
generated by the framework, the efficient frontier obtained is superior to the
actual portfolio and the previous frontier. Thus, by using the suggested
framework, we reached a more robust segmentation, allowing more efficient
customer portfolio recommendations for managers to target and prioritize.
55

3 - Demand Estimation for Online Retails with Large Product Sets 3 - Mass Advertising as a Natural Experiment
Qiyuan Wang, University of British Columbia, 2111, Lower Mall, Michael Thomas, Assistant Professor, Santa Clara University,
Vancouver, BC, V6T 1Z4, Canada, qiyuan.wang@sauder.ubc.ca, 500 El Camino Real, Santa Clara, CA, 95053, United States,
Chunhua Wu, Charles B Weinberg mwthomas@scu.edu
The online retailing industry is characterized by high levels of product variety. Increasingly, firms have the ability to make high quality, micro-level predictions
Typically hundreds, if not thousands of products are available to consumers in a of demand for their products which improves their ability to target advertising.
given category. High variety presents significant challenge for demand estimation. However, firms may choose to target advertising at a higher level of aggregation
In particular, consumers choose from a limited set of products and many product than their predictions allow in order to benefit from the significant discounts that
varieties have zero sales in one or more time periods. Traditional discrete choice often accompany mass advertising purchases. In this paper, we argue that firms
demand models (e.g. logit model) assume that consumers are aware of all making such a choice generate a natural experiment which can be used to obtain
available products and then make a choice to maximize their utility. But when consistent estimates of the response to advertising without the need for
consumers’ search is costly and limited, consumers only know a subset of all experimentation. We present the supply-side conditions which incentivize firms
available products. Thus, this assumption is violated and, as the literature shows, to generate this natural experiment as part of their optimization strategy, present
the traditional demand model generates significant estimation bias in such an empirical model for exploiting the natural experiment, and apply the strategy
contexts. We propose a new method to address this issue. To overcome this to multiple product categories. Estimates from this “coarseness” strategy agree
problem, we propose that we can use consumers search data to uncover the with recent literature which suggests that many standard approaches to
hidden product demand structure by clustering products into different groups. estimating the response to advertising may produce biased results due to
Each group can be treated as a choice set. Products within the same group are unobservables.
close substitutes for each other and products from different groups are not directly
related. In addition, our approach leads to a systematic approach to treating
products with zero demand. Then demand estimation can be performed at group
level. We first examine the parameter estimates of our approach using numerical n FB13
experiments and show that our approach recovers the parameters well. We then
apply this proposed method to a dataset from online flooring retailer and compare Room 746, Alter Hall
the estimation results between our method and other methods. We conclude with Multi-Sided Platforms II
implications for demand estimation and managerial practice.
Contributed Session
Chair: Hai Long Duong, NUS, 1 Business Link, Singapore, 117592,
n FB12 Singapore, dhlong.hp@gmail.com
1 - Strategic Merchant Decisions on a Retail Deal Platform
Room 745, Alter Hall Min Kim, R.H. Smith School of Business, University of Maryland,
Methods – Targeting, Advertising, & Attribution Robert H. Smith School of Business, 3330 Van Munching Hall,
College Park, MD, 20742, United States,
Contributed Session
minkim@rhsmith.umd.edu, Jie Zhang
Chair: Michael Thomas, Santa Clara University, 500 El Camino Real, Retail deal platforms have become a popular venue for merchants to sell products
Santa Clara, CA, 95053, United States, mwthomas@scu.edu at (deep) discounts online and for shoppers to search for and purchase deals. Yet
1 - T-patterns in Business research on merchants’ strategic decisions on these platforms remains scarce. In
Srinivas Tunuguntla, University of Wisconsin - Madison, this study, we conduct an empirical investigation on merchants’ key promotion
975 University Ave, Madison, WI, 53706, United States, decisions on a retail deal platform by taking into account their strategic
stunuguntla@wisc.edu, Neeraj Arora, Glenn Fung considerations in a competitive environment and the two-sided market nature of
the platform. We propose a dynamic game model in which each merchant makes
Sequence of events that occur over time may have recurrent patterns. In this two decisions: the number of deals offered (including zero) and the depth of
paper we develop a scalable methodology to uncover such time patterns and discount, based on its expectations of decisions made by the other merchants and
demonstrate their value in business applications. We build upon prior work by the expected future profit streams. We estimate the model using data from a
\citet{magnusson2000discovering} and identify four limitations of the existing T- mobile retail deal platform specializing in fashion products. Based on the model
pattern algorithm that preclude it from being useful for typical business problems. estimation results, we conduct counterfactual policy simulations. We find that
The four categories of limitations are (i) scalability (ii) supervised learning (iii) reducing internal and external administrative costs borne by the merchants
heterogeneous individuals (iv) distributional assumptions, and propose a solution increases overall merchant’s profits and could also increase the total eco-system
for each limitation. We use simulations to exhibit the properties of our proposed payoffs, which creates win-win opportunities for both the platform and
algorithm and its ability to uncover true T-patterns. The simulations demonstrate merchants. Moreover, preferential commission rates to the merchants based on
the gains accrued from our proposed algorithm when compared to the original T- their market shares affect payoffs of the eco-system. These findings provide
pattern algorithm. We use insurance claims data from a well-known insurance valuable recommendations on how to improve existing merchants’ cost
company to test the algorithm. We show that the algorithm successfully detects T- management and commission structures of a platform to achieve higher payoffs
patterns that routinely occur in the context of insurance claims. Using each for merchants and the platforms.
T-pattern as a binary feature in machine learning models we classify the claims
into the two groups of satisfied and dissatisfied customers. This reveals T-patterns 2 - The Adoption of a Multisided Platform by Different Types of
that separate dissatisfied customers from satisfied ones and identifies touch-points Users: A Spatiotemporal Analysis
that could minimize customer dissatisfaction with the claims process. Ludovic Stourm, HEC Paris, 1 rue de la Libération, Jouy-en-Josas,
78350, France, stourm@hec.fr, Paulo Albuquerque
2 - Inference for Factor Model Based Average Treatment Effects
Kathleen Li, The Wharton School, 3730 Walnut Street, The recent years have seen the explosion of the sharing economy with platforms
Philadelphia, PA, 19104, United States, katli@wharton.upenn.edu such as AirBnB, Uber and BlaBlaCar, which essentially act as matchmakers
between individuals willing to rent a resource (apartment, labor, space) and
In this paper we consider using a factor-model-based method, also known as the individuals willing to monetize the resources they own. In this research, we
generalized synthetic control method, to estimate average treatment effects. This construct a spatiotemporal model of diffusion to empirically analyze how such a
method is best suited for cases where there is only one (or a few) treated unit(s), multisided platform is adopted by different types of users over time and space. In
a large number of control units, and large pre and post-treatment sample sizes particular, our model can be used to measure the distinct influence of existing
(i.e., long panel). These settings of a long panel data are quite common in users in one side of the platform on the adoption decision by new users in
marketing due to the prevalence of daily and weekly data at the customer, store another side. We apply our model on a unique dataset from a European car-
or company level. Existing inference methods lack theory and use a bootstrap or sharing platform with about 400,000 users split in two groups: car owners and car
permutation procedure that either assumes that idiosyncratic errors have the renters. We present the results of this analysis and investigate how the initial
same variance for the treated and control units or require that the treated units’s distribution of users affects the speed of diffusion of the platform.
error variances be the same during the pre and post-treatment periods. Our
inference for the factor model based average treatment effects addresses both
issues, allowing the method to be more widely applied, and provides previously
unknown distribution theory. We also propose a modified model selection
criterion to accurately select the number of factors even in finite samples.
Simulations confirm our theoretical analysis, and an empirical application
examines the effect of opening a showroom by e-tailer on its online sales.
56

3 - Entry Decisions of Firms on Business-to-consumer Platforms 2 - The Incremental Value of Unstructured Data in Predicting
Ruobing Ling, National University of Singapore, Business Link, Customer Retention
NUS, Singapore, 01-01,BIZ 2 Bu, Singapore, 117592, Singapore, Evert de Haan, Assistant Professor, Goethe University Frankfurt,
ruobingl@u.nus.edu, Junhong Chu Theodor-W.-Adorno-Platz 4, Frankfurt am Main, 60323, Germany,
Two-sided markets have experienced a dramatic expansion in various industries. dehaan@wiwi.uni-frankfurt.de, Elena Menichelli
For most of the Business to Consumer (B2C) platforms, the B-side always needs In CRM, one challenge is to accurately predict future customer behavior.
to learn about the platform’s value and potential through advertising or detailing. Traditionally these predictions have been made using data from the customer
In this paper, we build a dynamic discrete choice model to investigate the database and quantitative data from surveys. Qualitative data are instead unused
dynamic entry process of the B-side. Using a unique dataset from the earliest and in most of the cases, since it cannot be directly included in econometric models
largest B2C platform for health checkups based in China, we empirically test how because of its unstructured nature. An important qualitative data source, which
the risk-neutral physical examination (PE) centers and hospitals make their entry has been neglected up to now, is the voice of customers, e.g. customers’ actual
decisions based on the future flow of benefits. Specifically, we study the impact of stated opinions in open questions and in online comments. In our study we use
various factors through the hospital-specific negotiation and detailing process. To data from a European telecom provider, in which we illustrate (1) ways to get
address the potential endogenous issue, we model the discount level hospitals insights from these unstructured data, (2) methods to include these insights in
offer to the platform and their decisions to enter into the platform simultaneously, traditional econometric models, and (3) the incremental monetary value of using
and use the control function approach for the city-level direct and cross network these data due to more accurate customer retention prediction. We show that
size. Our results show that competition effect between hospitals does not play an including these data indeed helps to more accurately predict customer retention,
important role in this process. However, we find a significantly positive cross- when it comes to who will churn and who won’t (i.e. the hit rate) as well as the
network effect in that more patient registrations lead to more hospital signups. timing of customer churn (i.e. at what moment in time the customer will churn).
Further, hospitals that gain order/orders through the platform before formal All this leads to better targeting customers at the right moment in time. Based on
collaboration are more likely to join after detailing by the platform’s salesforce. our analyses, we show that including unstructured qualitative data in churn
Although higher discount level could bring larger demand, the hospitals prefer prediction models can increase the profitability of the firm by €315,000 annually,
lower discount level when they first join the platform. We discuss the implications due to cost savings and customer equity improvements.
of our findings from the perspective of B-side for B2C platforms.
3 - When Does Beauty Pay. A Large Scale Image Based Appearance
4 - Making Lemonade from Lemons: Response to Adverse Actions in Analysis on Career Transitions
Two-sided Market, the Case of Singapore’s Taxi Industry Nikhil Malik, Student, Carnegie Mellon University,
Hai Long Duong, Research Fellow, National University of 5000 Forbes Avenue, Pittsburgh, PA, 15213, United States,
Singapore, Nus Business School, 15 Kent Ridge Drive, Singapore, nmalik1@andrew.cmu.edu, Param Vir Singh, Dokyun Lee,
119245, Singapore, dhlong.hp@gmail.com, Junhong Chu, Dai Yao Kannan Srinivasan
In a platform market, how does an adverse action from one side affect the other We investigate the dynamic effects of beauty over an individual’s career. Using a
side? In this paper, we study the impact of booking cancellations and passenger fine grained longitudinal sample on career milestones and educational
no-shows on taxi drivers’ labor supply and productivity in Singapore’s taxi background of 7436 individuals selected from an online professional social
industry. We employ a novel big data set covering three months of taxi bookings network and employing computer vision methods for rating attractiveness of
from the largest taxi operator in Singapore. Our analysis shows that drivers work individuals, we find that men enjoy a beauty premium early in their career which
longer time and earn more per hour following cancellations or no-shows - as if disappears later in the career. In contrast, women do not receive a beauty
they strive to make up for the loss from such adverse actions. Interestingly, premium early in their career. Rather they receive a beauty premium later in
working longer time and increasing productivity are substitutable rather than their career. We show these effects through a survival analysis where attractive
complementary devices, and are chosen by taxi drivers in their own favor: men are found to progress faster in their career early on and women are found to
experienced drivers, with better skills in job search than novices, tend to work progress faster in their later career in comparison to their unattractive
more diligently to increase productivity; and solo drivers, with a more flexible counterparts respectively. We find that the overall beauty premium is greater for
schedule as opposed to sharing drivers, tend to work more hours. Furthermore, women. These results are robust to a number of control variables and individual
these effects are strong in the immediate following hour and fade away unobserved heterogeneity. We provide theoretical reasoning that rationalizes
afterwards. Our results demonstrate the resiliency of platform markets and shed these findings.
new light on the behaviors and interactions at the micro-level among agents on
both sides. 4 - Public Media and the Filter Bubble
Christopher Berry, Canadian Broadcasting Corporation, 250 Front
Street, Toronto, ON, M5V 3G7, Canada, christopher.berry@cbc.ca
n FB14 Public media produces a public good in the form of social cohesion. Filter bubbles
erode social cohesion. Recently, filter bubbles have grown stronger, more
Room 607, Alter Hall profitable, and more hackable. Filter bubbles, in part generated by deep learning
algorithms, can be addressed with deep learning algorithms, and there are novel
Machine Learning – Customer Retention managerial implications for public media.
Contributed Session
Chair: Christopher Berry, Canadian Broadcasting Corporation,
810 60 Bathurst Street, Toronto, ON, M5V 2P4, Canada,
christopher.berry@cbc.ca
1 - When the Data Are Out: Assessing Behavioral Changes Following
a Data Breach
Dana Turjeman, PhD Candidate, University of Michigan, Ann
Arbor, MI, United States, Turji@umich.edu, Fred M Feinberg
As the quantity and value of data increase, so do the severity of data breaches and
consumer privacy invasions. While firms publicize their post-breach protective
actions, little is known about the social, behavioral, and economic aftereffects of
major breaches. Specifically, do individual consumers alter their interactions with
the firm, or do they continue with “business as usual”? Our data stem from a
matchmaking site with substantial covert activity that was breached in 2015. The
data we use include de-identified profiles of paying members from the United
States, and their activities on the website since joining, and up to 3 weeks after,
the disclosure of the data breach. We extend Wager and Athey’s (2017) Causal
Forest model into a Temporal Causal Forest in order to assess changes in users’
engagement. Though the aggregate raw post-breach effect in number of activities
(messages, searches, chat messages) appears nearly negligible, our analysis reveals
nontrivial individual-level reactions, as well as heterogeneity in responses to the
breach announcement. Analysis of activities that relate to disguise and precaution
reveals a significant increase in the number of users that have deleted their
photos to avoid personal identification.
57
n FB15
payment decision. Our research offers a number of novel findings that are useful
to practitioners in for- and non-profit businesses who are interested in PWYW
pricing. Furthermore, our research suggests that signals of trust placed on
Room 603, Alter Hall customers by a firm could result in enhanced reciprocal behavior; this implies that
CB - Perceptions & Choice perceived trust could be used as a novel marketing tool, with further managerial
implications.
Contributed Session
4 - Factors Moderating the Effectiveness of In-store
Chair: Hari Ravella, Virginia Tech, Blacksburg, VA, 24061, Mobile Promotions
United States, ravella@vt.edu Hari Ravella, Virginia Tech, 7054 Haycock Road, Falls Church, VA,
1 - How Non-ownership Physical Possession Impacts 22043, United States, ravella@vt.edu, Dipankar Chakravarti
Object Valuation
Mobile marketing has seen explosive growth in recent years (Shankar 2016).
Charan K. Bagga, Assistant Professor, University of Calgary, While the growing popularity of mobile communications testifies to its
2500 University Dr NW, Calgary, AB, T2N 1N4, Canada, marketplace impact, it raises important questions about the mechanisms that
charan.bagga@ucalgary.ca, Neil Bendle, June Cotte drive consumer (shopper) response to in-store mobile promotions versus other
Physical possession is known to exert a positive effect on object valuation more traditional in-store promotion formats such as shelf coupons and end-of-
regardless of whether the object is legally owned. If physical possession affects aisle displays. The present paper argues that, in contrast to traditional in-store
object valuation independent of legal ownership, it raises questions with crucial promotions that tend to be passive, in-store mobile promotions tend to be
implications for marketing: How do the non-ownership physical possession types intrusive and demand the recipient’s attention. Mobile strategy research reported
of renting and borrowing impact valuation? Evidence from four experiments in Forbes (Conner 2013) suggests that 90% of text messages get read within 3
demonstrates that the valuation (i.e., willingness-to-pay) for rented objects is minutes of delivery, perhaps aided by an urge to access new information upon the
greater than the valuation for non-possessed or borrowed objects. Borrowed alerting ping. Notwithstanding its irritation invoking potential, a promotional
objects are found to be valued more than non-possessed objects only when the message that has penetrated the attention barrier then has significant potential to
knowledge available for the non-possessed objects is low. The authors find that precipitate purchase behaviors. We argue that relative to an equivalent in-store
psychological ownership mediates the relationship between valuation and non- promotional offer delivered in a traditional format, an in-store mobile promotion
ownership physical possession. Additionally, psychological ownership varies for has a significantly higher likelihood of deflecting consumers off planned purchase
different possession types (i.e., ownership, renting, and borrowing) as its routines and provoking purchases of alternative brands not previously part of
contributing routes (control, self-investment, and knowledge) operate differently their consideration sets. We also argue that such mobile promotion effects are
for each possession type. As further evidence of the psychological ownership likely to be larger for consumers who are lower (versus higher) on innate deal
based theoretical account, the authors show that rented objects are not valued proneness, as well as for hedonic versus utilitarian products. We test our
higher than non-possessed objects if the control or self-investment routes of predictions using consumers recruited from a web panel who participate in a
psychological ownership are suppressed. Finally, the authors examine the computer-simulated supermarket shopping task.
moderating influence of product hedonism-utilitarianism, and consumers’
tightwad-spendthrift tendency on the valuation of rented and borrowed objects.
The authors find that tightwad consumers have a greater willingness-to-pay than
spendthrifts for rented objects, but not for borrowed objects. Further, the nature n FB16
of the product (whether it is perceived as hedonic or utilitarian) does not affect Room 231, Alter Hall
the willingness-to-pay for rented and borrowed objects.
2018 ISMS/MSI Gary Lilien Practice Prize II
2 - The Effects of Bariatric Surgery on Delay Discounting
Modeling in Obesity General Session
Ratnalekha Viswanadham, PhD Candidate, INSEAD, Boulevard de Chair: John H Roberts, University of New South Wales, 6/61 Kirribilli
Constance, INSEAD, Fontainebleau, 77305, France, Avenue, Kirribilli, Sydney NSW, 2061, Australia, johnr@agsm.edu.au
ratnalekha.viswanadham@insead.edu, Yann Cornil, Liane
Schmidt, Liane Schmidt, Christine Poitou, Pierre Chandon,
Michèle Chabert, Judith Aron-Wisnewsky, Karine Clément,
Hilke Plassmann, Hilke Plassmann
n FB17
We investigate through a delay discounting model-based approach whether Room 31, Alter Hall
bariatric surgery impacts patients’ self-control abilities, which may contribute to UGC IV - Online Reviews
the success of this weight loss intervention beyond modifying the digestive tract.
Lean controls and bariatric surgery obese candidates perform a delay-discounting Contributed Session
task while their brains were scanned under functional MRI with incentive- Chair: Lakshmi Vana, London Business School,
compatible and monetarily-equivalent food and monetary rewards. We fit from
106 Sutherland Avenue, London, NW9 2QP, United Kingdom,
neuroeconomics literature the “as-soon-as-possible” model, a single-parameter
delay discounting model derived from the hyperbolic model that accounts for not lvana.phd2011@london.edu
only present bias of delay discounting but also time invariance of intertemporal 1 - Review Helpfulness Product Type and Authenticity
choices (i.e. when both a smaller-sooner reward and larger-later reward are offset Can Uslay, Rutgers Business School, Newark, NJ, 08854, United
by the same amount of time). Results show, through discounting parameter States, can.uslay@business.rutgers.edu, Sevincgul (Sev) Ulu,
comparisons, that pre-bariatric obese patients exhibit more delay discounting Sengun Yeniyurt
behavior for food than lean controls. Both groups exhibit no difference in
monetary rewards, and this behavior remains consistent after surgery for obese Consumers increasingly rely on online WOM and helpful reviews for their
patients. Discounting behavior differences between the groups for food rewards purchase decisions. This study examines the influence of product type and
diminish six months after surgery, which is evidence of an effect of the surgery on authenticity on perceived helpfulness. Analyses of seventeen-thousand
behavioral aspects of obesity. Results by the conference will include mediating observations of 40 -roducts under two gender-specific product categories suggest
effects of biological markers and neural correlates to gain a more comprehensive that product category (male versus female), valence, and review-type (verified or
understanding of domain and physiological differences in delay discounting. not) significantly affect review helpfulness. Building on research on selectivity
model and authenticity, we found that women utilize a higher threshold to find a
3 - Pay Now or Pay Later – The Role of Payment Time in Pay What review helpful, and they care more about review credibility than men do.
You Want Pricing Therefore, gender-specific product type is important to understand the nature of
Raghabendra KC, Cambridge Judge Business School, University of helpful votes. We also examine the interaction of rating and gender-specific
Cambridge, Cambridge, United Kingdom, rk492@cam.ac.uk, products on helpfulness, with results suggesting that women are more likely to
Vincent Mak, Elie Ofek vote for negative reviews than men. Verified-review received more helpful votes
for women products and it shows that female consumers have become more
Pay What You Want (PWYW) pricing has garnered substantial attention from discerning in their trust of reviews, and they expect to see evidence and clues of
academics, businesses, policy makers, and the media over the past decade. authenticity than men do. We used Negative Binominal Regression which allows
Existing research has unearthed various mechanisms at play in a PWYW us to manage the features of count data as well as address the heteroscedasticity
exchange and provided substantial information on when and how businesses can in linear regression and the over-dispersion problem in the Poisson regression
take advantage of a PWYW pricing strategy. What is yet to be investigated is how model.Implications: Findings confirm the importance of considering demographic
the impact of these mechanisms varies with the payment decision time. We focus variables when modeling information search behavior. First, findings highlight
on the difference between before and after the seller’s delivery of value to the that gender-specific product types and authenticity of a review contribute to
customer. We propose that, compared with when the payment decision is to be helpfulness. Customizing information presented by gender can provide benefits to
made before the delivery of value, when a seller suggests the payment decision be companies. Online retailers can use new offers tailored to gender-specific
made after the delivery of value, the customer perceives a higher amount of trust requirements to increase perceived helpfulness of reviews and the overall
placed on them by the seller. This increased perceived trust is then reciprocated by platform.
the customer with an increased payment for the received value. In a series of
experimental studies, including two field experiments, we find confirming
evidence that the customer’s reciprocal response is enhanced with a delayed
58
INFORMS MARKETING SCIENCE – 2018 FC02

Panelists
2 - Converge or Diverge Competition in Service Quality Bayer Pharmaceuticals, Bayer, Pittsburgh, PA, United States,
Lakshmi Vana, Assistant Professor of Business Administration, david.jones@bayer.com
Dartmouth College, 100 Tuck Mall, hanover, NH, 03755, Janssen Pharmaceutical Companies of Johnson & Johnson,
United States, prasad.vana@tuck.dartmouth.edu, Sungtak Hong Janssen (J&J), Malvern, PA, United States, dkinney3@its.jnj.com
We use restaurant reviews from Yelp to address the question of how restaurants Genentech a member of Roche Group, Genentech, San Francisco,
use service quality to react to competition. By focusing on businesses that offer CA, United States, purdie.david@gene.com
nearly the same menu of products (e.g., coffee chains), we makes use of customer Novartis Company, Novartis, Philadelphia, PA, United States,
ratings as a proxy for service quality and study how restaurants adjust their kishan.kumar@novartis.com
service quality as local competition intensifies (i.e., as more stores enter a
geographic market) within a price tier and in a different price tier. The findings GlaxoSmithKline GSK, GSK, Philadelpia, PA, United States,
suggest distinct non-linear relationships between the service quality and madhu.x.krishnan@gsk.com
competition within and across price tiers and document the potential mechanism. Pfizer Inc., Pfizer Inc,, Brooklyn, NY, United States,
Ranjit.kumble@pfizer.com
Merck & Co., Merck & Co., Inc, Philadelphia, PA, United States,
Friday, 1:30PM - 3:00PM patrick.howie@merck.com
n FC01 n FC02
Panel: Where Industry Meets Academia: Digital Economy VII: Leveraging Data from
Biopharma Marketing Science Research Needs Digitalization
in a Changing Environment General Session
Panel Session Chair: Eva Ascarza, Columbia Business School, New York, NY, 10027-
6902, United States, Ascarza@gsb.columbia.edu
Moderator: George Chressanthis, Axtria, 315 E. State Street, Berkeley
Heights, NJ, 0, United States, george.chressanthis@axtria.com 1 - The Impact of Subscription Programs on Customers’
Purchase Behavior
Moderator: Murali K Mantrala, University of Missouri, Columbia, MO, Raghuram Iyengar, University of Pennsylvania, 3730 Walnut
65211, United States, mantralam@missouri.edu Street, 700 JMHH, Philadelphia, PA, 19104, United States,
1 - Where Industry Meets Academia: Biopharma Marketing Science riyengar@wharton.upenn.edu, Young-Hoon Park, Qi Yu
Research Needs in a Changing Environment Firms use various methods to boost sales and to keep their customers alive.
George Chressanthis, Axtria, Berkeley Heights, NJ, United States, Recently, subscription programs have become increasingly popular among
george.chressanthis@axtria.com retailers including Amazon (Prime), Sephora (Flash), and Barnes & Noble (B&N
The biopharmaceutical industry has long been used by academicians as an Membership). This type of programs bundle a series of benefits, e.g. free shipping,
incubator for new marketing science innovations as evidenced by a small member-exclusive discounts, etc., for a fixed periodic fee. Despite the popularity
representative sample of the total studies performed references cited here. A few of subscription programs, their effects on sales and customer retention remain
reasons for this keen interest is not only the importance of this industry to overall unclear. In this research, we leverage a unique dataset from a fast moving
societal welfare but also the availability of granular data that allows for the consumer goods company to study the causal effect of customers’ adoption of
applications of new marketing science ideas that would be more difficult to subscription program on their subsequent purchases. The company launched a
perform in other industries. However, the biopharmaceutical industry has been standard subscription program in its online channel in 2015, allowing customers
undergoing dramatic shifts caused by changes in the external environment that to have coupons, free samples, member-exclusive promotions, free shipping,
are altering the metrics that define brand success and new developments in along with other benefits with an annual fee of $50. In order to evaluate the
scientific R&D that have moved drug portfolios toward focusing on large molecule causal impact of this program and to account for the fact that high-value
specialty medicines. For example, biologics account for more than 30% of total customers self-select into the program, we adopt a quasi-experiment setting. We
US drug spending, yet comprise less than 1% of all dispensed prescriptions. More first match each member with a non-member with similar demographics and
new drug applications are classified now as orphan drugs that cater to purchasing records and then estimate a difference-in-differences model on the
personalized targeted therapies and small patient populations. Brand success and matched sample. We find that customers on average increase their monthly
treatment paradigms as assessed by payers and providers are increasingly being purchases by $27 after join the subscription program. Moreover, there is
determined by measures of value such as improvements in health outcomes, substantial heterogeneity in the treatment effects. The subscription program is
overall treatment costs, and cost-effectiveness. These issues are especially acute in more effective on customers with higher initial purchases than those with lower
the area of new oncology drugs where there is significant focus by initial purchases. Customers also increase their consumption variety after joining
biopharmaceutical companies, given their higher costs/risks of R&D and problems the program, suggesting that customers switch their purchase from the firm’s
of affordability/access for payers and patients. This change in assessment has competitors and increase their share of wallet. We confirm this mechanism by
meant the inclusion of claims data and electronic health records to augment demonstrating that customers more willing to try new products experience a
traditional commercial data in the conduct of biopharmaceutical sales and larger increase in their purchases and consumption variety.
marketing analytics in order to achieve process outcomes (e.g., sales force 2 - The Value of First Impressions: Leveraging Acquisition Data for
optimization, marketing-mix, promotion-response modeling, etc.). Customer Management
Biopharmaceutical company commercial operation organizations have been
Nicolas Padilla, Columbia Business School, 3022 Broadway,
reshaping their sales and marketing processes in response to these and other
environmental changes. Yet, one commercial area that has lagged behind in Uris Hall, 5th Floor, New York, NY, 10027, United States,
response to these developments is new marketing science innovations that npadilla19@gsb.columbia.edu, Eva Ascarza
industry practitioners can apply to create solutions within this changing Firms increasingly have access to richer customer data. What a decade ago was
environment. Insights from industry executives from Bayer, Genentech, GSK, merely a transaction added to a customer database has become a collection of
Janssen, Merck, Novartis, Pfizer will be shared in this special panel session. behaviors that a customer engages in while she is making a purchase (e.g.,
whether her purchase was online or offline, whether she used a tablet or
computer, whether she bought a new product or an old best-seller). These data
can be used to form the ``first impressions’’ of a customer based on her initial
transaction. We posit that a customer’s first impressions carry valuable
information for the firm by explaining a large proportion of the heterogeneity in
future behavior, both in terms of what the customer is expected to do (i.e., her
lifetime value) and how responsive she will be to marketing actions. The latter
point is especially relevant for contexts in which firms do not observe many
purchases per individual (e.g., retail) or where targeting occurs soon after
customer acquisition. In these contexts, models that only rely on unobserved
sources of heterogeneity are unable to help the marketer target newly acquired
customers with precision. We develop a model incorporates latent dimensions
extracted from observed heterogeneity—capturing the effect of first impressions—
both in individual propensity to buy as well as responsiveness to the firm’s
marketing actions. Applying the model to data from a retail context, we show
that the focal firm would significantly improve the return on their marketing
actions if it targeted just-acquired customers based on their first impressions.
59
FC03 INFORMS MARKETING SCIENCE – 2018

3 - Hospital Competition and Quality Under Regulated Prices: 3 - Optimizing for Path-dependence in Consumer
Evidence from the Entry of High-Speed Train in South Korea Cross-category Search
Maria Ana Vitorino, University of Minnesota, Minneapolis, MN, Raluca M. Ursu, New York University, 44 West 4th Street,
United States, vitorino@umn.edu, Hyesung Yoo, Song Yao Tisch Hall, New York, NY, 10012, United States,
This paper provides new evidence on the effect of hospital competition on the rursu@stern.nyu.edu, Daria Dzyabura
quality of clinical care under regulated prices by exploiting the entry of the high- In a single shopping session, consumers may be searching for products from
speed train in South Korea. We use a difference-in-differences estimator that several categories. Examples include in store and online grocery shopping,
exploits the differential effects of the entry of the train on patients living in department store visits, or shopping on platforms such as Amazon or Etsy.
different regions of the country and examine the effect of increased hospital Existing models of consumer search, starting with the seminal work of Weitzman
competition on health outcomes, as measured by 30-day mortality rates following (1979), only consider consumer search within one category, where goods are
cardiovascular surgery. substitutes, and the consumer ultimately purchases at most one product.
However, multi-category retailers must optimize their strategy to maximize
4 - Measuring Competition for Attention on Social Media:
consumers’ entire baskets. In addition, existing theory models only consider
NWSL Players on Twitter product specific search costs that are independent of time, which is in contrast to
Federico Rossi, Purdue University, West Lafayette, IL, the consumer behavior literature that has demonstrated consumers’ fatigue while
United States, 1087767, Gaia Rubera evaluating products (Redden, 2007). In this paper, we develop a model of
Despite the increasing use of social media among personalities such as politicians, consumer search across categories where search costs increase over time. We
athletes, and entertainment celebrities, little is known on how hard these popular analyze the resulting model of cross-category search and provide the optimal
users compete to draw the attention of other users. In this research we investigate search strategy for the consumer. We then consider the impact of firm
the level of competition for users’ attention in social media. Using data from recommendations and show that they can increase the size of the basket
Twitter accounts of the U.S. soccer players from the National Women Soccer purchased. We find that the optimal ranking algorithm to maximize sales
League (NWSL), we study how the players’ performance on the field and their recommends least preferred categories first when search costs are increasing. The
social media activity affects the amount of content generated about them. We intuition is that that preferred categories are good candidates for search even in
consider the amount of tweets mentioning an account as proxy for the level of late periods, while less preferred ones can only be searched early, while search
attention captured by the account’s player. In particular, we estimate a demand costs are still low. We provide a theoretical proof for the optimality of this ranking
model where Twitter users decide how to allocate their attention among players algorithm. Finally, we also conduct a series of lab experiments to validate our
by generating content that specifically mentions their account. We show that the results empirically.
attention substitution between players depends on their Twitter activity and their 4 - Avoiding Lemons in Search of Peaches:
performance, but also on personal characteristics, such as physical attractiveness Designing Piecemeal Search
and sexual orientation. We also model the supply side, and show that the
Pedro Gardete, Stanford University, 655 Knight Way, Stanford, CA,
competitive pressure on players to earn attention is directly responsible for a
significant amount of tweets that they would not otherwise send. 94305, United States, gardete@stanford.edu, Megan Hunter
In this paper we develop and estimate a search model with two distinguishing
features: First, consumers learn about each available alternative in a piecemeal
n FC03 fashion, possibly re-visiting alternatives repeatedly in the search process. Second,
consumers take cross-characteristic correlations into account while searching,
such knowledge of a given attribute is informative about the remaining ones. The
Room 34, Alter Hall search model is estimated on clickstream activity on the website of a used vehicle
Advances in Understanding Consumer Search seller. The model is then used to consider an information design problem faced by
the seller, namely, which attributes to feature prominently on the frontpage vs.
General Session which attributes to relegate to vehicle profile pages, the latter attributes requiring
Chair: Pedro Gardete, Stanford University, Stanford, CA, 94305, search to be learned. The model is especially useful to consider information design
United States, gardete@stanford.edu counterfactual scenarios because different available information induces different
search decisions by consumers.
1 - Estimation of Preference Heterogeneity in Markets with
Costly Search
Stephan Seiler, Stanford University, Stanford, CA, United States,
sseiler@stanford.edu, Xiaojing Dong, Ilya Morozov, Liwen Hou n FC04
We study estimation of preference heterogeneity in markets where consumers Room 35, Alter Hall
engage in costly search to learn product characteristics. Costly search amplifies
consumer preferences and translates into more extreme purchase probabilities, Entrepreneurial Sales: Direct Selling Distributors as
thus generating a seemingly large degree of preference heterogeneity. We develop Social Media Agents, Entrepreneurs, and High Flyers
a model of search that allows for flexible heterogeneity in preferences and
estimate its parameters using a unique panel dataset on consumers’ search and
General Session
purchase behavior. The results reveal that ignoring search costs leads to an Chair: Anne T. Coughlan, Northwestern University, Evanston, IL,
overestimation of standard deviations of product intercepts by 30 percent. Using 60208-2008, United States, a-coughlan@kellogg.northwestern.edu
the example of personalized pricing, we illustrate that this bias has important
consequences for targeted marketing. 1 - Using ICT to Empower Women Entrepreneurs in South Africa
William F. Crittenden, Northeastern University, Boston, MA,
2 - Searching for Substitutes: Does Accounting for Consumer Search United States, w.crittenden@northeastern.edu, Haya Ajjan,
Matter for Merger Policy? Victoria L. Crittenden
Elisabeth Honka, UCLA Anderson School of Management,
The role of Information Communication Technologies (ICT) in the empowerment
Los Angeles, CA, 90024, United States,
of women entrepreneurs in emerging economies is a promising area of research.
elisabeth.honka@anderson.ucla.edu, Kalyan Rallabandi, Nathan This study investigates the use of ICT (social and mobile apps) as a mean to
Wilson enhance social capital creation and maintenance specifically within the direct
When firms selling differentiated products seek to merge, a key element of the selling channel. Using a survey of approximately 300 direct sellers in South
antitrust investigation is establishing the extent to which their different products Africa, findings suggest that, in general, technology use does enhance the
compete. In many cases, this involves estimating econometric demand systems women’s ability to create new relationships and to maintain existing community
using observational data. The estimation results often play a significant role in the ties with other direct sellers. Thus, women who might otherwise not initiate
decision-making of both antitrust agencies and judicial courts. In this paper, we communications with someone whom they were not acquainted with are enabled
evaluate the predictions from a demand system which endogenizes consumer to do so through ICT affordances. Strengthening social capital had effects on
search and compare them to those from a full-information model. We do so in the empowerment. It was clear that the strong ties women entrepreneurs create
empirical context of durable household appliances. These markets have been the positively influences the authority and freedom to run their direct selling
site of significant mergers and acquisitions activity in recent years. Our unique businesses, the mastery of the different work aspects of the business, and the
data contain information on consumers’ purchases, considered brands, product impact these women can make in their direct selling community. In addition,
characteristics, and demographics for consumers buying refrigerators, women entrepreneurs who felt part of the broader community and were willing
dishwashers, washing machines, and water heaters between 2008 and 2013. to spend time to support that community were more likely to experience larger
Using our empirical results, we evaluate whether accounting for consumers’ sense of empowerment. Results provide insights into the value of understanding
limited information impacts the enforcement margin in hypothetical merger ICT role in leading positive changes in social capital creation, bonding, as well as
situations. the empowerment of women entrepreneurs.
60

2 - Understanding Social Media Sentiment, Positioning, and style (e.g., compatibility between clothing items, creativity), model style (e.g.,
Engagement and Their Impact on DS Sales Performance facial and body attractiveness), and photo style. We then incorporate them in a
Dana Harrison, East Tennessee State University, Johnson City, TN, dynamic structural model to investigate brand value in relation to style features in
the fashion market. Specifically, we develop and estimate a dynamic structural
United States, harrisondl@etsu.edu, Haya Ajjan, Anne T. Coughlan
model to analyze the content creation and consumption behavior of influencers
Digital platforms have disrupted traditional distribution channels; increasing in a fashion social network community.Our findings suggest significant effects of
exposure to social networks and altering salesperson interactions. Independent brands and style features on the trendiness of a fashion look. We find interesting
sales consultants in direct selling (DS) channels in particular are increasingly substitutability patterns between style features and brand levels. For managers
operating in a digitally connected marketplace where social media based fan pages and influencers in the fashion market, our results provide guidelines on how to
have become an important online information source for consultants and engineer a fashion “look” that can attract the most attention.
consumers. Although the number of DS consultants has steadily grown, DS firms
experience considerable annual turnover. Despite this, DS companies make 2 - Leveraging Deep Learning Algorithms and Field Experiment
significant investments in their consultants and depend upon their relationship Response Heterogeneity to Enhance Customer
and performance for long term success. Interest in understanding the role of Targeting Effectiveness
social media in DS value creation is therefore of strong interest. This study uses a Kunpeng Zhang, University of Maryland, College Park, MD,
novel respondent matched dataset consisting of 176 sales people from a single DS United States, kzhang@rhsmith.umd.edu
firm, which integrates a variety of data types (structured, unstructured,
subjective, and objective) from three different sources: sales consultants’ and Firms seek to understand customer heterogeneity in the response to marketing
consumers’ interactions on a Facebook fan page over 5 year period; a consultant campaigns, which can boost customer targeting effectiveness. Motivated by the
survey; and objective sales performance data provided by the DS company. Using success of modern machine learning techniques, this paper presents a framework
PLS SEM, this research investigates how affective dimensions (positive or that leverages deep learning algorithms and field experiment response
negative sentiment) of exchanged Facebook online messages, social network heterogeneity to enhance customer targeting effectiveness. We recommend firms
characteristics (relational and positional centrality), and online engagement run a pilot randomized experiment and use the data to train various deep
through “likes” and “shares” are related to organizational survey perceptions and learning models. By incorporating recurrent neural nets and deep neural nets,
objective sales performance. Results provide insights into the value of our optimal deep learning model can capture both temporal and network effects
understanding social media network positioning, message sentiment and in the purchase history, after addressing the common issues in most predictive
engagement, as well as the relationship to sales performance and consultants’ models such as imbalanced training, data sparsity, temporality, and scalability. We
satisfaction. then apply the learned optimal model to identify customer targets from the large
amount of remaining customers with the highest predicted purchase probabilities.
3 - High Flyers: An MOA Analysis of Top Performing Direct Our application results support that the optimal deep learning model can identify
Selling Distributors high-value customer targets and significantly lift the sales performance of
Manfred Krafft, University of Muenster, Muenster, Germany, marketing campaigns, compared to industry common practices of targeting by
m.krafft@unimuenster.de, Anne Coughlan, Julian Allendorf past purchase frequency or spending amount. We demonstrate that companies
may not achieve optimal customer targeting not because they offer inferior
Direct selling (DS) companies place strong reliance on their distributors both to campaign incentives, but because they leverage worse targeting rules and select
generate retail sales (acting as salesperson) as well as to recruit/mentor other new low-value customer targets. Overall, deep learning algorithms can be integrated
distributors (acting as sales manager), both of which require relatively uncommon with field experiments to discover a more effective customer targeting rule.
skill sets. Combined with the DS firm’s willingness to register almost all prospects
who wish to join, identifying the characteristics of High Flyers is very useful: DS
firms can use this information to train and support potential and actual High
Flyers, and to maximize their retention. We analyze a broad, multi company n FC06
dataset with thousands of distributors, collected by the Direct Selling Association,
to investigate this issue. DS income and the size of a distributor’s downline Room 234, Alter Hall
(number of other distributors recruited/mentored), two key measures of high
performance, are explained by a set of drivers linked to the MOA (Motivation,
Apps and Engagement
Opportunity, Ability) framework, which has been used to explain performance in Contributed Session
sales, operations, and other performance situations. We find that High Flyers are
most strongly distinguished from other distributors through the Motivation
Chair: Seoungwoo Lee, A.B. Freeman School of Business, Tulane
element, with Ability the next most important framework element - these two University, New Orleans, LA, slee35@tulane.edu, Jie Zhang,
accounting for approximately 90% of the model’s variance. The results show that Michel Wedel
a strong DS Opportunity is of significant value both to High Flyers and non High 1 - How to Market Mobile Apps: The Impact of Mobile Marketing
Flyers, but that personal drivers in the Motivation and Ability areas are the major Strategies on Mobile Branded App Adoption
differentiators between the two groups. We discuss managerial implications as Ning Fu, State University of New York at Binghamton,
well as academic insights arising from our work.
P.O. Box 6000, Binghamton, NY, 13902, United States,
nfu4@binghamton.edu, Qi Wang, Xia Wang
n FC05 With a growing number of branded mobile apps launched on the market,
marketers are facing fierce competition in attracting consumers to download their
apps. As such, many marketers have devoted increased marketing efforts to
Room 232, Alter Hall promote their apps. However, little is known about the effectiveness of mobile
Mobile, Algorithm, and Artificial Intelligence (AI) marketing strategies on consumers’ adoption of branded apps. In this study, we
Session IV: Recommendation Algorithm and investigate if three mobile marketing strategies−mobile advertising, mobile
regular couponing and mobile group-buying couponing−create different impacts
Deep Learning on consumers’ adoptions and how social influences in the virtual environment
General Session (i.e., the installed base of adopters) and in the physical environment (i.e., the
crowdedness in the mall) strengthen or weaken the effectiveness of three
Chair: Xueming Luo, Temple University, Philadelphia, PA, 19122, strategies. Based on a proprietary data collected from a large Chinese shopping
United States, luoxm@temple.edu mall, our study shows that the adoption rate of its branded app is increased with a
large number of regular mobile coupons and group-buying coupons issued, but
Co-Chair: Kunpeng Zhang, University of Maryland, College Park, MD, decreased with a large number of mobile advertising issued. As the number of
75248-4055, United States, kzhang@rhsmith.umd.edu adopters grows, we find that while the positive effect of mobile regular couponing
1 - Design of Fashion: Can Brand Value be Separated from becomes stronger, the positive effect of mobile group-buying couponing and the
Style Value? negative effect of mobile advertising become weaker. Most interestingly, the social
influences of people in the mall (i.e., the crowdedness) create opposite
Kannan Srinivasan, Carnegie Mellon University, Tepper School of
moderating effects on the effectiveness of three mobile marketing strategies.
Business, 5000 Forbes Avenue, Pittsburgh, PA, 15213, United Specifically, as the mall becomes crowded, the positive effect of mobile group-
States, kannans@andrew.cmu.edu, Zijun (June) Shi, Dokyun Lee, buying couponing and the negative effect of mobile advertising becomes stronger,
Param Vir Singh but the positive effect of mobile regular couponing become weaker.
In fashion, consumers value both the brand and the style of an item. On the
firms’ side, they strive to build up brand value and design fashion items for each
new season. However, little empirical study has been done on quantifying the
brand value, style value, and especially the substitutability between them in the
fashion market. In this research, we seek to understand 1) how brands are valued
in the fashion market, 2) how substitutable are brand and style features, and 3)
how to design a fashion look that attracts attention in the online community.To
do so, we collect a dataset from a major online fashion social networking
community. We first employ deep learning based computer vision techniques to
create style features, which quantify a fashion look’s styles, including clothing
61

2 - Feeling Cared, Digitally: The Effect of Family Connectedness on 2 - Cultural Capital and Social Influence in Online Reviews
Seniors’ Mobile Platform Engagement Ashlee Humphreys, Northwestern University, Evanston, IL, United
Lingling Zhang, University of Maryland-College Park, University of States, a-humphreys@northwestern.edu, Rebecca Jen-Hui Wang
Maryland-College Park, 7699 Mowatt Lane, College Park, MD, Decades of research suggest that cultural capital is a meaningful resource, as it
20742, United States, lingzhang@rhsmith.umd.edu, provides a mechanism for achieving status and power within and amongst social
Yiping Amy Song, Pallassana K Kannan groups. Cultural capital can therefore explain differences in taste amongst
The world’s population is growing older, ubiquitously and irreversibly. At a time individuals, groups, and even cities (Bourdieu 1984; Lamont and Molnar 2002;
when life is increasingly shaped by technologies, online media platforms offer a Florida 2010). Much of the existing literature focuses on the association between
unique opportunity for seniors to enrich their life after retirement and reduce cultural capital and expressions of tastes, but not on the social nature of those
loneliness by connecting with either close (i.e., family members) or distant (i.e., expressions themselves. That is, extant findings show that cultural capital shapes
strangers) social relationships. As parent-child relationship is a crucial factor to the way one might review a business, but whether a word-of-mouth (WOM)
the quality of life for seniors and strongly impacts their daily activities, it is message produced by someone with high cultural capital is more or less
naturally interesting to ask to what extent the parent-child relationship influences influential remains an open question. In this paper, we conceptualize cultural
seniors’ engagement with online content and activities. To answer this question, capital and social capital in the context of social media and online communities.
we collaborate with a leading mobile media platform that serves senior citizens in Using a dataset of online reviews and reviewers, we quantify the two constructs.
a major Asian market. The data covers detailed real-time individual-level We then explore how cultural capital manifests in a reviewer’s linguistic
activities over a period of two years. Importantly, the platform enables an characteristics and ratings tendency, as well as social influence and social approval
objective measure of parent-child interactions, which was challenging to obtain in such as networks of friends and ratings.
extant research. Our results not only quantify the impact of the parent-child 3 - Should Companies Encourage Competition in Prosocial
relationship on seniors’ online activities but also identify varying effects: the Crowdsourcing Platform? Empirical Investigations of How
parent-child interactions tend to promote seniors’ individual use but demote their
Competition Outcomes Affect Prosocial Behaviors
social activities on the platform, perhaps because of the substitution effect
between different types of social interactions. Our research contributes to the Yilong Zheng, State University of New York at Oswego, Rich Hall,
emerging literature that relates offline social connections with online technology 7060 NY-104, Oswego, NY, 13126, United States,
adoption and engagement. It has direct implications for policy makers and yilong.zheng@oswego.edu, Qi Wang, Jinfeng (Jenny) Jiao
industry leaders on how to design and promote technology platforms to enhance A growing number of online prosocial-crowdsourcing platforms have adopted
the social care of seniors. contest approach to seeking the wisdom of crowds for solving social problems.
3 - Strategic Upgrading Decisions for Mobile Apps Different from many crowdsourcing platforms on which online users are driven
Seoungwoo Lee, Assistant Professor, A.B. Freeman School of by winning the competition, an ego-centric motivation, participants on prosocial-
crowdsourcing platforms are driven by both winning the competition and helping
Business, Tulane University, 7 McAlister Drive 402V, New Orleans,
others, two motivations−ego-centric and altruistic motivations−that can conflict
LA, 70118-5665, United States, slee35@tulane.edu, Jie Zhang, with each other. Such a unique characteristic of prosocial-crowdsourcing
Michel Wedel platforms can lead to different impacts of competition outcomes (i.e., winning or
This study examines upgrading decisions of mobile apps in conjunction with their losing) on prosocial behaviors. In this study, we examined how competition
versioning decisions and identifies opportunities to improve app publishers’ outcomes influence contestants’ subsequent participation in the winning prosocial
profits and the app distribution platform’s revenue. We build a joint model of app solution. Using data extracted from an online prosocial crowdsourcing platform,
publishers’ upgrading and versioning decisions that incorporates various trade- we tested our hypotheses regarding the main effect of competition outcomes and
offs associated with these decisions, and a demand model of app downloads that the moderating effects of participation type (i.e., group vs. individual
takes into account cross-effects of versioning and upgrading decisions between participation) and social interactions (i.e., peers’ positive vs. negative comments).
the free and paid versions. We calibrate the models using data collected from over We showed that while winning the competition significantly increases
500 apps. Based on results of the demand model, among other things, we find participants’ likelihood to carry out the proposed project in reality, losing hurts
that upgrading one version of an app increases its demand while decreasing the their motivation in doing so. Interestingly, we also found that although
demand for the other version, if it is available. We also find a contemporaneous participating in a group strengthens the positive effect of winning, it also
cannibalization effect between the free and paid versions. These effects speak to intensifies the negative effect of losing. When it comes to the moderating effect of
the importance of jointly studying the upgrading decisions between the free and social interactions (i.e., positive and negative comments that contestants receive
paid version of an app. Our joint model of versioning and upgrading decisions during the competition process), we found that although positive comments
provides estimates of various revenues and costs associated with the two attenuate the positive effect of winning, they can help mitigate the negative effect
decisions. Based on the model estimation results, we conduct a variety of policy of losing. To our surprise, negative comments are found to strengthen the positive
simulations to examine the soundness of certain current practices and to identify effect of winning.
opportunities to improve app publishers’ profits, the app distribution platform’ 4 - Framing Effect of Network Literature on Readers’ Willingness to
revenue, and the eco-system payoff.
Tip: The Mediating Role of Perceived Value
Min Zhang, School of Economics and Management, Southwest
Jiaotong University, Chengdu, China, MinZhang152@163.com,
n FC07 Yuan Yuan Chu, Yu Shi Jiang, Li-li Fan
Room 237, Alter Hall Network literature has become increasingly popular with the rise of social media
in China, and it has generated a new consumer culture-“tipping.” In the Internet
Social Influences context, the relationship between tipper and receiver is essentially a kind of
Contributed Session buyer-seller relationship. The tipping culture, which has brought evolutionary
changes in Internet marketing ideas and marketing modes, has an important
Chair: Min Zhang, No.111, Second Ring Road, Chengdu, China, influence on consumer psychology and behavior. Consumers encountering
MinZhang152@163.com different message framings of network literature on the Internet have distinct
message processing and cognitive responses that will influence their willingness to
1 - Exploring Implicit Brand Networks Using Online Social
tip (WTT). Results of two studies show: (1) that the construal level can moderate
Network Data the framing effect, and a regulatory fit effect exists between message framing and
Jurui Zhang, University of Massachusetts-Boston, 100 Morrissey the construal level, although WTT is generally more motivated by negative
Boulevard, College of Management, Boston, MA, 02125-3393, message framing than positive message framing, and (2) that perceived value
United States, jurui.zhang@gmail.com, Raymond Liu mediates the message framing effect on consumers’ WTT, and the construal level
also moderates this mediation process and has a regulatory fit effect. This research
Online social networking sites such as Twitter and Facebook provide platforms
sheds light on a new economic model to promote the Internet wealth flows that
not only for individuals to connect with friends, but also for consumers to
are characterized by “tipping” and gives practical implications to optimize Internet
connect with brands. This rich network information provides marketers new
marketing strategies and motivate consumers’ rational behavior.
opportunities to infer implicit brand networks. This study explores implicit brand
networks using 3,000 musicians’ Twitter account information including more
than 1 million mostly followed accounts by fans and more than 2 million
hashtags posted on Twitter. Based on the network structure, we detect musician
clusters with similar network characteristics. We further explore what factors are
effective in predicting musician communities. Discriminant analysis shows that
musicians’ online metrics such as the number of tweets and the number of friends
and the content of users’ online comments are important predictors for musician
communities. We also explore how musicians’ implicit network structures
influence their online popularity. We find that ego network density greatly
impacts a musician’s online popularity. These results have important implications
for brand management in the big data environment.
62
n FC08
which runs in polynomial time, can be used to implement the randomized
algorithm. The maximum likelihood value determines a lower bound on the
performance ratio of the randomized algorithm. We employ the proposed
Room 238, Alter Hall approach to infer lexicographic rules for individuals using data from a choice
Consumer Choice Models II experiment for electronic tablets. These rules obtain substantially better fit and
predictions than a previously described greedy algorithm, a local-search
Contributed Session algorithm, and multinomial logit and probit models.
Chair: Rajeev Kohli, Columbia University, 506 Uris Hall, Graduate
School of Business, New York, NY, 10027-6902, United States,
rk35@columbia.edu n FC09
1 - A Model of Multi-category Choice and Quantity Consumed
in Snacks Room 239, Alter Hall
Sriharsha Kamatham, UT Dallas, Richardson, TX, 75080, United Pricing Strategies II
States, sxk152031@utdallas.edu, B.P.S. Murthi, Marina Girju Contributed Session
When snacking, consumers may eat a large variety of snacks within a day. We
develop and estimate a model of category choice and quantity consumed using Chair: Yu-Hung Chen, Doctor, National Taiwan University, Taipei,
individual-level snack consumption data. We use a model derived from random 10617, Taiwan, yhchen@ntu.edu.tw
utility maximization theory that helps us understand variety seeking in a multi- 1 - Information Good Pricing and Consumer Deliberation
category consumption context. The model is derived from the multiple Shan-Yu Chou, Professor, National Taiwan University,
discrete-continuous framework proposed by Bhat (2005, 2008), Kim et al. (2002), Dept of Bus Admin, 1 Sec. 4 Roosevelt Road, Taipei, 106, Taiwan,
enabling us to study variety seeking using the nested structure of snack brands
chousy@ntu.edu.tw, Chyi-Mei Chen, Chung-Ting Tsou
and product categories. In the model, we are able to estimate the effects of state
dependence and satiation with respect to calories consumed, in addition to the This paper intends to analyze the pricing mechanisms of information goods when
effect of individual characteristics and contextual variables. We find that different firms facing consumers with uncertain use frequency and need to incur a
product categories exhibit different levels of inertia and satiation. The model deliberation cost to discover their use frequency. There are two mechanisms,
suggests different mechanisms for targeting heavy snack consumers. selling, where up-front payment allows unrestricted use, and pay-per-use, where
payments are tailored to use. Following Balasubramanian et al. (2015), we
2 - Uncovering Shopping Goal Structure from Consumer assume that paying-per-use impose some disutility on consumers, termed as
Purchase Histories psychological cost. We show that adopting both selling and pay-per-use schemes
Yang Pan, University of Iowa, S252 John Pappajohn Business in a monopoly yields the highest profit when the deliberation cost is sufficiently
Building, Department of Marketing, Iowa City, IA, 52242, low and the psychological cost is sufficiently high. If the deliberation cost is not
United States, yang-pan@uiowa.edu, Gary J Russell low enough, then the monopolistic firm will optimally use a single pricing
scheme, either selling only or pay-per-use only to induce impulse buying to avoid
Consumer behavior in a retail setting is goal-directed behavior. Motivational the costly consumer deliberation. In this situation, if consumer deliberation cost is
theories of social psychology suggest that shopping goals influence consumers’ high enough, selling scheme is preferred to pay-per-view scheme and optimal for
behaviors and actions. Shopping goals can be abstract or concrete under the firm in that consumers, facing selling scheme, will voluntarily make
deliberate or implemental mindset. Concrete shopping goals also vary across purchasing decisions without deliberation even without price discounts. On the
consumers. Overall, within the same retail setting, different consumers may vary other hand, if deliberation cost is not sufficiently high, then pay-per-view may
in their shopping goals, which will be reflected in consumers’ intrinsic category yield a higher profit than selling provided the associated psychological cost is low
preferences that can be identified from consumer shopping histories. In this enough. In the duopoly model, we show that when consumer deliberation cost is
paper, we study shopping goals in a specific retail setting: a convenience store low relative to psychological cost, then in equilibrium the two competing firms
chain primarily located in the Midwestern United States. We assume the basket can both make profits by differentiating their pricing schemes, one offering
choice within each shopping trip follows a Multivariate Logistic Model. From this, selling-only scheme and the other offering pay-per-view only. When consumer
we derive that the short-run basket counts within each week follow the Poisson deliberation cost relative to psychological cost is not low enough, the two firms
distribution. We then identify the short-run basket model by a two-step cannot soften price competition by employing different selling schemes. In
procedure. In the first step, we analytically aggregate the short-run basket model particular, the firm employing pay-per-view, facing the associated consumer
over time to obtain the long-run basket model, which also takes the form of psychological cost, cannot make profits.
Poisson. We use the long-run basket data to obtain a consistent estimation of
consumers’ category preferences, which provide us some insights into the 2 - Optimal Design for Pay-what-you-want Pricing
structures of concrete shopping goals. In the second step, we combine short-run Ranjit M. Christopher, Asst. Professor, University of Missouri -
basket data and the estimates from the first stage to identify the rest of the Kansas City, 4768 Oak St, Apt 518, Kansas City, MO, 64112,
parameters in the short-run model. We report on an application of the model to United States, christopherra@umkc.edu,
consumer choice histories from the convenience store retailer.
Fernando Sobral Machado
3 - The Effect of Perceived Cost on Package Choice and Purchase Pay-What-You-Want (PWYW) is an interesting pricing mechanism where firms
Quantity Decisions relinquish pricing power entirely to consumers. Despite recent attention in the
Haruka Kozuka, PhD Student, Keio University, Minato-ku, Shiba, topic, the existing empirical research has lacked solid grounding on a theoretical
5-11-4, Tokyo, 1080014, Japan, haruka.11.kozuka@keio.jp model of consumer choice and has provided partial and mixed evidence on the
conditions under which PWYW may be profitable. In this research, we employ a
The purpose of this study is to clarify how consumers’ perceived cost affects
three-pronged approach to address how firms can use managerially controllable
package choice and purchase quantity decisions. This paper assumes that unit cost
variables such as payment anonymity and price recommendations to optimize the
consumers perceived from package size and type is a determining factor of
design of PWYW pricing to maximize firm goals such as market penetration and
consumers’ decisions — “which” and “how many” packages they should
revenues. First, we propose a simple theoretical model to derive conditions under
purchase. Then the research proposes a choice model which extends Bhat’s
which consumers will opt-out of the PWYW exchange, free ride, or make a freely
(2005) choice model by incorporating the influence of unit cost. For model
chosen positive payment. Our model explicitly accounts for variations to both
estimation, this paper uses experimental data collected from consumers’ package
consumers’ ease of participating and their valuation of the good under a PWYW
choice of a certain brand with three different packages design. The result of model
exchange contingent on the type of design employed. Second, by specifying
comparison shows that the fitness of our choice model is better than a choice
consumers’ ease of participation and their valuation as latent variables and
model not incorporating the effect of unit cost. In the result of model estimates,
functions of both the reservation price of the good under fixed-pricing and design
we find that unit cost, such as the cost for inventory, quality deterioration and
variables, we derive a statistical estimation procedure to identify the parameters
shortage, influences on satiation of product utility. In addition, it indicates that
of the theoretical model. Third, using a controlled experiment, we generate a
consumers’ heterogeneity affects the impact of unit cost on decision making.
sample of consumer responses to a generic PWYW design in order to calibrate
4 - Randomized Algorithms for Lexicographic Inference model parameters, validate our theory, and compute optimal values for
Rajeev Kohli, Ira Leon Rennert Professor of Business, Columbia managerially controllable pricing design variables. Finally, we discuss how
University, 506 Uris Hall, Graduate School of Business, New York, managers can employ our approach to optimize PWYW pricing specific to a
product/market context.
NY, 10027-6902, United States, rk35@columbia.edu,
Khaled Boughanmi, Vikram Kohli
The inference of a lexicographic rule from paired comparisons, ranking or choice
data is a discrete optimization problem that generalizes the linear ordering
problem. We develop an approach to its solution using randomized algorithms.
First, we show that maximizing the expected value of a randomized solution is
equivalent to solving the lexicographic inference problem. As a result, the discrete
problem is transformed into a continuous and unconstrained nonlinear program
that can be solved, possibly only to a local optimum, using standard nonlinear
optimization methods. Second, we show that a maximum likelihood procedure,
63

3 - Why Doesn’t Every Paywall Pay Off? The Spillover Effect of a shift among any of the product types. Of particular long-term import are donors
Paywall on Print Subscription who start giving sporadically, but convert to a commitment to donate a specific
Reo Song, California State University-Long Beach, 1250 Bellflower amount on a regular basis. Understanding and enhancing donor subscription is
important for charities: not only subscription donations comprise a sizable
Boulevard, CBA 354, Long Beach, CA, 90840, United States,
proportion of their revenue, they also allow stable financial planning by reducing
reo.song@csulb.edu, Ho Kim year-to-year volatility. We focus on this process of individual-level donor
This paper investigates how installing a paywall for the online content of a conversion. Using hierarchical clustering to classify donation trajectories suggests
publisher affects the sales of its print edition. We call this the ‘spillover effect of a that donors who convert show significant upticks in activity just prior to
paywall.’ We first conduct a theoretical analysis to examine how the spillover conversion. The conversion process itself can be modeled via survival analysis,
effect of a paywall is influenced by the price and content characteristics. and shows that number of donations is a strong predictor of eventual conversion.
Theoretical analysis shows that the print subscription price negatively influences However, survival analysis’s presumption that every unit will experience the
the spillover effect, while the digital subscription price can have either positive or event - i.e., that all donors will eventually convert to an ongoing commitment - is
negative influence, depending on the different types of spillover effect. It also unrealistic, as many non-committed donors are likely ‘dead’, that is, to remain
shows that content attributes directly influence the spillover effect. We then forever in that state. We propose novel extensions of the classic hierarchical Bayes
develop an empirical model to examine the spillover effect of a paywall in the survival model to accommodate this critical feature.
U.S. newspaper industry. Empirical analysis finds that both the print and digital
price have a negative influence on the spillover effect of a paywall, suggesting
3 - Re-examining Net Promoter Score: Are Passives Truly Passive?
that the print and digital editions of a newspaper are complementary. Hyunhwan Lee, Marketing PhD Candidate, University of Miami,
Furthermore, the spillover effect is nearly twice as sensitive to the change in School of Business Administration, Coral Gables, FL, 33124-6520,
digital price as it is to that in print price (elasticity: 2.22 for digital subscription United States, hlee@bus.miami.edu, Joseph Johnson,
price; 1.38 for print subscription price), although the average digital subscription Michael Tsiros
price is lower than the average print subscription price by a factor of 4.4.
Since its introduction, Net Promoter Score (hereafter, NPS) has gained wide
Empirical analysis also finds that newspapers with a larger print circulation, more
industry acceptance as a measure of customer satisfaction. Many managers
unique content, and a more politically conservative view perform best with a
continually track NPS to monitor the health of their businesses. One reason for its
paywall.
popularity is its simplicity. Using just one question, we can assess a firm’s NPS as
4 - Revenue Sharing for Radiation Treatments Between Equipment the difference in the percentage of promoters and detractors. NPS researchers
Vendors and Hospitals claim that promoters are growth catalysts because they spread positive word of
Yu-Hung Chen, National Taiwan University, No.1, Sec. 4, mouth while detractors are a drag on growth because they spread negative word
of mouth. Passives are ignored in NPS calculations. Is it not worth listening to
Roosevelt Rd, Taipei, 10617, Taiwan, yhchen@ntu.edu.tw,
passives? Do they not talk much? Surprisingly, there are no studies that examine
Ling-Chieh Kung, Jun-Yu Yu, Hsin-Jung Tsai, Yu Jen Wang these questions. By ignoring the passives, firms may be ignoring a segment that
We study the contracting problem between an equipment manufacturer and a holds the key to their future growth. Using text mining and machine learning
hospital for radiation treatment. The manufacturer has private equipment methods on survey data from the vacation industry, we find that passives talk
reliability information that prevents the hospital to pay a high price for a reliable more and discuss different topics compared to promoters and detractors. By
machine. In this environment, we show that the popular revenue sharing listening to its passives, a firm can improve its satisfaction score because passives
contract can serve as a signaling device and enhance the system efficiency. It is give more quality feedback than others. We validate our findings using 18 years
shown that signaling through revenue sharing is more effective for not-for-profit of Amazon reviews across 24 product categories. Our findings imply that focusing
hospitals than for for-profit ones. on promoters and detractors alone is a misleading indicator of a firm’s growth
potential. Therefore, we propose a revised metric, Weighted Promoter Score
(WPS). WPS weights NPS by the proportion of each segment and tracks a firm’s
growth ‘potential’ better than NPS.
n FC10 4 - The Adverse Impact from the Measurement and Dissemination of
Room 605, Alter Hall Customer Satisfaction Ratings
Customer Relationship Management II Scott A. Fay, Professor of Marketing, Syracuse University,
Whitman School of Management, 721 University Avenue,
Contributed Session Syracuse, NY, 13244-2450, United States, scfay@syr.edu
Chair: Nanda Kumar, University of Texas at Dallas, Richardson, TX, Credence qualities are product or service attributes that cannot be observed and
United States, nkumar@utdallas.edu fully assessed by consumers even after consumption. The primary purpose of
1 - Chasing Mirages? Impact of Loyalty Programs on Customer Trust many services, such as automotive repair, health care, and education, is to deliver
credence qualities to consumers. However, many of these same services also
and Repurchase Intentions
deliver experience qualities (such as the comfort of the waiting room, friendliness
Shawn Mathew, Independent Researcher, Kochi, India, of the service provider and entertainment value of a lecture), which are service
shawnmathew@iima.ac.in, Joshy Joseph attributes that can be evaluated by consumers immediately after consumption. In
Loyalty programs count among the most popular marketing schemes used by this paper, I find that as the saliency of experience qualities increases (e.g., due to
firms to lure and retain customers, yet a large majority of the programs fail to the service providers conducting surveys of customer satisfaction), service
enthuse customers in the longer run due to the lack of appropriate perceived providers increase their total provision of quality. However, an increase in
benefits. Badly designed loyalty programs are perceived to be shams by even the salience of experience attributes alters the mix between investments in
most loyal customers because they produce liabilities under the guise of rewards experience vs. credence qualities, so that firms invest more in experience
(e.g. build-up of airline loyalty points at extra cost without possibilities of attributes but less in credence attributes. The interesting and counterintuitive
complete redemption). This perception of inbuilt unfairness in the loyalty implication of this result is that consumers can be worse off when their
programs has a negative impact on customer trust and repurchase intentions, satisfaction is assessed and these ratings are used by the service provider to guide
specifically when the reward redemptions are not upfront and hidden in the fine investment decisions. Such an adverse impact arises when the (unobservable)
print. This ongoing research uses a mixed method approach to derive from credence attributes have a sufficiently large impact on consumers’ overall utility
qualitative interviews, lab experiments and a field survey to analyse the impact of (and thus the shift in investment away from credence attributes strongly
loyalty programs, which create perceptions of unfairness, on the customer’s undermines consumer welfare).
relationship with the brand. The studies are based in the Airline domain and 5 - Effect of Appeal Content on Fundraising Success and
specifically looks at loyalty programs which results in accruing loyalty points
without fair chances of complete redemption. The results can provide insights
Donor Behavior
into complex trade-offs customer face while making choices and the possible Nanda Kumar, University of Texas at Dallas, Richardson, TX,
negative impact of such loyalty programs. The article contributes both United States, nkumar@utdallas.edu, Sriharsha Kamathan,
conceptually and empirically to research on loyalty programs, to establish the Juncai Jiang, Parneet Pahwa
impact on customer trust and repurchase intentions in such scenarios. The Many fundraisers, for instance, K-12 public schools and charter schools
research insights will help marketing managers and researchers evaluate and particularly in high poverty areas do not have the resources to reach out to
improve loyalty program effectiveness. donors nor do they have the time to strategize to achieve their fundraising
2 - Predicting Commitment: Understanding Donor Conversion to objectives. Teachers and students in these schools have a variety of needs which
Contractual Giving are not met because of inadequate funds. Aside from requesting the local
community for financial support, many teachers in these schools use platforms
Gwen Ahn, University of Michigan, 710 East University Executive
such as DonorsChoose.org to appeal to the broader community for financial
Residence ER4610, Ann Arbor, MI, 48109, United States, assistance. These appeals typically provide a brief description of the students in
geunhae@umich.edu, Fred M Feinberg the school, the needs that they have and how the fundraising effort will impact
Charities seek donations in many forms, relying on a variety of donation their learning objectives. The goal of our study is to uncover the elements of the
“products” to achieve their funding targets. Especially prized is committed giving appeal that drive both the success of the fundraising effort and donor behavior.
(subscription) - donors’ agreeing to a pre-set amount every month (or year) - as We want to understand how the length of the appeal, the sentiment of the appeal
opposed to sporadic non-committed giving of any amount at any time. A pivotal impacts the success of the fundraising effort and the amount donated by the
and complex feature of the charity-donor relationship is that donors can flexibly donors. We also want to examine how the information that is displayed on the
platform impacts the amount donated by donors.
64
n FC11 n FC12
E-Commerce 2 Methods – Mediation, Moderation & Segmentation
Chair: Yong Chin Tan, Singapore Management University, Chair: Spyros Zoumpoulis, INSEAD, 15 Rue Daubenton, Paris, 75005,
113 Lorong 1 Toa Payoh, #05-460, Singapore, 310113, Singapore, France, spyros.zoumpoulis@insead.edu
yc.tan.2014@smu.edu.sg 1 - Asymmetric Relations and the Friendship Paradox
1 - Effect of Freight Subsidies on High Value and Expensive to Malek Ben Sliman, Ph.D. Candidate, Graduate School of Business,
Ship Products Columbia University, 5j Uris Hall, Graduate School of Business,
Fan Yang, University of British Columbia, 2111, Lower Mall, New York, NY, 10027, United States,
Vancouver, BC, V6T 1Z4, Canada, fan.yang@sauder.ubc.ca, MBensliman20@gsb.columbia.edu, Rajeev Kohli
Chunhua Wu, Charles B. Weinberg The friendship paradox says that your friends have more friends than you do. The
In practice, many firms use partitioned pricing strategy, listing both product price result relies on the symmetry of friendship - if I am your friend, then you are also
and other price component such as shipping fee, separately. For this study we my friend. We generalize the paradox to allow asymmetric (leader-follower)
focus on an online seller of building products and examine the impact of a freight relations, such as those between Twitter followers and their leaders. We show that
subsidy on clickstream behavior and on sales. One key issue is consumers’ a person has, on average, as many leaders as followers, and that this common
sensitivity to the two price components—the price of the product itself and to average is no greater than the average number of followers per leader and leaders
freight. As freight costs on average account for 17% ($260) of the product sales per follower. The result implies that, for example, the people you follow on
price, knowing the differential response, if any, to product promotions and freight Twitter are potentially more influential than you (because they have more
promotions is crucial. Studies of consumer products, e.g. the sale of online books, followers than you) and the people who follow you are more connected and
has found such a differential response, but that is for relatively low value potentially better informed than you (because they follow more people than
products. In this paper, we develop a structural model to estimate consumers’ you). In the friendship paradox, the difference between the average number of
sensitivity to the two different partitioned components using clickstream data friends of friends and the average number of friends increases with the variance
(including purchase data with detailed price and cost information) from an online in the number of friends. In the present generalization, the difference between
shopping platform. The company implemented two freight subsidy promotions the average number of followers per leader and the average number of followers
during the time of our study. Focusing on the results for freight subsidies, we find increases with the variance in the number of followers; and the difference
that shoppers are responsive to price promotions on freight in terms of conversion between the average number of leaders per follower and the average number of
rate, however the effects on search behavior and total revenue are more nuanced. leaders increases with the variance in the number of leaders. We analyze a sample
Managerial implications of these results are presented. of over 28 million Twitter users and 193 million followers and leaders. On
average, a person in the sample has about 19 followers and leaders each, 1,250
2 - Optimal Utilization of Daily Deal Promotion in followers per leader and 281,000 leaders per follower. We examine the
Competitive Environments distributions of the number of leaders, the number of followers, the leaders of
Seong Kyoung Shin, Purdue University, West Lafayette, IN, 63117, followers, and the followers of leaders. All four distributions have long tails. A
United States, shin182@purdue.edu, jia li log-normal distribution characterizes the number of leaders in the data. The
distributions for the number of followers and the average number of leaders per
Over the past years, daily deal platforms such as Groupon have been popular and follower are both bimodal. This is consistent with a large fraction of users having
become the important format to connect customers and local merchants that offer very few followers, a smaller fraction belonging to interest-based communities,
activities, goods and services. Although daily deal promotion generates and a still smaller fraction of users being celebrities with large numbers of
incremental revenue, it is harshly criticized due to deep discounts, cannibalization followers.
and high commission. However, plenty of merchants still use daily deals because
most local merchants not only have difficulties to advertise their business, but 2 - Latent Variable Moderation Analysis in Marketing Research
also to face intense competition. Previous literature investigates whether daily Constant Pieters, Tilburg University, Tilburg, Netherlands,
deals are beneficial to merchants or not, but a competitive environment is not c.pieters@tilburguniversity.edu, Rik Pieters, Aurelie Lemmens
taken into consideration. In this research, we would like to understand the value
of daily deals for local merchants in competitive markets based on transaction Moderation analysis is common in marketing. It examines whether the effect of
data of merchants in China. Specifically, we develop a model to figure out variable X on Y is conditional on another variable Z. At least one of the variables
whether daily deals can be helpful for merchants to compete with others and how X and Z is often a latent construct, measured with multiple items. In such “latent
merchants make the optimal decisions when they offer daily deals. Our data moderation models”, the challenge is to identify the underlying moderation
reveals whether customers redeem daily deal vouchers upon their visits, which effect, while correcting for measurement error in the items. Improperly
helps us examine the role of daily deals in competitive circumstance. Thus, we accounting for measurement error increases the potential Type M (magnitude)
can explore not only how merchants to utilize daily deals strategically, but also and Type II error. Our study examines the various methodologies used in
how daily deal platforms manage their business more successfully. marketing research to deal with latent moderation, and how well these
methodologies are able to capture the true underlying conditional effect. First, a
3 - Information Targeting in Customers’ Online Purchase Journey review of 98 articles published in Journal of Marketing and Journal of Marketing
Yong Chin Tan, Singapore Management University, Singapore, Research between 2000 and 2017 reveals that about 90% of hypothesized
Singapore, yc.tan.2014@smu.edu.sg, Srinivas Reddy, moderation effects are tested with an “observed moderation” approach, which
Sandeep R. Chandukala does not account for measurement error. The remainder of the tests use a “latent
measurement moderation” approach or a “latent structural moderation”
Online retailers often provide additional information related to product popularity approach, which do account for measurement error. Second, typical data from the
(e.g., number of customers who viewed / purchased) or scarcity (e.g., number of reviewed articles is simulated for Monte Carlo simulations. These show that the
units available) to persuade customers to purchase. However, the impact of observed moderation approach attenuates the estimated moderation effect by
providing these information in an online environment is not well understood. For about 25%, whereas there is minimal bias for the latent moderation approaches.
example, it is unclear if these information should be presented in early stages of Ironically, the latent moderation approaches increase the multicollinearity
the decision-making process when customers engage in exploratory browsing, or between the predictors in the model. Whereas multicollinearity increases the
later stages after they have narrowed their consideration sets. In addition, the standard error of the main effects and moderation effect, which is well-known, it
impact of presenting these different types of information on customers’ online also increases the reliability of the moderation effect, which decreases the bias.
purchase journey have not been investigated. Using a series of field experiments, Unsurprisingly, multicollinearity decreases the power to find true main effects,
the current study examines how the type of information, the way it is presented, but surprisingly it also increases the power to find true moderation effects. These
and where it is presented in customers’ decision-making process influences results demonstrate the importance of controlling for measurement error in
website engagement, product consideration, purchase conversion, and post- moderation models: reducing estimation bias while maximizing statistical power
purchase product returns. The moderating effects of various product and to find the true moderation effects.
customer characteristics are also explored, allowing retailers to target information
presentation based on these characteristics.
65

3 - Efficiently Evaluating Targeting Policies using Field Experiments 3 - Dynamic Adoption and Usage of the Online Crowdfunding
Spyros Zoumpoulis, 15 Rue Daubenton, Paris, 75005, France, Platform: Evidence from United States Public School Teachers
spyros.zoumpoulis@insead.edu, Duncan I. Simester, Baek Jung Kim, New York University, 40 West 4th Street, Tisch
Artem Timoshenko Hall, New York, NY, 10012, United States, bkim2@stern.nyu.edu,
Firms often want to target different customers with different actions, and the Masakazu Ishihara, Vishal Singh
marketing literature contains many models designed to optimize targeting Public school education (K-12) is crucial for communities to thrive and for the US
policies. While these models are sometimes validated using simulations or economy to offer broad opportunity, but education budgets have declined
historical data, the gold-standard approach to comparing alternative targeting dramatically in a number of states since the Great Recession. Consequently, public
policies is to implement the alternative policies on randomly selected groups of school teachers have had to find alternative resources to compensate for these
customers and then compare the aggregate outcomes. We show that we can budget cuts and have turned increasingly to online crowdfunding—raising money
improve the efficiency of these comparisons by using the same experiments but from a large number of people, usually in small increments, via the internet. In
changing the analysis. Instead of comparing the aggregate outcomes, it is more addition to financial need, peer effects (or network effects) have contributed to
efficient to compare the outcomes within each customer segment, where the the popularity of this platform, meaning that once one teacher in a school starts
segments are defined using the candidate policies. Differencing within segment to use crowdfunding, the rest of the teachers often follow. To investigate the
reduces variation introduced by between-segment differences, and we can then impact of education budget cuts and peer effects on the use of online
aggregate the within-segment differences across segments. Our key contribution crowdfunding platforms, we used a crowdfunding website’s data on
is to show that the choice of the segments is important: we propose segmenting approximately 400,000 teachers from 70,000 public schools (in all fifty states) for
the participants using the actions recommended by the candidate targeting 13 years (from 2002 to 2014) in combination with the Common Core Data to get
policies. This can greatly improve efficiency. We illustrate this benefit fiscal and demographic information on public schools. Based on the data, we
theoretically, and also empirically, using data from a recent large-scale field build a dynamic structural model of public school teachers’ decisions regarding
experiment (4.1 million households) we designed. We also show how this platform adoption and project posting.Using estimates provided by the structural
segmentation approach extends to an alternative experimental design and model, we conduct a policy experiment to examine the marginal effects of
identify limitations that may hinder its implementation. education budget cuts and its geographical variation on teachers’ adoption and
usage decisions. Specifically, we quantify not only the temporary effect, but also
the long-term effect that accounts for the peer influence as a multiplier effect.
n FC13 Our findings will help the government improve the geographical inequality of
public school funding.
New Products and Adoption
n FC14
Contributed Session
Chair: Baek Jung Kim, New York University, New York, NY,
bkim2@stern.nyu.edu, Masakazu Ishihara, Vishal Singh Market Competition
1 - What Can Pre-release Search Traffic Profiles Tell Us? Contributed Session
Oliver Schaer, Research Student, Lancaster University, Bailrigg, Chair: Jianhui Li, Johns Hopkins University, Baltimore, MD,
Lancaster, LA1 4YX, United Kingdom, o.schaer@lancaster.ac.uk, jli123@jhu.edu
Nikolaos Kourentzes, Robert Fildes 1 - Certification Reputation and Entry an Empirical Analysis
Pre-release forecasting is a vital task for organisations to adjust advertising Xiang Hui, MIT, Cambridge, MA, 02139, United States,
strategies and operational decisions. Past studies have demonstrated the predictive xianghui@mit.edu, Maryam Saeedi, Giancarlo Spagnolo,
value of pre-release buzz for forecasting the adoption of new products. Previous Steven Tadelis
approaches that rely, for example, on functional principal components, or similar
approaches, do not investigate specifically for potential similarities of pre-release How does quality-certification affect product quality in markets? We exploit a
buzz and product success. We propose to construct profiles of pre-release buzz policy change on eBay to analyze how a more stringent certification policy affects
patterns and associate them with product success. The resulting model allows entry and behavior across many markets segments. We find that first, entry
forecasting the success of a new product by observing its relatively easy to increased in markets where it was harder to get certified, until a new steady state
measure pre-release buzz. This approach will not only provide marketers with was reached. Second, the quality distribution of entrants exhibits fatter tails after
useful information about their own products but will also allow to gain insights the policy, and overall quality is slightly higher. Last, some incumbents respond
about the competition, as pre-release buzz is publicly available, for example via by increasing the quality of their service to maintain certification. The results
online discussions and searches. We test our approach on video games sales inform the design of certification policies in electronic and other markets.
where we aim to investigate how using pre-release search traffic clusters from 2 - Spatio-temporal Propagation of Asymmetric Inter and Intra-
Google Trends differs compared to profiles of (i) product features clusters and (ii) channel Effects of Competitive Price Promotions
life-cycle sales. Finally, we assess the predictive horizon of the approach, as to
Priyanka Gupta, Nanyang Business School, 50 Nanyang Avenue,
demonstrate when such signals become available.
Singapore, 639798, Singapore, priyanka012@e.ntu.edu.sg,
2 - Integrating Learning Process into Case-based Decision Theory Sadat Reza
Kanoko Go, Niigata Sangyo University, 4730 Karuigawa, Cross-price elasticities have been widely examined in the empirical marketing
Kashiwazaki, Niigata, 945-1393, Japan, kgo@econ.nsu.ac.jp, literature. Typically, time-series observations on store-category combinations are
Yutaka Hamaoka used in a vector autoregressive framework to estimate the temporal, either short
In marketing, consumer decision-making models based on consumer demand or long term, cross-price promotional effects. An important assumption in
theory (Lancaster 1971) and the multi-attribute attitude model (Fishbein 1963) applying such framework is that the store level outcomes are independent of each
are popular. These models assume that consumers dissect products into their other. In many contexts, particularly in cities where there are a large number of
attributes, assess their importance, and then integrate this into the overall product closely situated retailers, such independence assumption may not be tenable.
evaluation. However, if the product was a complex or new product, or if Therefore, a more suitable empirical framework must take into account the
consumers lacked sufficient knowledge and/or ability to process product spatial connectedness among these retailers. Spatial connectedness also raises
information, these assumptions may not hold. To model consumer decision- another set of questions on the asymmetry of inter and intra channel effects of
making in such situations, Gilboa and Schmeidler (1995, 2001) proposed price promotions. Related questions have been examined in the context of market
case-based decision theory (CBDT)—a decision rule that consumer utilize their entry, but to our knowledge there is no empirical investigation on inter- and
past experience in similar circumstancess.We confirmed original CBDT model fits intra-channel cross-price elasticities using a framework that allows for spatio-
better than the multi-attribute attitude model for consumer evaluation of a really temporal dependence of outcomes. In this study, we use a spatial panel
new product under an experimental setting and panel data of detergent. vector-autoregressive model to examine both temporal and spatial impulse
Although original CBDT assumes consumers retrieve past experience from their responses of cross-price promotions. We discuss the necessary identification
memory, consumers acquire product information from external information restrictions required for estimation of spatial and temporal impulse response
source to reduce uncertainty. We integrated learning process into Case-Based functions. Our results indicate that at an individual store level, the asymmetric
Decision Theory (CBDT) and validated it with “IRI Marketing Data Set” which cross-price promotion effects that have been widely discussed in the literature are
records the several consumer commodity goods and marketing variables.3 not generalizable. We also find that there is significant asymmetry in the inter-
and intra-channel effects, whereby a dominant channel is less affected by the
smaller channel, but the reverse effect is significant. We discuss the managerial
implications of our findings.
66

3 - Dynamic Pricing of Complementary Goods with 2 - Dynamic Model of Consumer Learning and Forgetting for
Product Incompatibility Seasonal and Limited Releases
Jianhui Li, Johns Hopkins University, 3100 Wyman Park Dr, Minjung Kwon, NYU, 40 West 4th Street, New York, NY, 10012,
Baltimore, MD, 21211, United States, jli123@jhu.edu United States, mkwon@stern.nyu.edu, Masakazu Ishihara,
In many complementary goods markets, including tied goods, hardware and Andrew Ching, Makoto Mizuno
software, platform and applications, products are often incompatible across brands Previous literature on forward-looking Bayesian learning models has assumed
or technologies. In the Men’s shaving market, razors and blades are incompatible consumers don’t forget information about brand quality once learned, e.g., Erdem
across brands and across different technologies with the same brand. Product and Keane (1996). However, given that our memory is often imperfect, the
incompatibility has important implications on the optimal pricing strategies of existing models potentially overestimate the role of the strategic sampling; that is,
razors and blades. Consumers are locked in by their razor adoption decisions. consumers may forgo current utility to get information about brand quality,
Firms would set the price of razor low to attract more consumers and then receive because the failure to account for forgetting results in the underestimation of the
a high revenue stream in the future by setting a higher price for blades. This variance of quality belief. We propose and estimate a dynamic structural model of
paper empirically studies the impact of product incompatibility on market consumer learning and forgetting using scanner data for the beer category where
competition and consumers’ welfare in complementary goods markets. Four one can observe seasonal and limited release products that are typically
questions are answered: What are the consumers’ technology adoption and unavailable for an extended period between seasons. The periodic availability of
upgrading patterns under product incompatibility in complementary goods those products provides a unique opportunity to examine the role of forgetting
market? What are the optimal pricing strategies for complementary goods? How over time, because the brand-switching patterns may imply periodic needs for the
does product incompatibility affect the optimal pricing strategies? And how does strategic sampling; that is, consumers switch across brands early on in each season
product incompatibility affect consumers’ welfare? In the empirical application of even if they had settled on a small subset of brands because uncertainty had been
US Men’s shaving market, I develop a dynamic structural model of consumer mostly resolved in the previous season. In addition, we propose a novel
demand and oligopoly pricing game of razors and blades. The model is estimated identification strategy for forgetting. By assuming a “one-period” learning process
using a household level consumer panel data from 2004 to 2015. I solve for the and distinguishing between “informative” and “prestige” advertising effects
counterfactual market equilibrium in which razors and blades are compatible (Ackerberg 2003), we rely on the variation in the advertising effects over two
across brands. Firms will also re-optimize their pricing strategies of razors and consecutive seasons to identify the forgetting of the previous use experience.
blades. On one hand, firms lose the market power in the blade market. On the Under the perfect recall of product quality, the advertising effects should remain
other hand, the market expansion effect of product compatibility may help firms constant over time, conveying only “prestige” effects after the initial use
gain higher profits. Combining the changes in the consumers’ welfare and firms’ experience despite an extended period of the products being unavailable. By
profits, the net welfare effect is evaluated to illustrate the impact of product contrast, if the use experience is forgotten during the off-season, the addition of
compatibility. I find that product incompatibility contributes to the Razor and “informative” effects should increase advertising effects in the beginning of the
Blade business model. subsequent season.
3 - Does Information Mitigate Behavioral Gaps Due to Market
Inexperience? Evidence from a Field Experiment
n FC15 Uyen Tran, University of Chicago, 5807 South Woodlawn Avenue,
Office 307, Chicago, IL, 60637, United States,
utran@chicagobooth.edu
CB – Perceptions & Gift Giving In this paper, we evaluate the effect of price information on consumer search and
Contributed Session purchasing behavior. We collect detailed individual-level purchasing and search
data on 2,449 consumers in the UNC-Chapel Hill textbook market. A random
Chair: Stav Rosenzweig, Ben-Gurion University of the Negev, subset of these consumers are provided with information about the price of their
Department of Management, Guilford Glazer School of Business & assigned textbooks from various retailers before the semester begins. We use these
Manageme, Beer Sheva, 84105, Israel, stavro@som.bgu.ac.il data to compare the search and purchasing outcomes of consumers who receive
1 - Sari – A Garment that Adorns Indian Woman: With Special Focus information from their instructors (treatment group) with outcomes of consumers
on its Role as an Artifact in the Rites of Passage of an Indian who do not receive this information (control group). We find that (i) information
leads to more online search activity and online purchases, (ii) the informational
Bride in the Context of Her Wedding
treatment reduces the gap in online search behavior between consumers across
Sunitha Ratnakaram, O.P. Jindal Global University, 302, Tower C2, experience levels, and (iii) the treatment increases take-up of the textbook at the
Tulip Grand Apartments, near O.P. Jindal University, Sonipat, extensive margin. Additionally, we solicit beliefs about the price distribution of
131001, India, sratnakaram@jgu.edu.in general textbooks from the same participants and find that although the
Sari is the most magnificent fabric that adorns Indian women since ages. treatment helps inexperience consumers update on the mean of the textbooks,
Understanding the role of sari as an artifact that helps in the rites of passage for they do not update their beliefs about the distribution of prices.
the bride during her wedding is the focal point of the study. For conducting this 4 - Consumer Response to Taxation of Energy-consuming Products:
study, I chose qualitative method of research. Wedding dress is an Evidence from a Natural Experiment
accompaniment that travels along with the bride into her next phase of life
Stav Rosenzweig, Ben-Gurion University of the Negev,
(Frisie, 2001) it will become a trusted companion during the transformation from
a single woman to married woman. In all the rituals that will be narrated a thread Department of Management, Guilford Glazer School of Business &
can be easily found captures the beautiful transformation of a girl to a bride to a Manageme, Beer Sheva, 84105, Israel, stavro@som.bgu.ac.il,
woman. This transformation can be explained using the well framed rites of Aviv Steren, Ofir Rubin
passage as a part of socialization by Arnold van Gennep in his work The rites of Policy makers use a variety of tools to help consumers make socially desirable
Passage (Gennep, 1960). Rites of passage have three phases: separation, choices. In recent years, one such tool that became increasingly popular is the use
transition, and reincorporation, as van Gennep described. “I propose to call the of tax incentives to encourage consumers to purchase energy-efficient products.
rites of separation from a previous world, preliminal rites, those executed during Indeed, the International Energy Agency consistently advocates that encouraging
the transitional stage liminal (or threshold) rites, and the ceremonies of consumers to adopt energy-saving technologies should be a dominant policy.
incorporation into the new world postliminal rites.” “The first phase (of Economics literature, however, points to a major caveat in such policies. It
separation) comprises symbolic behavior signifying the detachment of the suggests that as energy-consuming products become more energy-efficient, their
individual or group ... from an earlier fixed point in the social structure (Gennep, usage costs decrease, and the result is increased usage that offsets energy savings.
1960). There is often a detachment or “cutting away” from the former self in this This phenomenon is known in the literature as the rebound effect. Taking a
phase, which is signified in symbolic actions and rituals. The transition (liminal) consumer behavior perspective, we test this notion in a natural experiment
phase is the period between states, during which one has left one place or state setting. We use a national tax policy on cars, implemented in Israel in 2009. The
but has not yet entered or joined the next. “The attributes of liminality or of policy applied a differential tax on private cars depending on their energy
liminal personae (“threshold people”) are necessarily ambiguous (Gennep, 1960). efficiency, thereby incentivizing the purchase of energy-efficient cars. Using a
This is the very stage where the transition of girl comes in the form of the bride. difference-in-differences method, we show that consumers used their new cars
In the third phase (reaggregation or reincorporation) the passage is consummated significantly more following (versus before) the implementation of the policy.
[by] the ritual subject. Having completed the rite and assumed their new identity, This increased usage was evident above and beyond the effect of usage costs, and
one re-enters society with one’s new status. regardless of whether their cars were efficient or not. We observed no increased
usage of used cars, for which the tax policy did not apply. These results suggest
that the reason for the increased usage of energy-efficient products is not
necessarily an economic incentive (the decrease in usage costs) but rather a
behavioral shift. We examine potential mechanisms for this change in behavior.
67
n FC16 4 - How Structural Embeddedness Drives Social Network Behavior

and Happiness
Room 231, Alter Hall Jayson S. Jia, Assistant Professor, University of Hong Kong,
Pok Fu Lam Road, Hong Kong, Hong Kong, jjia@hku.hk,
Users and Retention Jianmin Jia, Xin Lu, Yiwei Li, Nicholas Christakis
Contributed Session Truly understanding how social networks shapes behavior, communications, and
Chair: Jayson S. Jia, University of Hong Kong, Hong Kong, relationships in societies and markets requires more than understanding the
jjia@hku.hk, Jianmin Jia, Xin Lu, Yiwei Li, Nicholas Christakis structure of an individual’s social network, but also how that individual’s social
network is embedded with the social networks of those around them. We
1 - The Impact of User Location and Usage Experience on Shopping combine the natural experimental context of a major earthquake with mobile
App Selection and Usage Behavior telecommunications meta-data of 28,038 customers who are in 3-person family
plans of a major Chinese telecommunications carrier to show that pre-earthquake
Sue Ryung Chang, Assistant Professor, University of Georgia,
structural embeddedness can drive post-disaster communications, social network
C326 Benson Hall, Athens, GA, 30602, United States, activation, and behaviors. As a theoretical contribution, we develop a new
suechang@uga.edu, Mingyung Kim, Jeonghye Choi, structure-based conceptualization of embeddedness using triadic motifs, which
Minakshi Trivedi differs from previous frequency-based operationalizations of structural
With recent advances in location tracking (a.k.a., geolocation) and mobile embeddedness (e.g., the number of common friends). We find that stronger
Internet technologies, many retailers have begun to incorporate customers’ structural embeddedness in families drives more family-oriented communications,
location and mobile usage behavior to offer more relevant information at the and also results in greater happiness. Besides capturing the relative importance of
optimal time and place through mobile shopping applications. In this study, we friends versus family, these behaviors also show the extent to which families are
consider two broad categories of shopping apps—location-based (local deal apps inward versus outwardly focused, which affects the structure of the macro-
and traditional retailer apps) and location-independent apps (online retailer network; greater embeddedness results in stronger intra-family network
apps). We investigate the impact of user location (locational factor) and shopping activation, but this de-emphasizes activation of non-family ties which are critical
app usage experience (behavioral factor) on customers’ shopping app category for information diffusion. Our overall contributions include providing causal
selection and usage behavior. Specifically, we examine two layers of user location evidence for the impact of embeddedness on social network behavior, developing
(i.e., real-time location and location familiarity) and usage experience (i.e., real- new conceptualizations of embeddedness, which remains understudied
time search and shopping app category familiarity) to distinguish the effects of empirically despite being a fundamental concept in social networks research, as
contemporaneous and prior factors. Using a two-stage selection model, we study well as showing how social network activation patterns can have important
the drivers of selection and usage of location-based versus location-independent down-stream consequences such as psychological happiness within families and
app categories. Finally, we offer distinct strategic guidelines for the different types information diffusion for society at large.
of mobile retailers to leverage both locational and behavioral factors.
2 - An Exploratory Analysis of User Retention and Engagement in
Mobile App Market n FC17
Ashish Kumar, Aalto University, School of Business, P.O. Box Room 31, Alter Hall
21230, Helsinki, 00076, Finland, ashish.kumar@aalto.fi,
Preeti Krishnan Lyndem, Dhrithi Mahadevan Meet the Editors Session I
Despite the initial development and growth of mobile app market driven by the Panel Session
developed countries, today the mobile app usage is driven by developing markets. Chair: Xueming Luo, Temple University, 1801 Liacouras Walk,
However, due to intense competition, app developers in the this market face the
tremendous pressure of retaining and engaging app users. In this study, we
Philadelphia, PA, 19122, United States, luoxm@temple.edu
address the issues of mobile app user retention and engagement in the developing 1 - Marketing Science
market. In this regard, first, we propose a conceptual framework of app user K. Sudhir, Yale University, New Haven, CT, United States,
retention and engagement drawn from multiple theories consisting of k.sudhir@yale.edu
consumption value, technology acceptance model, and balanced centricity.
Second, we collect data from multiple sources consisting of revealed data that
2 - Journal of Marketing
captures app users’ actual activities, perceptual data that capture app users’ V. Kumar, Georgia State University, Atlanta, GA, United States,
psychological intention to engage with the app, and interview data that captures vk@gsu.edu
the perspectives of app developers in managing app. Third, we use a multi- 3 - Journal of Marketing Research
method approach to analyze our data. Results from analyses suggest that mobile Rajdeep Grewal, University of North Carolina, Kenan-Flagler
user retention is affected by not only the core functionality of the app but also the Business School, 300 Kenan Center Drive, Chapel Hill, NC, 27599,
add-on functionalities that the app provides. In fact, these add-on functionalities
increase the user retention. Furthermore, our results suggest the importance of a
United States, grewalr@unc.edu
psychological mechanism behind app user engagement where we find usefulness
and ease of use of the app drive positive affect towards the app which in turn
drive user engagement and loyalty towards the app. Finally, an exploration of app
developer’s perspective into the app business model reveals that customer-
centricity is not an optimal strategy for mobile app growth. Given app developer’s
vision to provide app as a platform above and beyond just as a service, balanced
centricity and stakeholder marketing are suitable strategies.
3 - A Large Scale Descriptive Study of Shopping Search Patterns
Jiang Qian, PhD Student, University of Houston, 4750 Calhoun
Rd, Houston, TX, 77004, United States, jqian@bauer.uh.edu,
Rex Yuxing Du, Ye Hu
We analyze daily search volume data from Google Shopping Insights from
January 1, 2014 through December 31, 2016, which includes 2,000 of the most
popular products from a wide range of categories (e.g., apparel, handbags, and
electronics). The data is further broken down into 210 DMAs and two platforms,
mobile vs. desktop. Our descriptive analysis of this massive dataset reveals many
empirical regularities about consumer shopping search behavior. We have found,
for example, the volume of shopping-related searches tends to peak on Monday
and decline monotonically through the rest of the week. The share of mobile
searches increases on weekends and traditional shopping holidays (e.g., Black
Friday and New Year) but decreases on online shopping “holidays” (e.g., Amazon
Prime Day and Cyber Monday). Younger and older people search less but are
more likely to use mobile devices. DMAs with higher population density search
more on a per capita basis. Mobile search share is higher in DMAs with lower
medium household income or a higher percentage of African American or
Hispanic population.
68
INFORMS MARKETING SCIENCE – 2018 FD02
Friday, 3:30PM - 5:00PM

4 - A Structural Model for Evaluating E-cigarettes Consumption
Vithala Rao, Cornell University, Ithaca, NY, 14850, United States,
vrr2@cornell.edu, Jialie Chen
Compared to cigarettes, current regulations on e-cigarettes are minimal. The
n FD01 advocates of e-cigarettes claim that they help in ceasing smoking habits. On the
other hand, a recent survey shows that a majority of smokers adopt e-cigarettes
Room 32, Alter Hall mainly to bypass the smoking regulations. Thus, it is imperative for policy makers
to understand consumers’ motivations to adopt e-cigarettes and explore the
Marketing Science in Health Care impact of e-cigarettes on their smoking behaviors. To address these issues, we
General Session construct a dynamic structural model that incorporates both consumers’ rational
addiction and regular and electronic cigarettes purchase behaviors. We use our
Chair: Steven Mark Shugan, University of Florida, Gainesville, FL, estimated structural model a set of counter-factual experiments to explore the
32605, United States, steven.shugan@warrington.ufl.edu implications of potential policies for e-cigarettes. We find that consumption of e-
cigarettes counter-acts, rather than promote, smoking cessation. Motivated by this
Co-Chair: Jihwan Moon, UNSW, Level 3 Quadrangle School of finding, we conduct counterfactual analyses to evaluate two policy regulations on
Marketing UNSW, Sydney, Australia, jihwan.moon@unsw.edu.au e-cigarettes: (1) e-cigarettes taxes and (2) price regulation. We find that both
1 - Morphing Randomized Controlled Trials policies are effective in reducing overall consumption of cigarettes and e-
Gui Liberali, Erasmus University, Chris Bennekerslaan 27H, cigarettes.
Rotterdam, 3061EB, Netherlands, liberali@rsm.nl, John Hauser
Efficient experimental designs of trials of pharmaceutical drugs reduce the
pressure on health research funding and minimize patient harm because they n FD02
require smaller samples than randomized controlled trials (RCT). Fewer patients
are exposed to untested (and potentially harmful) drugs. Multi-armed bandit Room 33, Alter Hall
solutions (MABs), which learn more rapidly, minimize patient mortality and
accelerate the identification of the optimal policy. However, MABs present two
Digital Economy VIII: Network Dynamics and the
challenges: (1) MABs often require each individual outcome to be observed Value of Information
before the next patient is assigned, but major patient outcomes are often observed General Session
several months later after the treatment; (2) because MABs allocate less sample to
suboptimal assignments, the overall statistical power is lower between inferior Chair: Mina Ameri, University of Texas at Dallas, Richardson, TX,
treatments. We address the first challenge with fractional observations. Drawing United States, mina.ameri@utdallas.com
on morphing research in marketing science, we propose fractional observations as 1 - A Structural Model of Network Dynamics: Tie Formation, Product
an interim outcome. Such outcome is observed well before the trial ends. We
address the second challenge by acknowledging that statistical power in a RCT is
Adoption, and Content Generation
not ethically neutral. In a MAB, statistical power focuses on the best treatment Mina Ameri, University of Texas at Dallas, 800 campbell Rd,
relative to suboptimal treatments. Furthermore, ethical considerations should Richardson, TX, 75080, United States, mina.ameri@utdallas.edu,
include post-experimental as well as within-experimental considerations. We Elisabeth Honka, Ying Xie
evaluate our proposed method by analyzing large-scale randomized controlled We develop a structural model for the co-evolution of individuals’ friendship tie
trials of a new treatment for myocardial infarction. The trial included 41,021 formations and their concurrent online activities (product adoptions and
patients in 15 countries and 1,081 hospitals. Our method significantly production of user-generated content) within a social network. Explicitly
outperforms traditional RCTs by reducing mortality at the required level of modeling the endogenous formation of the network and accounting for the
statistical power on the optimal treatment. We close with a discussion of interdependence between decisions in these two areas (friendship formations and
implications for marketing science problems that now rely on RCTs. concurrent online activities) provides a clean identification of peer effects and of
2 - Hype News May Drive Real News: The Oz Effect in Healthcare important drivers of individuals’ friendship decisions. We estimate our model
Zijun Shi, Carnegie Mellon University, 5562 Hobart Street, using a novel data set capturing the continuous development of a network and
users’ entire action histories within the network. Our results reveal that,
Apartment 405, Pittsburgh, PA, 15217, United States,
compared to a potential friend’s product adoptions and content generation
zijuns@andrew.cmu.edu, Kannan Srinivasan, Xiao Liu activities, the total number of friends and the number of common friends this
This paper aims to understand how public information affects consumers’ potential friend has with the focal individual are the most important drivers of
healthcare choices, by delving into the multi-dimensional language features of friendship formation. Further, while having more friends does not make a person
different information sources. We combine several datasets, including multi- more active, having more active friends does increase a user’s activity levels in
media data from The Dr. Oz Show, consumer reviews, research articles, survey terms of both product adoptions and content generation through peer effects. Via
data, news articles, etc. Our textual analysis leverages both traditional natural counterfactuals we assess the effectiveness of various seeding and stimulation
language processing techniques and state-of-the-art deep learning models. strategies in increasing website traffic while taking the endogenous network
Surprisingly, we find that the “Oz effect”-the phenomenon that The Dr. Oz formation into account. We find that seeding to users with the most friends is not
Show is highly effective in increasing sales of the recommended healthcare always the best strategy to increase users’ activity levels on the website.
products-is not present. In contrast, more credible information-news articles and
scientific research articles-plays an important role in steering consumers’ choices.
2 - How Much is an Image Worth? Airbnb Property Demand
Lowering the complexity, ambiguity and emotion of the research articles is Estimation Leveraging Large Scale Image Analytics
especially effective in increasing the sales of the focal product. Moreover, Shunyuan Zhang, Carnegie Mellon University, 5562 Hobart Street,
subjectivity, ambiguity, sentiment, or mentioning the product’s name in a news Apartment 614, Pittsburgh, PA, 15217, United States,
article all has a significant positive effect on sales. Furthermore, we propose an shunyuaz@andrew.cmu.edu, Dokyun Lee, Param Vir Singh,
alternative explanation of the “Oz effect”. Instead of affecting sales directly, the Kannan Srinivasan
“hype news” in the show indirectly affects consumers’ purchasing decisions
through “real” news articles. Our findings have managerial implications on We investigate the economic impact of images and lower-level image factors that
advertising content design strategies and policy implications on media content influence property demand in Airbnb. Using Difference-in-Difference analyses on
regulation. a sixteen-month panel dataset spanning 7,711 Airbnb properties, we find that
units with verified photos (taken by Airbnb photographers) generate
3 - Healthcare Markets: For-profit vs. Nonprofit Hospital Competition approximately 6.9% more demand, or $4,281 per year on average. Leveraging
Jihwan Moon, UNSW, Level 3 Quadrangle School of Marketing computer vision and deep learning techniques to classify the image quality of
UNSW, Sydney, Australia, jihwan.moon@unsw.edu.au, more than 510,000 photos, we show that 48.9% of this effect comes from the
Steven Shugan high image quality of verified photos. We further examine the heterogeneity in
this effect and find that adopting verified photos benefits low-end properties
We find unusual competitive interactions between for-profit and nonprofit more, relative to high-end properties and benefits properties with few reviewers
hospitals contribute to nonprofit hospitals having higher profits and prices than more, relative to properties with many reviews. Next, we identify 12 image
for-profit. The nonprofits’ legal inability to distribute profits to stakeholders allows attributes from photography and marketing literature to characterize unit images
nonprofits to sacrifice profits for market share, thus creating formidable to evaluate the economic impact of these human-interpretable attributes. The
competitive advantages. Specifically, given the nonprofits’ willingness to forego results suggest that these attributes have a direct impact on demand even after
profits for output, nonprofits deter for-profit entry into premium specialty medical controlling for many observables and thus there is significant value in optimizing
services (PSMS) markets, or for-profits cede market share to nonprofits foreseeing images in e-commerce settings. From an academic standpoint, we provide one of
low post-entry competitive prices in costly PSMS markets. Consequently, the first large-scale empirical evidence that directly connects systematic lower-
nonprofits dominate PSMS (e.g. epilepsy, cardiology, orthopedics, and level and human-interpretable image attributes to demand. This contributes to,
neurosurgery services) markets, commanding both greater output and higher and bridges, the photography and marketing (e.g., staging) literature, which has
prices. Those gaps increase as competition intensifies because nonprofits seeking traditionally ignored the demand side (photography) or did not implement
output invest more aggressively. Predictably, the most profitable U.S. hospitals are systematic characterization of images (marketing). Lastly, these results provide
nonprofit. Last, focusing on PSMS, nonprofits employ national advertising while immediate insights for housing and lodging e-commerce managers (of Airbnb,
for-profits use local advertising for basic services. Our research involves both hotels, etc.) to optimize product images for increased demand.
game-theoretic analyses and empirical tests with several healthcare databases.
69
FD03 INFORMS MARKETING SCIENCE – 2018

3 - Privacy Preference and Consumer Information Disclosure: 2 - Multi-Period Salesforce Compensation: Disaggregate Versus
Evidence from Online Lending Aggregate Incentive Contracts
Chu (Ivy) Dang, The Chinese University of Hong Kong, Rm1151, Kinshuk Jerath, Columbia University, 3022 Broadway,
Cheng Yu Tung Building, Hong Kong, 999077, Hong Kong, 521 Uris Hall, New York, NY, 10027, United States,
dangchu@baf.cuhk.edu.hk, Tesary Lin, Mantian Hu, kj2323@gsb.columbia.edu, Fei Long
Pradeep Chintagunta We study multi-period salesforce incentive provision when agents can vary their
Companies increasingly collect customer data in order to optimize their marketing effort levels dynamically over two periods. Compensation can be granted to the
decisions. On the other hand, consumers sometimes refuse to provide their data agent either period-by-period for the outcome of each period (disaggregate
due to privacy concerns, even when firms offer compensation for this contract), or at the end of the second period for the outcomes for both periods
information. Canonical economic theory predicts that consumers who withhold (aggregate contract). The principal balances incentive provision and the agent’s
information are more likely to be those who experience harm from disclosing dynamic gaming; this determines when it is optimal to use an aggregate contract,
their type during market interaction; for example, in credit markets people who which may be either a “gradual” contract with rewards at all output levels or an
are more likely to default will have a stronger incentive to avoid disclosing any “extreme” contract that concentrates the reward at the highest possible output
information. However, this is no longer true when people have intrinsic privacy level
preferences. Knowing customers’ privacy preferences is key both for designing
3 - Managing Conflicts between Sales and Marketing:
optimal incentives for data collection and for inferring consumers’ latent
characteristics. However, research on measuring privacy preferences using field Customer Acquisition in Business Markets
data is scant; while at the same time, stated privacy preferences are known to be Olivier J. Rubel, UC Davis Graduate School of Management,
much higher than consumers’ revealed preferences. To measure consumers’ Davis, CA, 95616, United States, orubel@ucdavis.edu, Chen Zhou,
revealed privacy preference while at the same time estimating its relationship Rajdeep Grewal, Jagmohan S. Raju
with consumer risk type, we use data from an online lending company, where
Industry practitioners have suggested that performance-based incentives could
applicants can choose to share personal information in exchange for a lower
address conflicts at the marketing and sales interface, without, however,
interest rate. Consumers’ risk types are backed out from their repayment
providing any specific direction on how to do so. Specifically, should incentives
decisions conditional on loan characteristics, while privacy preferences are
for marketers depend on sales, leads or both? Similarly, should leads inform
measured by their data sharing decisions. To separate the direct benefits of getting
salesperson incentive plans, and if so, how? We address these managerial
a lower interest rate from privacy preferences, we formulate a structural model to
questions and show how performance-based incentives can resolve conflicts
characterize consumers’ loan application-repayment process. Counterfactual
related to customer acquisition by business-to-business firms. Specifically, to
analysis is conducted to find the optimal incentive for personal data provision.
coordinate efforts between the sales and marketing functions, managers should
4 - Cheap Talks on the Crowdsourcing Platform incentivize marketers only based on the number of leads they generate, through a
Yuting Zhu, MIT, 100 Main St, E62-535, Cambridge, MA, 02142, straight commission. In contrast, we find that a quota-based commission plan on
United States, yzhu44@mit.edu, T. Tony Ke sales approximates salespersons’ incentive schemes, where the quota depends on
the number of leads generated by marketers. Finally, we find that the proposed
We consider a crowdsourcing platform that matches consumers with private incentive schemes fully mitigate inefficiencies at the marketing-sales interface
quality preferences with service providers that differ in quality. Consumers can such that equilibrium profits under the decentralized and centralized structures
report their quality preferences via cheap talks when posting their jobs, which coincide.
influence service providers’ application and pricing strategies. By exaggerating
one’s quality preference, a consumer attracts not only more applications from
service providers, but also those with higher quality, at the cost of a higher
expected price. We find that the exaggeration occurs in equilibrium only when it n FD04
is possible for consumers to re-negotiate with service providers on their asking
prices. In general, re-negotiation improves ex post matching efficiency but may Room 35, Alter Hall
distort consumers’ ex ante incentive to truthfully reveal their quality preferences. Business Strategies for Digital Goods
General Session
n FD03 Chair: Daniela Schmitt, University of Mannheim, Mannheim, 68161,
Germany, daniela.schmitt@bwl.uni-mannheim.de
Room 34, Alter Hall 1 - The Impact of Music Streaming on the Similarity of Listening
Frontiers in Sales Force Incentives Design Behavior across Consumers
Bart J. Bronnenberg, Stanford University, Stanford, CA, United
General Session
States, bbronnen@stanford.edu, George Knox, Hannes Datta
Chair: Olivier J. Rubel, UC Davis Graduate School of Management, Streaming platforms offer consumers massive variety, e.g., Spotify’s library
Davis, CA, 95616, United States, orubel@ucdavis.edu contains over 30 million songs. Users are unlikely to know about all available
Co-Chair: Rajdeep Grewal, University of North Carolina, Chapel Hill, titles and need to search for music that matches their tastes. A natural question is
NC, 27599, United States, grewalr@unc.edu to what extent the platform lowers these consumer search frictions in a way that
caters to individual, idiosyncratic tastes. Conversely, the streaming platform may
1 - Motivating Salespeople to Work Smart and Work Hard: have incentives to promote the same music to everyone, effectively concentrating
A Behavioral Economics + Agency-Theoretic Approach listening on a handful of artists; for example, the most popular playlist on Spotify,
Yeji Lim, University of Missouri, Cornell Hall 435, Columbia, MO, “Today’s Top Hits”, has 18 million followers. Given the rapid growth of these
65211, United States, yeji.lim@mail.missouri.edu, platforms, and concerns about their increasing economic power over producers
Murali K. Mantrala and consumers, the extent to which platforms encourage uniqueness or promote
homogeneity in consumption is an important question. This paper addresses this
In an era when Buyers, whether in B2B or B2C markets, can easily obtain question by investigating changes in listening similarity for pairs of consumers,
information from online sources about alternatives to meet their needs, and are around the time of their adoption of streaming technology. We find strong
becoming much more sophisticated in their demands of sellers, it has become evidence that Spotify broadly decreases similarity in listening histories across
imperative for sales forces to enhance their selling effectiveness (i.e., work consumers. This result remains robust to alternative dimensions over which
“smarter”). In this research, we focus on investigating incentive mechanisms to similarity is measured (e.g., artists, genre, etc.), and persists for at least 5 months
induce salespeople to increase their effectiveness. In contrast, extant agency- after adoption.
theoretic models for sales force compensation planning focus on stimulating more
selling efforts towards desired sales objectives and do not address the
enhancement of selling effectiveness. Indeed, the standard models invariably
assume that selling effectiveness or ability is a given and constant. Recent
behavioral economics theories, however, suggest that selling effectiveness as well
as cost of thinking could certainly vary with choice of thinking style, e.g.,
deliberative or intuitive thinking. Moreover, the sales response should be viewed
as a function of both thinking efforts and selling effort. In the present research,
we allow for such extensions of the standard agency-theoretic model to
investigate salespeople’s trade-offs between thinking and selling efforts, and
corresponding profit-improving sales compensation plans. We generate and
discuss a number of new insights into mechanisms for enhancing selling
effectiveness versus stimulating selling effort and conclude with several
recommendations for sales management and directions for future research.
70

2 - A La Carte or All You Can Eat: Investigating Pricing Strategies for
Digital Content n FD05
Michaela Draganska, Lebow College of Business, 3141 Chestnut Room 232, Alter Hall
Street, Philadelphia, PA, 19104-6340, United States,
draganska@drexel.edu Mobile, Algorithm, and Artificial Intelligence (AI)
The marginal cost of delivering digital content is zero. In this context, should a
Session IX: Digital Touchpoints and Advertising
profitmaximizing firm charge a single access fee for all content, price content General Session
individually, or offer bundles? The upside of offering individual products or
bundles is that consumers with a clear preference would not feel like they are Chair: Xueming Luo, Temple University, Philadelphia, PA, 19122,
paying for something they do not need and may thus be more likely to purchase. United States, luoxm@temple.edu
There is also a potential to sell multiple products to the same customer, thus Co-Chair: Sha Zhang, University of Chinese Academy of Sciences,
increasing revenues to the firm. Yet, it seems that the decision difficulty associated
China, zhangsha@ucas.ac.cn
with choosing among different options may prevent some of the potential gains
from materializing, thus making a single all-access fee more appealing. We 1 - Mobile Integrated Kiosks: How Inspirational Communication
investigate this question using data from a field experiment at an adult online Content Increases Unplanned Spending
content provider. Visitors to the website were randomly assigned to either single Venkatesh Shankar, Texas A&M University, Mays Business School,
product subscriptions, bundles of thematically linked products, or unlimited 4112 TAMU, College Station, TX, 77843, United States,
access. The subscription prices were also varied experimentally. Using this source venky@venkyshankar.com, Unnati Narang
of variation, we investigate both short-run and long-run consequences of the
different pricing strategies for digital content. Surprisingly, customers do not seem Mobile integrated kiosks allow information to flow seamlessly across in-store
to be price sensitive as subscription numbers are as high (or sometimes higher) at technology, the retailer’s website, and the retailer’s mobile app. A better
higher price points. We also find support for our conjecture that allaccess fees understanding of the effects of such informational flow on shopper behavior can
may be preferable to individual subscriptions. enable retailers to leverage these kiosks and mobile phones in their
communications to augment unplanned shopper spending and sales. Of
3 - Have You Seen this Ad? The Impact of Display Ad Viewability on theoretical and managerial importance are the relative effects of inspirational (i.e.,
Advertising Effectiveness content meant to spark ideas or show creative uses of products such as food
Christina Uhl, Vienna University of Economics and Business, recipes) versus promotional (e.g., deals) communication content on shopper
Welthandelsplatz 1, Vienna, 1020, Australia, behavior. This paper develops a series of hypotheses relating to the effects of
Christina.Uhl@wu.ac.at, Klaus Miller, Nadia Abou Nabouta communication content delivered through mobile integrated kiosks on unplanned
spending and product purchases and tests them through field experiments, eye
Viewability, i.e., pixel percentage in view and exposure time of an online display tracking data, and lab studies, using moderated mediation analysis. The results
ad, is a recently available feature in advertisers’ campaign dashboards. This study show that inspirational content increases unplanned spending and sales more
evaluates the impact of ad viewability on advertising effectiveness and, therefore, than promotional content. Building on categorization theory, the authors show
provides guidance for practitioners to target the right viewability values for their that these effects are mediated by activation of higher order categories and
campaign goals. To study the question how ad viewability affects advertising purchases of substitute products related to the inspirational communication
effectiveness, we conduct three large-scale empirical studies, (1) an online content. Interestingly, these effects are pronounced for shoppers who spend less
experiment, conducted in November 2017 (2) a field experiment to be carried out on groceries and for those who process information concretely. The results suggest
in February 2018 and (3) an observational study using an industry data set that retailers can increase sales by creating and suggesting inspirational ideas to
collected between January and April 2016. All three studies use display ads of shoppers through mobile integrated kiosks and by targeting low-budget frequent
telecommunication providers to examine the impact of viewability on advertising and concrete processing shoppers.
effectiveness. While Study 1 and 2 make use of a self-designed unknown brand,
Study 3 uses data from a display ad campaign of a major European 2 - How Mobile Touchpoints Shape Online Customer Journeys:
telecommunications company. Furthermore, Study 1 and 2 measure cognitive The Impact of Mobile Engagement on Journey Length,
user reactions, such as ad and brand recognition, as well as behavioral intention Composition and Revenues
(i.e., click and buy intention), and Study 3 measures the effect of viewability on Umut Konus, University of Amsterdam, Amsterdam Business
the behavioral outcome variable website visits. We find ambiguous results at a School, Plantage Muidergracht 12, Amsterdam, 1018TV,
preliminary stage of this research. The results for ad recognition of Study 1
Netherlands, u.konus@uva.nl, Jonne Guyt, Marc Salomon
strongly support a long exposure time. However, an exposure time of 10 seconds
outperforms longer exposure times in the case of brand recognition. Study 3 In recent years, multi-touchpoint customer journeys and attribution modeling
suggests an inverted U-shaped effect of both more pixel in view and longer have drawn more attention from researchers and practitioners due to their
exposure times on website visits. As these findings are mixed, we hope to resolve relevance for multichannel resource allocation decisions in practice. As of now,
these conflicting results and explore boundary conditions with regard to the effect the proliferation of mobile devices and touchpoints is another factor in
of viewability on advertising effectiveness in Study 2. researchers’ agenda. Recent research reveals that customer’s usage and relational
patterns with mobile devices substantially differ from those on non-mobile online
4 - Optimizing the Composition of Paid Content in a Freemium Model platforms and channels. Thus there is already ample evidence from the research
Daniela Schmitt, University of Mannheim, Mannheim, 68161, in practice that the adoption and use of mobile touchpoints (apps as well as
Germany, daniela.schmitt@bwl.uni-mannheim.de, Florian Stahl, mobile ads and notifications) should also influence and shape customer journeys
Raghuram Iyengar and journey outcomes, such as: conversion and revenues on online platforms.
Despite its substantial relevance, in marketing literature, there is still no thorough
Many companies try to sell subscriptions for their digital products using a
empirical research focusing on this issue. In our research we focus on the impact
freemium revenue model. Such a business model typically implies offering a low-
of the inclusion/introduction of mobile apps and touchpoints in online customer
end version of the product for free and a high-end version for a fee. For instance,
journeys on conversion, revenues, journey length and touchpoint composition.
a news publisher may offer some content for free to all customers while placing
We use long-term clickstream and transactional data encompassing multiple
other content behind a paywall. Little is known about how the characteristics of
online touchpoints from a large scale insurance company . Our data captures
the content determine whether it would be free or paid. Using individual-level
multi-touchpoint data from online customer journeys capturing the periods
consumption data from an online news publisher that employs a freemium
before-after the firm introduces its mobile apps, mobile advertising and
model, we quantify the impact of the quality and quantity of paid content on the
notifications in its touchpoint portfolio. We use dynamic response models to
demand for subscriptions. Using the findings from our empirical analysis, we
investigate the impact of mobile touchpoint use on conversion and revenues, and
develop a framework for setting a freemium strategy (i.e., the ratio of free versus
difference-in-differences analysis and latent transition models to examine how
paid content) optimal for revenue maximization.
online customer journeys evolve in terms of length and composition with the use
of mobile apps and other mobile touchpoints.
71

3 - Mobile Entertainment: The Impact of Augmented Reality Games To incorporate our model into a more comprehensive e-panel management
on Prevalent Hedonic Products system, we determine an optimal strategy in terms of both quantity and timing of
Martin Spann, Ludwig-Maximilians-University, Institute for the solicitations tailored to each individual e-panelist, via machine learning
techniques. The proposed management system would help online panel
Electronic Commerce, Geschwister-Scholl-Platz 1, 80539,
companies maximize e-panelists expected lifetime value.
Germany, spann@spann.de, Cristina Mihale-Wilson, Patrick Felka,
Oliver Hinz 2 - There Are Many Ways to Answer Survey Items:
New technological advancements such as Augmented Reality (AR) and Virtual
A Model-based Exploration using Eye-tracking Data
Reality (VR) have introduced a new category of hedonic products to the Ulf Böckenholt, Northwestern University (Kellogg), Evanston, IL,
entertainment industry. Examples are new AR-based games such as Pokémon Go United States, u-bockenholt@kellogg.northwestern.edu,
or the upcoming release of Harry Potter: Wizards Unite. The main objective of this Joachim Büschken, Thomas Otter
study is to determine the impact of this new category of AR-based games on Response behavior in surveys determines the value of the survey data as input to
traditional hedonic products such as television or cinema. Therefore, we measure decision making. Ideally, survey respondents read and understand survey
the impact of AR-based games on other categories of hedonic products instructions, questions, and response scales, and provide answers that carefully
(instantiated by products like e.g., television, cinema and online games) by reflect beliefs, attitudes, or knowledge that exist independent of the survey, in
studying rich, unique data sets which allow us to monitor the activity level of the principle. However, respondents may also arrive at their responses using cues or
different hedonic products before and after the mass-adoption of AR-based rules that facilitate the production of a response, but void it of the targeted
games. Our results reveal that AR-based games have a high disruptive potential information content. We use eye-tracking data as covariates in a Bayesian
for the entertainment industry, and can both, substitute or complement the switching-mixture model to identify different response behaviors at the item-
consumption of other hedonic products. To be more specific, our results show that respondent level. The model distinguishes response behaviors that anchor on the
due to the AR-based games’ requirement for the consumer to go outside their previous response, and responses that more directly reflect respondents’
home and be active, AR-based games substitute other hedonic products, except preexisting knowledge and experience of interest, while taking persistent
for those which (1) require the consumer to travel to a venue away from home, heterogeneity in knowledge and experience sets among respondents into account.
and at the same time (2) serve utterly different entertainment needs as the needs We find that controlling for anchoring behavior in a survey affects conclusions
satisfied by AR-based games. We conclude with implications for marketers of AR from the survey data substantially.
games as well as traditional hedonic products.
3 - Heterogeneous Regularization and Classification Models for
4 - When and How Can New Product Promotions be More Effective?
Panel Data
Sha Zhang, University of Chinese Academy of Sciences, Beijing,
Ty Henderson, Associate Professor, University of Texas at Austin,
China, zhangsha@ucas.ac.cn, Sha Zhang, Xueming Luo
3408 Mount Barker Dr, Austin, TX, 78731-6512, United States,
Companies dedicate substantial resources to promote new products to their ty.henderson@mccombs.utexas.edu, Qing Liu
customers, but new products are typically riskier than classic products. Despite a
large body of new product literature, the sales performance of promoting new Data for repeated observations on individual units are ubiquitous in marketing,
products remains poorly understood. Grounded in the product advertising and where uncovering unit-specific effects and heterogeneous responses are often
consumer adoption risk theories, we develop a framework addressing three basic focal research questions. In multi-attribute decision-making the idea that
questions relevant for managers’ new product promotion strategy: Compared individuals selectively attend to information in order to conserve cognitive
with classic product promotions, are new product promotions less or more resources gives rise to sparsity—attributes or attribute levels that have zero
effective in generating customer purchase response? Does gift complementarity influence on individual-level expected utility (i.e., =0). Although a diverse set of
influence the effects of new product promotions? And which customer segments models that accomplish regularization through variable selection and/or
are more responsive to new product promotions? Based on a large-scale shrinkage priors exist in the literature, the majority of these applications feature
randomized field experiment data with approximately 6 million transaction linear models with cross-sectional data for aggregate inference. Given the
records, we find causal evidence for the framework and hypotheses developed. widespread availability of panel data on marketplace behavior, the authors
Specifically, new product promotions result in fewer increases in purchase explore the challenges of generalizing models with regularization for unit-level
responses than classic product promotions. Fortunately, high (versus low) inference and discrete outcomes; where there are likely to be meaningful
complementary free gifts could mitigate such negative effects of new product differences in sparsity across observational units. In particular, many marketing
promotions. Also, new product promotions with high-complementary free gifts problems involve choices between nominal levels of an attribute (e.g., brand,
are more effective for dormant and loyal customers, but not for new buyers. flavor, channel), but most existing regularization models account for attribute
These findings are robust to a wide array of checks with different modeling selection rather than level selection, despite the fact that sparsity is quite likely
estimations, individual heterogeneity, and machine learning techniques with present over high dimensional nominal attribute levels such as these. The authors
shallow and deep learning algorithms. Additional follow-up studies support the propose a heterogeneous level selection model using hierarchical shrinkage priors
generalizability of the main results. For marketers, the findings demonstrate how and demonstrate the differences between the proposed approach and extant
to alleviate the downside of new product promotions by matching free gifts and classification and regularization models.
customer segmentations, with actionable insights for managers into the planning 4 - Economic Uncertainty and the Demand for Health Insurance
and management of new product promotions. Kathrin Gruber, Erasmus University Rotterdam, Rotterdam,
Netherlands, kathrin.gruber@wu.ac.at, Florian Huber,
Thomas Reutterer
n FD06 In times of low interest rates and ongoing policy changes commercial life and
health insurers need to understand trends specific to the industry as well as trends
Room 234, Alter Hall and changes specific to their clients in order to develop appropriate business
Bayesian Econometrics strategies. Some studies have already demonstrated the importance of economic
cycles to changes in household’s health investment decisions. However, there
Contributed Session exists considerable heterogeneity in health investment behaviour due to
Chair: Kathrin Gruber, Vienna University of Economics, differences in risk perception for different demographic groups, in particular, for
Welthandelsplatz 1, Vienna, 1020, Australia, kathrin.gruber@wu.ac.at different birth-groups. Within a dynamic cross-sectional panel model we analyze
secondary health insurance demand in the commercial U.S. market for different
1 - Modeling Unobserved Dropout Rate to Optimize Online Panelist birth-groups. The analysis is based on raw data obtained from the consumer
Lifetime Value expenditure survey program for the period Q1 1996 to Q4 2017. We cover
Arnaud De Bruyn, Professor of Marketing, ESSEC Business School, heterogeneity resulting from household-specific and economic environment-
Avenue Bernard Hirsch, Cergy, 95000, France, specific covariates by employing a flexible specification of a sparse finite mixture
debruyn@essec.edu, Alina Ferecatu, Prithwiraj Mukherjee model. Finally, scenario-analysis is performed along different indices measuring
economic uncertainty (e.g., newspaper coverage of policy-related economic
Online access panels are of paramount importance in marketing research, and uncertainty, consumer and business confidence and market volatility measures)
constitute a great asset for market research firms. In this paper, we show that to correctly address the short and long-term effects of economic factors on the
traditional models fail to quantify the true “cost” of an electronic solicitation, and commercial healthcare sector.
we demonstrate that each additional solicitation not only decreases the likelihood
of future participation, but might even increase the dropout rate (a mostly
unobserved phenomenon that has a dramatic impact on the lifetime value of an
e-panelist). Our model estimates the likelihood that an e-panelist will respond
positively to a new solicitation as a function of his past behavior and how many
times he has been solicited so far, and integrates a latent “wear out” effect. To
obtain individual-level wear out effects, we add a hierarchical Bayesian structure
to our e-panel lifetime model. We fit the model on a sample of more than
700,000 e-mail solicitations sent over a period of 3 years, and demonstrate that
each additional solicitation contributes to a long-lasting wear-out effect; the
unobserved drop-out rate reaches 7% on average at each additional solicitation.
72
n FD07 n FD08
Social Media - Influencers & Motivations Consumer Choice Models III
Chair: Nils Wloemert, Vienna University of Economics and Business, Chair: John H. Roberts, University of Sussex, Brighton, United
Institute for Interactive, Welthandelsplatz 1, Vienna, 1020, Australia, Kingdom, johnr@agsm.edu.au; Songting Dong, Huy Nguyen
nils.wloemert@wu.ac.at 1 - Modeling Reference Dependence Effect and
1 - A Model for Detecting Influencers in Social Media Regulatory Orientation
Mirai Igarashi, 2nd grade in MA, Tohoku University, I-Hsuan Chiu, Assistant Professor, University of Wisconsin -
27-1, Kawauchi, Aoba-Ku, Sendai-Shi, 980-8576, Japan, Milwaukee, Milwaukee, WI, United States, chiui@uwm.edu,
mirai.igarashi.s7@dc.tohoku.ac.jp, Nobuhiko Terui Gary J. Russell
In modern social media development, viral marketing, which aims at efficient
One major implication of the value function in prospect theory is loss aversion:
information diffusion through word-of-mouth by socially influential people, or
losses loom larger than gains of the same size. The empirical examinations of loss
influencers, is an important area of study. This article propose statistical models
aversion from consumer brand choice decisions, however, provide mixed results.
for detection of the communities formed on social media and extraction of topics
For example, Bell and Lattin (2002) show that loss aversion is reduced or
that people in the community are interested in. Because the proposed model
disappears when taking into account consumer heterogeneity. In this research,
detects influencers from social network and enables marketing in consideration of
we show that regulatory focus theory can account for the heterogeneity in the
topics that people are interested in, marketers can spread information on products
reference dependent effect: consumers in a promotion-oriented mindset show a
and brands more effectively. In empirical analysis using Twitter data, we find that
weaker response to loss aversion comparing to those in a prevention-oriented
one of the communities detected from network structure is a community that
mindset. We consider a decision context where consumers rely on external
collects links from most users despite the small number of users, that is, a
reference points. To capture the reference dependence effect, we use the random
community to which many influencers belong. In addition, we reveal topics that
regret minimization (RRM) model developed by Chorus (2012). The RRM model
users in those communities are interested in, such as latest game machine and
describes a decision process that compares attributes of an alternative to that of all
electronic devices.
other alternatives in the consideration set. RRM allows for flexibility in evaluating
2 - Motives for Gifting in Live Streaming reference dependence effects across all attributes and alternatives, and provides a
Xuejing Ma, Peking University, Beijing, China, framework for incorporating regulatory orientations into the model specification.
mxj0628@gmail.com, Hongju Liu, Qiaowei Shen Using data from a choice experiment, we demonstrate that prospect theory
describes the within-individual differences with respect to losses and gains, while
Recently, live streaming has enjoyed a surge in popularity around the world. regulatory focus theory describes the between-individual differences.
Besides free engagements in live streaming such as watching and chatting,
viewers can also purchase virtual gifts and send them to broadcasters. Using data 2 - Identifying Pivotal Attributes for Choice of Variety
from one of the largest live streaming platforms in China, we empirically explore Sanghak Lee, Assistant Professor of Marketing, Arizona State
the motives that drive viewers to gift. We find evidence of crowding out effect, University, P.O. Box 874106, Tempe, AZ, 85287, United States,
i.e., a larger cumulative amount of gifting tends to reduce the probability that a sasnghak.lee@asu.edu, Sunghoon Kim
new viewer will gift after joining the session. We propose two alternative
explanations for the crowding out effect. On the one hand, viewers may send gifts Consumers’ market basket often contains more than one variety of a product that
to broadcasters driven by an image-related motivation. The larger the cumulative pursue the same primary purpose while serving differentially with differences in
amount of gifting, the more a viewer has to spend to get attention from selected attributes. The pivotal attributes for variety are not observable and may
broadcasters and other viewers. On the other hand, viewers may care about the vary across consumers. For example, consumers who seek for variety in flavor
total amount of gifting a broadcaster would receive, in which case the gifting of would buy multiple flavors together (e.g., strawberry yogurt and blueberry
others and that of themselves are substitutes. Further analysis reveals two yogurt), while others who consider different consumption situations would
segments of viewers. Conditional on gifting, viewers in one of the segments are include various package types (e.g., a 6oz multi pack and a 32oz single pack) in
likely to gift more when the cumulative amount of gifting from others is larger; his/her shopping basket. We develop a Bayesian choice model that accommodates
while for viewers in the other segment, the amount of gifting is negatively related demand for variety and identifies the pivotal attributes for variety-seeking. The
to the cumulative amount of gifting from others. proposed model relies on the satiation at the pivotal attributes as a source of
variety-seeking and allows for consumer heterogeneity in selecting the pivotal
3 - Online Content Monetization: How Paywalls Affect Human attributes for variety. The empirical support for our model is provided using a
Brand Success consumer panel dataset of carbonated beverage products, demonstrating its
Nils Wloemert, Assistant Professor, Vienna University of implication for cross-price elasticity.
Economics and Business, Institute for Interactive Marketing & 3 - A Cross-validity Comparison of Likelihood Methods for
Social Media, Welthandelsplatz 1, Vienna, 1020, Austria, Distributions with Intractable Normalizing Constants
nils.wloemert@wu.ac.at, Christian Hotz-Behofsits, Tetyana Kosyakova, Frankfurt School of Finance & Management,
Nadia Abou Nabout Adickesallee 32-34, Frankfurt, 60322, Germany, t.kosyakova@fs.de
The increasing use of social media enables influential users to market themselves Statistical models with likelihood functions that are difficult to evaluate or are
as human brands (e.g., YouTubers) by creating content (e.g., videos) that is intractable have received much attention in the last decades. This problem is
consumed by their followers. Many social media platforms allow human brands known in a wide range of contexts, e.g., in spatial econometrics, statistical
to monetize their content through advertising, or subscription fees, or both. genetics, or network analysis. Researchers in marketing encounter this problem,
Choosing the right monetization strategy is not a trivial task for human brands. for example, when modeling choices from menus, where demand for items is
While providing content free of charge may increase brand value by attracting a interdependent because of substitution and complementarity relationships.
large audience, charging for content may increase the per-view income from Computing the normalizing constant of the corresponding likelihood requires the
customers who are willing to pay for the content. However, charging for content enumeration over all possible choice combinations. Thus, in large menus the
that was previously available free of charge might also lead to a consumer computation of the full likelihood becomes computationally prohibitive.
backlash and adversely affect brand value. To disentangle these potential effects, Historically, pseudo-likelihood approaches (e.g., Besag 1972, 1974) were used to
we exploit a quasi-experiment that recently occurred when the world’s largest sidestep this computational challenge. I show that the pseudo-likelihood is not
video streaming platform introduced a paywall (i.e., YouTube Red). Specifically, only inefficient but inconsistent when applied in a hierarchical setting, and how
we investigate how the paywall introduction affects (1) brand usage and algorithms that efficiently approximate ratios of normalizing constants result in
popularity (e.g., video views, channel subscribers), and (2) social media brand improved inference. Finally, I illustrate how the exchange algorithm (Moeller et
engagement (e.g., Twitter followers, Facebook likes, sentiment of user al., 2006; Murray et al., 2006) enables exact likelihood based inference when the
comments). To estimate these effects, we rely on a data set containing daily usage likelihood’s normalization constant is prohibitively expensive to compute.
and engagement metrics from various social media platforms for a period of more
than two years. The sample comprises three million videos, produced by 4200
human brands, and two billion textual user comments, analyzed using state-of-
the-art sentiment analysis techniques. The results suggest that the proportion of
negative comments increased directly after the paywall introduction, but this
effect wears out over time. Surprisingly, we find positive effects for brand usage
and popularity, suggesting a promotional effect of the paywall introduction.
73

4 - Buying a Larger Package with Quantity Surcharge: Information 2 - The Impact of Seat Type Pricing on Revenue in the Korean
Friction or Preference Heterogeneity? Cinema Industry
Joonhwi Joo, PhD Candidate, University of Chicago, 1401E 55th Gihwan Yi, Research Fellow, Korea Economic Research Institute,
St., Apartment 812N, Chicago, IL, 60615, United States, Seoul, Korea, Republic of, gihwany11@gmail.com,
joonhwi@uchicago.edu Hoe Sang Chung, Min Kim
Sales of larger packages with quantity surcharges occur often in the consumer This paper investigates returns to second-degree price discrimination in
packaged goods industry. This phenomenon poses a challenge to rationalizing competitive movie-theater markets. In March 2016, the leading movie multiplex
consumer behaviors because the same amount of an identical product can be chain in South Korea, CGV, adopted a price discrimination policy based on three
bought at a cheaper price. I present evidence that consumers lose a considerable different categories of theater seating. In contrast, two competing chains, Lotte
amount of money by purchasing quantity surcharged larger packages. I develop Cinema and Megabox, charge a single price for all seats. To estimate the impact of
and estimate a structural econometric model that combines (i) rationally second-degree price discrimination on revenue, we collected web reservation data
inattentive consumers with (ii) the address model of consumer demand in the for each theater of the three chains across the nation. The data enable us to
product characteristics space. By simulating consumer demand using model identify tickets sold with different price-quality tiers for each show. We find that
parameter estimates, I decompose the contribution of information friction and observed price discrimination improves revenue per show relative to uniform
preference heterogeneity over package sizes on sales of larger packages with pricing by 6.5% on average. Contrary to expectations, however, we find no
quantity surcharges. The estimated model predicts that only 40% of sales of larger statistical evidence that price discrimination decreased total tickets sold nor
packages with quantity surcharges can be attributed to information friction. I increased tickets sales of the cheapest seat category. The overall increase in
suggest revenue-improving, nonlinear pricing schemes that preserve consumer revenue could be attributed to small price differences (less than two US dollars)
welfare at the current level. Under the pricing schemes, retailers can raise their between seat categories. Our results are consistent with the notion that if the
revenues by up to 18%, and the corresponding sales of larger packages with price differences between seat categories are sufficiently small, consumers prefer
quantity surcharge triples. As a methodological contribution, I state and prove the paying the premium in order to avoid the inconvenient viewing experience in the
theorem that allows estimating the Rational Inattention (RI) model as if cheapest seats. Empirical results imply that price discrimination based on seating-
estimating an augmented logit model. quality which uses small pricing differentials can improve revenues in theater
venues.
5 - Investigating the Role of Cognitive and Emotional Incoherence in
Choice Processes
Huy Nguyen, University of Sussex, Brighton, United Kingdom,
johnr@agsm.edu.au, John H. Roberts, Songting Dong n FD10
Incoherence has been shown to affect evaluation and choice by increasing the Room 605, Alter Hall
uncertainty associated with potentially inconsistent pieces of information. In this
research, we probe the role of incoherence in a field setting and extend the Customer Relationship Management III
concept. Firstly, we distinguish between the incoherence elicited by two Contributed Session
associations which are expected to be positively correlated (e.g., performance and
reputation) and contrast it to incoherence when the associations are expected to Chair: Valeria Stourm, HEC Paris, 1 rue de la Liberation, Jouy-en-Josas,
be negatively correlated (e.g., performance and price). Secondly, we distinguish 78350, France, stourmv@hec.fr
between incoherence amongst cognitive attributes, incoherence amongst affective 1 - Modeling and Forecasting Repeat Purchase Behavior with
attributes, and incoherence between cognitive and affective attributes. For
Endogenously Determined Marketing Variables
negatively correlated attributes, incoherence may arise if both attributes are high
(attribute amplification) or if both attributes are low (attribute attenuation). For Yuhao Fan, University of Pennsylvania, 3730 Walnut St,
affective attributes, we show that for attribute amplification (“mixed feelings”) Philadelphia, PA, 19104, United States, yuhaofan@upenn.edu,
choice probability is reduced for both an hedonic and a utilitarian product, while Peter Fader, Daniel McCarthy
for attribute attenuation (“emotional indifference”), it is only reduced for the In this paper, we investigate endogeneity’s impact on out-of-sample forecasting.
hedonic category. We focus on modeling and forecasting repeat purchases in a non-contractual
setting, where the firm doesn’t observe customers’ decisions to churn and sends
direct marketing to customers to increase purchasing. We evaluate how well the
n FD09 model that does not fully capture the endogeneity performs compared to the
model that does, in term of parameter recovery and forecasting accuracy. To do
Room 239, Alter Hall so, we simulate data from the latent attrition models for repeat purchase
behavior, allowing the firm to target customers by sending direct marketing. We
Pricing Strategies III contribute to the literature that evaluates the relative merits of endogeneity-
Contributed Session correction models and models that ignore endogeneity. Moreover, we also
forecast with a model that corrects for endogeneity in the calibration periods but
Chair: Gihwan Yi, Korea Economic Research Institute of America, does not account for the correlation between the unobserved shock and the
800 K Street NW, Suite 300, Washington, DC, 20006, United States, endogenous variable in the forecasting periods, which mimics the idea of the
gihwany11@gmail.com instrumental variables. We find that all three models do well in population
forecasts. However, the model that ignores endogeneity has higher forecasting
1 - Peak-period Pricing Strategies in the Presence of Customer accuracy at the individual level than the IV-mimicking model.
Impatience and Store and Time Flexibility
Onesun Steve Yoo, University College London, UCL School of 2 - The Short Term and Long Term Impacts of Online
Management, 1 Canada Square, London, E14 5AB, Referral Program
United Kingdom, onesun.yoo@ucl.ac.uk, Chris Tang Xing Fang, Purdue University, 3308 Peppermill Dr, 2B, West
Lafayette, IN, 47906, United States, lelandfang@outlook.com,
Should a service firm charge higher prices during peak periods? We examine this
Tianfu Wang
question formally by analyzing a stylized duopoly model where firms compete for
homogeneously impatient consumers. We consider four settings, defined by Referral program has become a common CRM tool to acquire new customers and
whether consumers are (i) flexible in their choice of store (where) and/or (ii) retain existing customers for online retailers. Despite its prevalence, little research
flexible in their choice of shopping time (when). For each setting, we use the has focused on the effectiveness as well as the dynamics between referrers and
concept of a rational expectation equilibrium to characterize how consumers referees. What types of customers are more likely to initiate a referral? Will the
endogenously segment themselves regarding where and when to shop to avoid referred customers have impacts on the product portfolios of the referring
congestion. We then examine how the firms can profitably influence consumers’ customers, and vice versa? Using a unique dataset from an online retailer, we
self-segmentation process by employing the peak-period pricing strategy. Our investigate both the short-term and long-term effects of referral interactions. We
analysis shows that if consumers are not flexible in their store choice, then both try to quantify the impact of referrals in terms of spending, interpurchase time, as
firms should employ peak-period pricing. However, if consumers are flexible in well as portfolio expansion. The evidence will help evaluate the cost-effectiveness
their store choice, then it is possible for both firms, neither firm, or one firm to of customer referral interactions.
employ peak-period pricing, depending on the level of competitive advantage and
differentiation. If consumers are also flexible in time, then it is easier for the firm
with the competitive advantage to retain its customers and hence more likely that
this firm will employ peak-period pricing. When consumers have store or time
flexibility, we find that an increase in impatience will always benefit the firms. We
also find that greater impatience makes consumers more willing to avoid
congestion, making their self-segmentation less responsive to pricing.
Consequently, it is more likely that firms will employ peak-period pricing and set
a higher peak-period price. Finally, we incorporate heterogeneity in consumers’
store valuations and find that such exogenous segmentation makes it more likely
for firms to employ peak-period pricing, but not necessarily higher peak-period
prices.
74

3 - Drivers of Employee Retaliation Towards Customer a role in accelerating these two diffusion processes; heterogeneity exists across
Incivil Behavior emerging as well as across developed countries; a faster diffusion process results
Arpita Agnihotri, Assistant Professor, Penn State-Harrisburg, in better performance.
777, Harrisburg Tpike, Middletown, PA, 17057, United States, 2 - Microlending in Emerging Markets
axa671@psu.edu, Saurabh Bhattacharya Weining Bao, UTS Business School, 14-28 Ultimo Road,
Customer dysfunctional behavior such as incivility and aggression are receiving Ultimo, Sydney, 2007, Australia, weining.bao@uts.edu.au
major attention in the marketing literature, especially when the mistreatment of Small and micro-entrepreneurs in emerging markets often rely on microcredit to
frontline employees by customers have increased manifold in recent years. start and sustain their business. They usually form groups with their neighbors
Though the impact of such incivil or aggressive behavior on employees’ and local business partners, and agree to loan guarantees for the group members
behavioral outcomes such as increased stress levels, reduced job satisfaction, and borrowing from microlenders. This paper explores microlenders’ and small and
turnover intention has been researched, a critical behavioral outcome from the micro-entrepreneurs’ incentives to participate in a lender-borrower relationship
marketing perspective, i.e. frontline employees’ retaliation behavior towards in a market in which small and micro-entrepreneurs assume the debt obligation
dysfunctional customers has received scant attention. Employee dysfunctional of their group members conditional on default. We show that in equilibrium, this
behavior towards customers, even when the latter is being incivil, is likely to group loan mechanism leads to within group insurance as well as strategic
lower customer service and increase customer turnover, thus resulting in lower default. We study the effect of this group loan mechanism on microlenders’ loan
firm performance. Thus, it becomes imperative to explore the underlying offers, and discuss the implications for microlenders and small and micro-
psychological process, which makes a frontline employee retaliating back to the entrepreneurs.
customer. In this study, a boundary conditioned framework was developed in
which the relationship between customer incivility and employee retaliation 3 - Can Making Family Salient Improve Retirement Contributions?
behavior was mediated by the level of employee disgust. Furthermore, the Evidence from Field Experiments in Mexico
relationship between customer uncivil behavior and employee disgust was Matthew Osborne, University of Toronto,
moderated by employees’ emotional intelligence. The ethnic dissimilarity of the 105 St George St, Toronto, ON, M5S 3E6, Canada,
customer with that of the focal frontline employee moderated the relationship matthew.osborne@rotman.utoronto.ca, Avni M. Shah,
between employee disgust and employee retaliation. Two scenario-based
experiments with frontline employees in the banking (Study 1, n= 220) and
Dilip Soman, Jaclyn Lefkowitz, Andrew Fertig, Nina Mazar
restaurant sector (Study 2, n= 308) of the UK were conducted to test the Despite good intentions, consumers regularly struggle to reach their retirement
framework. Results of the moderated mediation analysis establish empirical savings goals. While this is a persistent and pervasive issue all over the world, the
support for our hypotheses. Managerial implications are also discussed. task of improving retirement contributions is particularly challenging in Mexico,
where less than 0.5% of active pension holders make more than the minimum
4 - Market Positioning using Cross-reward Effects in a Coalition contribution to their retirement accounts. In this paper, we conduct three large-
Loyalty Program scale field experiments aimed at designing interventions to help overcome biases
Valeria Stourm, Assistant Professor of Marketing, HEC Paris, surrounding excessive discounting in retirement contributions. Using redesigned
Jouy-en-Josas, 78351, France, stourmv@hec.fr, Eric T. Bradlow, retirement account statements, some of our experiments provide evidence that
Peter S. Fader various nudges traditionally associated with improving savings (e.g., gain frame,
loss frame, fresh start framing, small amounts, and wallet cutout) do not always
While single-brand reward programs encourage customers to remain loyal to that lead to positive outcomes: We observe that traditional nudges have either no
one brand, coalition programs encourage customers to be “promiscuous” by effect, or even a significant negative effect, on an individual’s propensity to make
offering points redeemable across partner stores. Despite the benefits of this “open voluntary contributions to his or her retirement savings account when the
relationship” with customers, store managers face uncertainty as to how rewards individual is relatively unengaged or unmotivated to save for his or her future.
offered by partners influence transactions at their own stores. We use a model of Promisingly, we find evidence for a novel mechanism to help overcome
multi-store purchase incidence to show how the value of points shared among disengagement from the savings decision: increasing the salience of making
partner stores can explain patterns in customer-level purchases across them. The savings choices to save for one’s family. We find that family messaging prompts
model is used to empirically test hypotheses on how reward spillovers among significantly improve voluntary contribution rates in comparison to the control
partners are driven by: (1) differences in policies on reward redemption, (2) the condition and in relation to other treatments in comparison to the control
overlap in product categories between stores, and (3) geographic distance condition. These effects are significant both in the short term (over a three-month
between stores within a city. In addition, we leverage variation generated by a period following the prompt) and in the longer term (six months later). To
natural experiment, i.e., a devaluation of the program’s points, to demonstrate provide a theoretical framework to interpret our findings, we develop a stylized
how the value of points influences the positioning of partner stores within the model of consumption and savings where individuals receive current period
coalition and the purchasing patterns across them. We conclude by delineating utility from bequests to family members, but underestimate future utility from
some managerial implications for the design of a coalition’s reward policies, such bequests. We show that nudges which correct this bias can be especially
including a simulation showing that customer-centric targeted rewards can be an effective on unengaged individuals if these individuals heavily weight bequest
effective strategy to compensate for the devaluation. utility relative to their own consumption utility.
n FD11 n FD12
Emerging Markets Mobile Apps
Chair: Matthew Osborne, University of Toronto, Toronto, ON, Canada, Chair: Yujie Deng, Clemson University, Central, SC,
matthew.osborne@rotman.utoronto.ca, Avni M. Shah, Dilip Soman, deng2@clemson.edu, Chungsang Tom Lam
Jaclyn Lefkowitz, Andrew Fertig, Nina Mazar
1 - The Impact of Mobile Payment Service
1 - Product’s Characteristics as Drivers of Trickle-down and Reverse
Innovation: Evidence from the Food Industry Qiang Lu, University of Sydney, Discipline of Marketing, School of
Business - Econ Building H69, Sydney, 2006, Australia,
Verdiana Giannetti, PhD Candidate, Bocconi University, steven.lu@sydney.edu.au
Via Roentgen 1, Milan, 20136, Italy,
verdiana.giannetti@phd.unibocconi.it, Gaia Rubera Although mobile payment has received considerable attention from companies,
little research has investigated how it might influence a company’s performance.
Nowadays, growth for multinationals comes largely from introducing innovations In this study, we attempt to shed light on this important topic by studying the
in emerging countries. However, this practice proves particularly challenging for impact of the introduction of a mobile payment service on consumer purchase
firms traditionally operating in developed countries. Adding further complexity, behavior. Based on existing theories of money and time, we construct a
such firms also have to defend their positions in developed countries from the rise conceptual framework and a set of testable hypotheses. To test the hypotheses, we
of emerging countries’ firms. Hence, it is now crucial to understand how to analyze a unique data set from a gasoline retail chain offering a mobile payment
accelerate the diffusion of innovations from emerging countries to developed ones service. Our results show that mobile payment can increase companies’ overall
(i.e., reverse innovation) and vice versa (i.e., trickle-down). A faster diffusion sales. We also find that mobile payment can activate the domain of money,
would in fact unlock additional sources of cash flow by disclosing new markets for thereby encouraging consumers who are price sensitive to choose pre-paid fuel
innovations. Using data on 127,782 food-products’ launches in 51 countries in card services. This impact is moderated by the time saved through the mobile
2001-2014, the paper answers four questions: (1) Which diffusion process occurs payment service. Furthermore, consumers who adopt a mobile payment service
faster: trickle-down or reverse innovation? (2) Which characteristics of tend to purchase less in each transaction; this is especially true for regular product
innovations accelerate trickle-down and reverse innovation? (3) Is there users. We also provide managerial implications.
heterogeneity in the effects of such characteristics across specific emerging
(developed) countries? (4) Does the speed of trickle-down (reverse innovation)
influence the performance of innovations? Results show that: reverse innovation
occurs faster than trickle-down; price, number of claims, and package size all play
75

2 - Customer Experiences in Customer Journey on Mobile Platforms
Rakhi Thakur, Associate Professor, S.P. Jain Institute of n FD13
Management and Research, Bhavans Campus Munshi Nagar, Room 746, Alter Hall
Dadabhai Road Andheri West, Mumbai, 400058, India,
rakhi.thakur@spjimr.org New Products and Innovation I
Customer experience has been attracting a lot of interest with the belief that Contributed Session
creating strong, positive experiences within the customer journey is likely to Chair: Masataka Yamada, Nagoya University of Commerce and
improve customer loyalty. Monitoring customer reactions to firm offerings are Business, 149-773 Takenoyama, Iwasaki-cho, Nisshin-shi Aichi-ken,
one of the key elements of understanding and managing customer experience.
470-0131, Japan, myamada@phd.stern.nyu.edu
Assessment of customer satisfaction resulting from a comparison of the actual
delivered performance with customer expectations is one of the most commonly 1 - The Perils of New Product Promotions: A Field Experiment
used yardsticks for the same. Scholars have reported significant effects of Sha Zhang, Assistant Professor, University of Chinese Academy of
satisfaction on customer behaviour, loyalty, and firm performance. Non- Sciences, Beijing, China, zhangsha@ucas.ac.cn, Chenxi Li,
monotonic patterns of impact of satisfaction and customer delight have also Xueming Luo
received considerable attention in this space. This study aims at understanding the
moderating role of varied customer experiences in satisfaction - loyalty paradigm Promoting new products to consumers has been a standard strategy by default
with a focus on mobile devices. The investigation specifically explores since it is widely assumed that people have an intrinsic desire for new over old.
continuance and online review intention as two dimensions of loyalty. This However, there are inherent risks in promoting new products, and firms struggle
research involves multiple studies to identify relevant experiences, followed by to quantify the effects of new product promotions. This study exploits large-scale
conceptualisation and testing of the proposed model. The investigation uses randomized field experiment data on new product promotions with
scenarios of mobile travel review portal apps (TripAdvisor, HolidayIq) and mobile approximately 17,492 customers and over 6 million daily transactions. The results
shopping apps (Amazon, Flipkart) in customer journey during pre-purchase, suggest that new product promotions will result in fewer increases in purchase
purchase and post-purchase phases. This research found that the effect of responses than classic product promotions. Fortunately, high (versus low)
satisfaction on continuance intention is stronger among customers with higher complementary free gifts could mitigate such negative effects of new product
degrees of positive experiences. Further, it was observed that propensity to write promotions. In addition, new product promotions with high-complementary free
online reviews is non-linear among customers with higher degrees of experiences gifts are more effective for dormant and loyal customers, but not for new buyers.
and may not vary directly with satisfaction levels. This study contributes to These findings are robust to a battery of checks with different modeling
evolving scholarly research on customer experiences, especially on mobile estimations, individual heterogeneity, and machine learning techniques with
devices. shallow and deep learning algorithms. For marketers, the findings highlight some
perils of new product promotions and demonstrate how to improve new product
3 - Consumer Multi-homing in Streaming Service promotion effectiveness by matching free gifts and customer segments.
Nuoya Su, Peking University, Beijing, 100871, China,
2 - Harbingers of Failure ... and Success
sunuoya@pku.edu.cn, Xing Li
Chaoqun Chen, Southern Methodist University, Dallas, TX, United
Constructing a unique panel data set of consumers’usage of mobile applications States, chaoqunc@smu.edu, Eric Anderson, Blake McShane
across different streaming platforms, we study the effect of content exclusivity,
switch cost and preference heterogeneity on consumer’s multi-homing decision We extend the work of Anderson et al. (2015) who find evidence of “harbingers
facing competing platforms. Chinese music streaming app industry provides an of failure” — consumers who tend to purchase new products that are destined to
ideal setting. We make use of the execution of copyright protection, which marks meet a doomed fate-along four lines: (i) we replicate their findings in a dataset
the beginning of the two-sided structure and creates differential impacts on users that covers over 400 U.S. retailers and a wide range of product categories, (ii) we
with different pre-existing conditions. Managers can make better decisions in develop a novel semi-parametric approach that yields interpretable consumer-
terms of entry and exclusivity choice with a better understanding of consumers’ level estimates and improved predictive accuracy, (iii) we characterize
multi-homing behavior. Our insights are especially important for managers in harbingers of failure showing that they are wealthier, have more children and
emerging markets where the property right starts to get protected and market larger family size, and shop at warehouse clubs, and (iv) we investigate potential
order is being constructed. mechanisms that explain the harbingers of failure phenomenon finding that
harbingers of failure are more variety-seeking. We find evidence for not only
4 - The Optimal Way to Generate the “Recommended List” for harbingers of failure but also harbingers of success (i.e., customers who tend to
Platforms Like Apple’s App Store purchase new products that are likely to succeed) with the former making up
Yujie Deng, Clemson University, 389 Cross Creek Rd, Apt J, 44% of consumers in our data and the latter making up the remaining 56%.
Central, SC, 29630, United States, deng2@clemson.edu, Further, were all early sales of a new product to harbingers of failure as opposed
Chungsang Tom Lam to harbingers of success, the probability that the new product remains in the
market two (four) years after introduction is five (seven) percentage points lower;
We investigate how platforms like Apple’s App Store or Google Play Store thus, sales to harbingers have a powerful impact — especially when considered in
generate their “recommended list”. In particular, we seek to explain why it is tandem with the high rate of new product failure.
reasonable for them to intentionally add random noise to the generation of the
list instead of truthfully reporting according to the measured quality of the app. 3 - Radical or Incremental? The Effect of Reference Dependence and
Most literature in this field focus on the impact of the best seller apps lists on sales Consumer Learning on Firm Innovation Strategy
or rank but very few of them try to find the mechanism behind these lists. Somnath Banerjee, North Dakota State University, Fargo, ND,
Platforms seek to maximize users’ satisfaction from using the apps. Reporting the United States, s.banerjee@ndsu.edu, Sarang Sunder,
best apps according to the platform’s aggregated information can help the users to Tyson R. Browning
identify the best quality apps in the market. However, adding randomness allows
individuals to have access to apps which originally cannot make the list at the cost A firm’s past innovation strategy determines its customer’s expectations.
of coarsening the information. This is especially beneficial in a market with a lot Simultaneously, the firm’s innovation strategy is also influenced by customer
of individual heterogeneity. We prove that the variance of this optimal noise is expectations. We study this interdependency between customer expectations and
increasing in individual differences, and decreasing in aggregate app differences. firm innovation strategy in a dynamic context. While some firms may choose to
And if individual preferences are highly correlated, optimal noise decreases. We introduce radical (but infrequent) innovations to ‘wow’ the customer, others
extend the model to investigate more into the optimal list length, optimal number choose to introduce incremental (but more frequent) innovations in an effort to
of lists, and individual-specific recommendation list. ‘keep the customer engaged’. As such, the decision between radical versus
incremental innovations depends on the firm’s understanding of consumer
expectations and learning. However, it is not obvious how consumer learning,
reference dependence and loss aversion affect the firm’s radical versus
incremental innovation decision. That is, should the firm always launch at full
quality or hold back some features for subsequent launches? We develop a two-
period game-theoretic model of firm innovation with endogenous consumer
learning to examine the relationship between consumer expectation evolution
and a firm’s innovation. We find that a firm’s choice between incremental versus
radical innovation depends on a tradeoff between the potential for consumer
learning and the extent of loss aversion. When both loss aversion and potential
for consumer learning are moderate, it is better for a monopolist to pursue
incremental innovation. However, if loss aversion in the market is high and
potential for consumer learning is low then it is better to hold back quality and
release it later, while if potential for consumer learning is high, it is better to
release a high quality product at once. We also find that prior belief about firm’s
quality and noise in learning moderates the relationship between firm innovation,
loss aversion and potential for consumer learning.
76

4 - The Organic Influencers: Scale Development and value of brand equity and indicate that analysts’ activities can represent a crucial
Extraction Method path through which this key intangible asset affects firm value.
Masataka Yamada, Professor of Marketing, Nagoya University of
Commerce and Business, 149-773 Takenoyama,
Iwasaki-cho, Nisshin-shi Aichi-ken, 470-0131, Japan, n FD15
myamada@phd.stern.nyu.edu, Shohei Hasegawa,
Toshihiko Nagaoka Room 603, Alter Hall
The trading environment has been changed dramatically by ICT during the past CB - Changing Attitudes
two decades. While the industry has raised consumers and developed own Contributed Session
business skills and cultures through ICT, consumers have also built their shopping
skills and habits. Among them, we call the consumer who influences others as the Chair: Serdar Sayman, Koc University, Rumeli Feneri Yolu, Sariyer,
organic consumer influencer. Therefore, the industry has started to investigate Istanbul, 34450, Turkey, ssayman@ku.edu.tr
influencers in addition to the innovators. This study is dealing with ordinary
consumers, not super influencers. First, we propose a developing method of an
1 - Changing Consumer Landscapes in Developing Countries:
order-made-like scale to find a required condition for the highest rank reviewers Growing the Organic Market in Mexico
in a shopping mall assumed as organic influencers. Second, we investigate the Julie Stanton, Associate Professor, Pennsylvania State University,
extracting method of the highest rank. The reviewer ranking has a pyramid-like 25 Yearsley Mill Rd, Media, PA, 19063, United States,
structure whose lowest rank has the largest number of people, and as you rank jvs11@psu.edu
up, the number becomes smaller to the top rank. To obtain the highest rank
In Mexico, organic food sales are limited and largely involve specialty stores.
reviewers, we developed a forecasting model by Ordinal Logistic Regression.
However, production is growing, mostly destined for export, and consumers are
Then, we encountered a unique problem where while the lowest rank has
well aware of the impact of organic production on the local farm economy. To
exceptionally accurate forecast, the rest shows inaccurate predictions. We reached
gauge overall consumer interest, this research explores Mexican consumer
a conclusion where Binomial Ordinal Logistic Regression on the top two ranks
attitudes toward organic food and the health and environmental attributes often
will provide the best forecast for the highest rank.
assigned to it. Using focus groups and photographic documentation, the study
shows the range of lifestyle concerns and contradictions in priorities common
among Mexican consumers. Traditionally, extended families live together, with an
n FD14 older maternal figure preparing traditional recipes with raw ingredients. Little in
the way of processed foods is purchased, especially not from modern grocery
Room 607, Alter Hall stores/supermarkets. However, dual-income families, and families with their own
nuclear family homes, have grown in prevalence in Mexico, leading to greater
Marketing & Finance interest in convenience foods. Supermarkets have exploded in the market. The
Contributed Session present study examines how individuals relate to these trends, what meanings
and significance they link to them, whether they seek foods based on specific
Chair: Melissa Boeuf, University of Montpellier, Place Eugÿne Bataillon priorities, where health, ecological or fairness attributes enter into the equation (if
– CC 19001, Montpellier, 34095, France, melissa.boeuf@umontpellier.fr at all), and the like. Such attributes are often associated with organic, GMO-free,
1 - The Role of Social Media in IPO Valuation locally grown and other alternative food labels. The conclusions offer insight into
growing the alternative food market in developing countries. Given the
Malika Chaudhuri, University of Dayton, 300 College Park,
qualitative nature of the data used in this study, quantitative research questions
Dayton, OH, 45469, United States, mchaudhuri1@udayton.edu, are proposed to further advance the understanding of how the food industry can
Hang Nguyen and should approach these changing marketplaces.
Social media have been serving as important platforms for firms to communicate 2 - Horizontal Referrals in B2b Markets
with consumers regarding new product offerings and with investors regarding
corporate strategies. Even though a large body of literature examines the impact
Mahima Hada, Assistant Professor, Baruch College, CUNY,
of corporate strategy announcements on firm financial performance, there is Marketing Dept; B12-240, One Bernard Baruch Way, New York,
limited understanding of the role of social media as a communication channel NY, 10010, United States, mahima.hada@baruch.cuny.edu,
between firms and their respective investors. In the current research, we focus on Arnaud De Bruyn, Gary L. Lilien
one of the most important announcements firms make when they go public, that In complex B2B markets, suppliers often know more about other suppliers than
is, initial public offerings (IPOs). Using a sample of 2600 IPO announcements their customers do. Thus, suppliers can reduce customers’ search costs by
made by publicly traded firms during the 2010-2015 period, we investigate how recommending other suppliers - by making horizontal referrals. However, for
investor engagement on social media in conjunction with other traditional existing suppliers, making horizontal referrals is akin to referring competitors.
marketing efforts influence IPO valuations. The findings extend the current ‘IPO Drawing from research on the dark and bright side of relationship marketing, the
and stock price valuation’ literature by indicating that investor sentiment authors argue that referring suppliers are conflicted between maintaining
expressed on social media platforms is positively associated with the IPO customer relationships and minimizing competitor threats. First, the authors use
valuation. Interestingly, our time-varying effect modeling (TVEM) approach an experimental economics approach to show how referring suppliers should
allows us to accurately examine the movement of the stock prices overtime behave when maximizing their utility in horizontal referrals. Second, they use a
compared to the other moderating approaches. Lastly, our results suggest that conjoint experiment and show that managers actually do not behave in ways that
influencers identified in the online investor community and brand relevance in would maximize their economic gains - rather, they err on the side of
category (BRIC) are critical variables that moderate the relationship. Our research maintaining customer relationships as long as they are not extensively threatened
sheds light on the significant role of investors’ online engagement in the IPO by the referred competitor.
process and provides useful implications for the IPO firms.
3 - Survival of Firms: Role of Consumer Decision Replication
2 - A Study of the Impact of Brand Equity on Firm Value and the
Shameek Sinha, Assistant Professor, IE Business School, IE
Mediating Role of Analysts
University, Calle de Maria de Molina, 12, 5th Floor, Madrid,
Melissa Boeuf, PhD Candidate - Teaching and Research Assistant,
28006, Spain, shameek.sinha@ie.edu, Sreyaa Guha
University of Montpellier, Place Eugene Bataillon – CC 19001,
Montpellier, 34095, France, melissa.boeuf@umontpellier.fr, We study firm survival as a function of consumer decision replication. Both
Philippe Aurier product and service firms suffer from the risks of bad transactions with
consumers. This can lead to consumer abandonment or, in other words, failure at
This research explores the mechanisms linking brand equity and firm value. This consumer nodes. Owing to social interactions, failure decisions may be replicated
intangible asset is of utmost importance and several studies have shown that by other consumers. As more consumers replicate failure decisions, the balance of
brand value has a direct positive impact on firm value. However, little is known the population of consumers that abandon and of those that remain, changes.
about the intermediate variables entering in the brand value-firm value This affects the survival time of the firm. To counter decision replication, the firm
relationship. Our research addresses this gap by suggesting financial analysts as a sends out signals (price and advertisement), over and above maintaining
mediator between brand value and financial performance. In the marketing- service/product quality. Given these two factors - replication and signalling
finance literature, the ultimate metric of performance is firm value, measured affecting firm survival, we address two questions (i) In presence of consumer
through return and risk. Firm stock risk is a fundamental metric as greater risk decision replication and firm signalling, does the survival time of a firm contract?
implies vulnerable and uncertain future cash flows, which could damage firm and (ii) In presence of consumer decision replication, do signals given out by one
stock wealth in the long-run. Total risk has two components: systematic risk and firm affect the survival time of other firms? We answer these questions by
idiosyncratic (or specific) risk. This latter is associated with firm-specific elements developing a survival function for firms. We model time in a way that each period
such as marketing mix decisions or brand strategies, and accounts for about 80% presents an opportunity to encounter failure at a consumer node. To derive
of total firms’ risk. Given its importance, studying its antecedents appears as failure, first, we define a social interaction based individual utility structure. Next,
relevant. Based on a longitudinal study over seventeen years using Interbrand’s we use this utility structure to develop a utility based decision replication
yearly financial measure of brand value and Fama-French-Carhart financial algorithm. The decision replication algorithm is based on evolutionary game
model to measure firm-idiosyncratic risk, we find that brand value reduces firm theoretic approach. Finally, firm signalling parameters are integrated with the
specific risk and this impact is fully mediated by analysts’ recommendations. decision replication to derive the survival function for the firm through an
These results reveal that analysts may help investors discover and incorporate the accelerated failure time model predicting the survival time contraction.
77

4 - A Reference Dependent Utility Model for Attraction and 3 - How Seeded Marketing Campaign Characteristics Drive
Compromise Effects Firm-created Word of Mouth and Revenue
Serdar Sayman, Associate Professor of Marketing, Koc University, Ulrike Phieler, European University Viadrina, Große Scharrnstraße
Rumeli Feneri Yolu, Sariyer, Istanbul, 34450, Turkey, 59, Frankfurt (Oder), 15230, Germany, phieler@europa-uni.de,
ssayman@ku.edu.tr, Baler Bilgin Florian Dost
Attraction and compromise effects refer to increases in the choice share of a target Marketing managers are highly interested in seeded marketing campaigns
option (T) compared to its competitor (C) when another option (D) is added to (SMCs), however, when planning a SMC they are at a loss. Prior research on
the choice set. In the case of attraction effect (AE), an asymmetrically dominated SMCs does not address the three key cost drivers of a SMC (campaign size,
or “weak” option is added. In the compromise effect (CE), the added option provided content, and campaign duration) and how they are related to resulting
makes T the middle or compromise product. The current paper submits that a firm-created or amplified word of mouth (aWOM) and incremental revenue
reference-dependent utility model can accommodate both effects in the same effects. Moreover, organic WOM literature suggests important context conditions,
framework. More specifically, utility of an option includes both regular and e.g. functional, social, and emotional characteristics of the product, thus changing
reference-dependent (gain-loss) terms. Any available option can serve as a the impact of the same SMC—as by size, content, and duration—depending on
reference with a certain probability. We examine how the attractiveness of T vis- the promoted product. The present research uses a unique dataset of 167 SMCs to
à-vis C changes as the location of D on the attribute space is varied. Both for AE investigate (1) how SMC characteristics affect SMC impact on aWOM volume and
and CE, a fraction of buyers, who would have treated T or C as the reference in revenue, (2) how aWOM volume mediates this relationship, and (3) how
the core set (two options), treat D as the reference in the extended set (three contextual factors, like price, positioning, or product design impact both aWOM
options); and D’s location is favorable for T for such a switching. AE and CE volume and SMC-related revenues. As a result, this study offers the first empirical
happen without any changes in the utility function; i.e. in the weights or investigation into the complete pathway from managerial SMC decisions through
subjective values. Directional predictions by our analysis regarding the location aWOM to incremental revenues. Our results confirm diminishing returns, even in
of D are by and large consistent with prior empirical findings. Furthermore, we the smaller range of actual SMC sizes, and provide with a short-term SMC size
are able to make new testable predictions (e.g. D can benefitC, even though it is revenue elasticity of .46. Interestingly, product characteristics mostly affect how
dominated by T but not C). aWOM translates into revenues, but not how SMC characteristics spawn WOM.
Specifically, high-priced, but perceived as budget brands benefit from higher
incremental revenue via aWOM. Surprisingly, products displaying individuals’
distinctness decrease revenue, which runs contrary to organic WOM literature.
n FD16 Thus, we provide managers with insights for optimal SMC planning, inform how
their specific product may impact expected SMC results, and offer insights for
Room 231, Alter Hall aWOM literature.
WOM I 4 - A Structural Model of Movie Piracy with Word-of-mouth
Contributed Session Zhuang Liu, University of Western Ontario, 1151 Richmond Street,
London, ON, N6A 3K7, Canada, zliu328@uwo.ca
Chair: Zhuang Liu, Western University, 281B Windermere Road,
London, ON, N6G 2J7, Canada, zliu328@uwo.ca Digital piracy have caught great public attention. Despite the cannibalization
effect on legitimate sale, pirated consumption might benefit the sale through
1 - Language Style and Word of Mouth
word-of-mouth. Using a novel dataset of downloads from Bit-Torrent network,
Feng Xin, Keio University, 608, 3-9-9, Minami Ooi, Shinagawa-ku, this paper estimate a structural model of movie piracy with word-of-mouth effect
Tokyo, 1400013, Japan, fengxin@keio.jp to quantify the impact of file-sharing on movie box-office. The estimates show
Why are certain pieces of word-of-mouth (WOM) more effective than others? that digital piracy reduces box-office revenue of motion picture industry by 1.4
Researchers have tried various approaches to answer this question. This study \% over a 20 week period in 10 countries. In addition, positive word-of-mouth
takes a social linguistic approach to understanding consumer information spillovers from pirated consumption contribute to $ 9.4 million (0.14%) to movie
processing and the determinants of WOM’s effectiveness. Reviewing work of box-office revenue
consumer behavior model, the author found that the lack of a model that
explains consumer information sending thus proposes a consumer discourse
process model. Using a dataset of Amazon.com reviews of iPad posted over a five-
year period, the author examines how WOM’s language style shapes WOM n FD17
effectiveness. The results indicate the reviews with categorical language are more Room 31, Alter Hall
efficient than those with narrative language. However, the marginal benefit of
categorical language on WOM’s effectiveness decreases. Furthermore, reviews Meeting The Editors Session II
that reflect information sender’s high social status or leadership has higher
effectiveness. The author also examines the moderator role of reviewer’s
Panel Session
authenticity. These results hold even when controlling for how other Chair: Mimi Morrin, Temple University, Philadlephia, PA,
fundamental attributes of reviews affect effectiveness (number of word, rating United States,
and emotional tone), as well as review’s marketing variables like product function
information, competitor’s product information and consumer endorsement 1 - Journal of the Academy of Marketing Science
language (e.g., “I love it”, “I recommend it”). Taken together, these findings Rajkumar Venkatesan, University of Virginia, University of
indicate how language style affects WOM’s effectiveness and what kind of Virginia, Charlottesville, VA, 22903, United States,
customers should be advocated to send more information. venkatesanr@darden.virginia.edu
2 - A Study on the Impact of the Content of Online Reviews on Their 2 - Journal of Consumer Psychology
Perceived Helpfulness: The Moderating Role of Product Type Christian Wheeler, Journal of Consumer Psychology, PA,
Keyvan Kasaian, University of Texas at Dallas, Richardson, TX, United States
United States, keyvan.kasaian@utdallas.edu, Ying Xie 3 - Journal of Consumer Research
Although it has been established in the marketing literature that online reviews Jeff Inman, University of Pittsburgh, 372M Mervis Hall, Pittsburgh,
and ratings are significant drivers of sales, much less is known about which PA, 15260, United States, jinman@katz.pitt.edu
reviews are more influential than others. In this study, we mine review content 4 - Journal of Interactive Marketing
and empirically examine the relationship between different types of review Wendy W. Moe, Robert H Smith School of Business, University of
content and the perceived informational quality of the review. Furthermore, we Maryland, College Park, 3469 Van Munching Hall, College Park,
investigate whether the effect of review content can vary across different product
MD, 20742, United States, wmoe@rhsmith.umd.edu
types. Utilizing a large data set of more than two million Amazon reviews across
six product categories, we first employ the Latent Dirichlet Allocation (LDA) 5 - International Journal of Research in Marketing
model to extract topics discussed in those reviews. We then classify those topics Roland T. Rust, University of Maryland, Robert H. Smith School of
into two types, based on whether they are about the horizontal or vertical Business, University of Maryland, College Park, College Park, MD,
attributes of the products. Finally, we analyze whether a discussion of any of 20742, United States, rrust@rhsmith.umd.edu
those two attributes in a review is more or less effective in driving its perceived
helpfulness, depending on the product type. We derive managerial implications 6 - Journal of Retailing
for platform managers, online sellers, users, and advertisers based on our findings. Rajagopalan Sethuraman, Southern Methodist University,
Marketing Dept Cox School of Business, P.O. Box 750333, Dallas,
TX, 75275-0333, United States, rsethura@mail.cox.smu.edu
78
INFORMS MARKETING SCIENCE – 2018 SA02
Saturday, 8:30AM - 10:00AM

Union proposes (two years as Google advocates) decreases cookie lifetime value
by 14.8% (5.9%), which represents a decrease in the value of all cookies of about
7.4% (1.3%). Overall, we find that the average lifetime of a cookie is 215 days
(median 68 days) and the average value of a cookie is €1.43 (median €.02).
n SA01
Room 32, Alter Hall n SA02
Online Advertising and Privacy Protection Room 33, Alter Hall
General Session Dynamic Pricing and Revenue Management:
Chair: Klaus Miller, Goethe University Frankfurt, Frankfurt am Main, Perishable and Seasonal Goods
60323, Germany, klaus.miller@wiwi.uni-frankfurt.de General Session
Co-Chair: Bernd Skiera, Goethe University Frankfurt, Frankfurt am Chair: Mingyu Joo, Ohio State University, Columbus, OH, 43210,
Main, 60323, Germany, skiera@wiwi.uni-frankfurt.de United States, joo.85@osu.edu
1 - Dynamic Selection Problems in Digital Advertising
Co-Chair: Robert E Sanders, The University of Chicago, Chicago, IL,
Navdeep S Sahni, Stanford University, 655 Knight Way,
United States, robs@uchicago.edu
Knight Management Center, Stanford, CA, 94305, United States,
navdeep.sahni@gmail.com 1 - An Empirical Test of Price Theories in the Market for
Seasonal Goods
Consumers may dynamically select themselves into seeing more, or fewer ads. A
Gonca Soysal, University of Arkansas, Sam M. Walton College of
consumer who saw an ad while browsing news on the internet might visit the
advertiser’s website and might, as a result, see more ads in the future. Dynamic Business, University of Arkansas, Fayetteville, AR, 72701,
selection of this nature makes it difficult to estimate the effects of frequency of United States, gpsoysal@uark.edu, Pradeep Chintagunta
advertising, even when the researcher conducts a randomized A/B experiment. Three theories have been proposed in the literature to describe the reason behind
This paper discusses the relevance of this problem, and provides a solution to sharp price declines observed over a product’s short lifecycle in seasonal
address it. (perishable) goods markets: Prices decline as a result of (1) decreasing opportunity
2 - The Impact of Privacy Policy on the Auction Market for Online costs over time; (2) firm’s uncertainty about relative product popularity at the
start of the season; (3) inter-temporal price discrimination. We first provide
Display Advertising empirically testable implications of each theory. Then, using price and demand
Garrett A. Johnson, Boston University, Boston, MA, United States, data from a large US specialty apparel retailer, we assess whether these theories
garrett.johnson@kellogg.northwestern.edu have empirical support in the fashion apparel market. A unique feature of our
The advent of online advertising has simultaneously created unprecedented data that we leverage in our empirical analysis is the availability of inventory
opportunities for advertisers to target consumers and prompted privacy concerns information over time. Our results indicate that decreasing opportunity costs over
among consumers and regulators. This paper estimates the financial impact of time is the main driver behind the observed price declines. We do not find
privacy policies on the online display ad industry by applying an empirical model empirical support for the impact of the retailer’s initial uncertainty about relative
to a proprietary auction dataset. Two challenges complicate the analysis. First, product popularity or intertemporal price discrimination on observed price
while the advertisers are assumed to publicly observe tracking profiles, the declines in our data.
econometrician does not see this data. My model overcomes this challenge by 2 - The Effects of Menu Costs on Supply Chain Efficiency: Evidence
disentangling the unobserved premium paid for certain users from the observed
from Adoption of the Electronic Shelf Label Technology
bids. In order to simulate a market in which advertisers can no longer track users,
I set the unobserved bid premium’s variance to zero. Second, the data provider Ioannis Stamatopoulos, University of Texas at Austin, McCombs
uses a novel auction mechanism in which first-price bidders and second-price School of Business, 2110 Speedway B6000, Austin, TX, 78705,
bidders operate concurrently. I develop new techniques to analyze these hybrid United States, yannis.stamos@mccombs.utexas.edu,
auctions. I consider three privacy policies that vary by the degree of user choice. Achal Bassamboo, Antonio Moreno
My results suggest that online publisher revenues drop by 3.9% under an opt-out
We use the adoption of electronic shelf labels (ESLs) by a major international
policy, 34.6% under an opt-in policy, and 38.5% under a tracking ban. Total
grocery retailer in 2015 in the United Kingdom to identify the effects of reducing
advertiser surplus drops by 4.6%, 4’39%, and 45.5% respectively.
physical menu costs (operational costs of price adjustment) on supply chain
3 - Digital Identity, Privacy and the Inequality of Outcomes: efficiency. The ESL technology essentially eliminates the physical costs associated
The Case of the Aadhaar Initiative with price adjustment (e.g., costs of printing and distributing price tags). We find
Anuj Kapoor, University of Utah, David Eccles School of Business, that the elimination of physical menu costs benefits all supply chain stakeholders
(retailer, consumers, suppliers). In our setting, daily revenues increased, the
1655 Campus Center Drive, Salt Lake City, Utah, UT, 84102, average price per unit sold decreased, and daily sales volumes increased as a result
United States, anujcapoor@gmail.com, Avi Goldfarb, of ESLs. We also find that ESL adoption increased price-adjustment volume,
Catherine E. Tucker decreased the average size of a price adjustment, and decreased the batching of
The question of digital identity poses many challenges for both policymakers and price changes across different products. Finally, we find that ESL adoption had a
firms. On the one hand digital identity poses unique privacy risks to the statistically significant effect on the volume of downward price changes, but not
individual. On the other hand, without a digital identity people may be excluded on the volume of upward price changes, which explains the direction of the
from digital services. Therefore, to prevent digital exclusion it is natural for change in operational outcomes.
policymakers to try and facilitate digital identities for the poor. To study the 3 - Pre-ordering And Manufacturer’s Return Policies for Durable
tensions inherent in this digitization process we study the digital transition to
Goods: Theory and Empirical Evidence
Aadhaar - which is a unique digital identifier the Indian government has
sponsored for its citizens. We document a unique distortion in this process. We Jong Yeob Kim, PhD Student, NYU Stern School of Business,
show that poor people are more likely to experience issues with establishing a Tisch Hall 921, 40 West Fourth Street, New York, NY, 10012,
digital identity due to transcription errors in their details. To identify the causal United States, jkim3@stern.nyu.edu, Masakazu Ishihara
effects of these digital errors we exploit variation in the quality of workers This paper theoretically examines the roles of manufacturers’ return policies in
assigned to each region to facilitate this digital transformation process. We durable goods markets when forward-looking consumers, retailers, and
evaluate whether these transcription errors matter we then turn to whether study manufacturer face uncertainty about product quality and consumers have an
whether these delays affect real financial outcomes, and find evidence that they option to pre-order. Using a simple multi-period vertical differentiation model, we
do. investigate the impact of manufacturers’ return policies on equilibrium purchase
4 - Economic Damage of Cookie Lifetime Restrictions decisions, retailer’s pricing and inventory stocking decisions, and manufacturer’s
Klaus Miller, Goethe-University, Theodor-W.-Adorno-Platz 4, wholesale pricing decisions. Our goal is to understand the conditions under which
it is optimal for a manufacturer to accept returns from retailers. We then test our
Frankfurt am Main, 60323, Germany, theoretical predictions using data from the U.S. and Japanese video game
klaus.miller@wiwi.uni-frankfurt.de, Bernd Skiera markets. In the U.S. market, video game publishers accept returns from retailers,
Over the past few years, regulators have begun to consider restricting a cookie’s but in the Japanese market, publishers do not. The novel aspects of our data are
lifetime or even banning cookies altogether as a way to protect consumer privacy. that we observe pre-order sales and retailer’s inventory stocking decisions. We
Most of this debate has taken place in the absence of any quantified cost-benefit show that our theoretical predictions are empirically supported in these markets.
analysis. To begin to fill this gap in the discourse, we estimate the potential
economic damage of lifespan restrictions on cookies. Our analysis is based on an
empirical study on cookies of 54,127 users who received about 130 million ad
impressions over 2.5 years. Only 22% of all cookies increase their daily value
over time but the value of that quantile represent 61% of the value of all cookies.
This analysis suggests that restricting their lifetime to one year as the European
79
SA03 INFORMS MARKETING SCIENCE – 2018

4 - Reducing Retailer Food Waste through Revenue Management competitor, he is better off focusing exclusively on the sale of music in his store.
Robert E. Sanders, University of Chicago, 5242 S Hyde Park Blvd, In contrast, if he can sufficiently differentiate his streaming service he should
1009, Chicago, IL, 60615, United States, robs@uchicago.edu operate in the streaming market and charge a higher subscription fee for his
services than his rival. By raising the subscription fee on his streaming platform,
Each year, the perishable grocery industry produces substantial waste, resulting in the provider can guide the competing platform to set high subscription fees as
considerable costs to firms and generating harmful greenhouse gas emissions. I well, thus alleviating price pressures on music sales through his digital store. Our
study the incentives to produce such waste using a novel data set that matches a results also show that as consumer preference for streaming rises, the music
large supermarket chain’s loyalty-card database, including the time stamp for provider might choose to abandon the sale of digital songs completely and focus
customer trips, with the firm’s product-level information on marginal cost, shelf exclusively on streaming. In this case, it may charge, on average, lower fees than
life (perishability), and daily productionprocesses. In a descriptive analysis, I first the competing streamer if the rival streamer has greater loyalty among
show the firm’s production of waste correlates positively with the degree of subscribers.
demand uncertainty and with its market power. This relationship is consistent
with the classic newsvendor problem and suggests positive waste levels are an 4 - Pricing Under Uncertainty: Data Throttling and Pay-As-You-Go
endogenously-determined outcome. I then conduct a structural analysis of the Bo Zhou, University of Maryland, College Park, 3461 Van
artisanal bread category to assess the supermarket chain’s incentives to mitigate Munching Hall, Smith School of Business, College Park, MD,
waste. Currently, grocery retailers have not yet adopted revenue management 20742, United States, bzhou@rhsmith.umd.edu, Debu Purohit
(intraday markdowns) due to insufficient scale. A hypothetical policy that reduces
the costs of revenue management sufficiently to induce adoption would reduce In many markets, consumers are uncertain about their consumption needs over a
total planned waste for the chain by 13%. Surprisingly, the incentive to reduce period of time. For example, consumers are uncertain about how much data they
waste varies across the individual stores: in several stores, the firm endogenously will need for their cell phone or how many miles they will drive their car over the
increases planned waste, suggesting revenue management alone may be course of a year. In both these instances, uncertainty affects not only the choice of
insufficient to curb grocery waste. I then simulate the effects of a ban recently cell phone or lease contracts but also subsequent consumption levels. In this
enacted in California. The ban increases firms’ waste disposalcosts by mandating paper, we focus on the telecommunications market and analyze pricing contracts
composting. For the supermarket chain, this policy increases the returns to that are designed to deal with this uncertainty. In particular, we study two
revenue management adoption from 7% to 11% and induces the firm to use popular contracts: Data Throttling and Pay-As-You-Go (PG). Under a data
intraday markdowns, resulting in a combined waste reduction of 31%. throttling plan, the firm offers a high speed (e.g., 4G) connection up to a specific
level of consumption and, if consumption exceeds this level, then the speed is
lowered to a 3G level. In contrast, the PG plan serves as a benchmark in which
the firm charges a rate based solely on the consumption level. There are two
n SA03 segments of high and low-usage consumers whose consumption needs are
random draws from a uniform distribution. On average, high-usage consumers
Room 34, Alter Hall expect to need more data low-usage consumers. Furthermore, all consumers are
Extending Classic Game Theory Models to Reflect uncertain about the value of each consumption opportunity, which is drawn from
a random distribution. We then compare the profitability of data throttling plans
Practical Realities and PG plans, and identified how the throttled speed is affected by market
characteristics. Importantly, we find that the firm can do better if it offers a
General Session combination of throttling and PG plans.
Chair: Robert Waiser, London Business School, London, NW1 4SA,
United Kingdom, rwaiser@london.edu
1 - Quality Signaling and Sticky Prices n SA04
Ruitong Wang, University of Minnesota, Minneapolis, MN,
United States, wang1952@umn.edu, Yi Zhu, Akshay Rao Room 35, Alter Hall
Retailers can signal the unobservable quality of a manufacturer’s product through UGC Platform Design
the retail price. Consumers rationally infer quality based on the cost of the signal General Session
due to prices that impose a cost on the retailer, which will be recovered from
future retail sales on other products. We demonstrate that, if consumers believe Chair: Jin-Hee Huh, University of Maryland-College Park,
that a particular mid-range of prices might not perfectly signal unobservable Greenbelt, MD, 20770, United States, jhhuh@rhsmith.umd.edu
quality, retailers will face an incentive to not set prices in that range. Thus, retail
prices below and above that range may be sticky to the change of wholesale
1 - Extremity Bias in Online Reviews: A Field Experiment
prices. The sticky signaling prices handicap retailer’s price decision, but may Leif Brandes, Warwick Business School, University of Warwick,
facilitate channel coordination. We show how the sticky prices can increase Coventry, CV4 7AL, United Kingdom, Leif.Brandes@wbs.ac.uk,
channel members’ profits and consumer welfare, and a high-quality David Godes, Dina Mayzlin
manufacturer can benefit from quality uncertainty. In a range of studies across many platforms, submitted online ratings have been
2 - Delegating Sales Force Incentive Design to Sales Managers: shown to be characterized by a distribution with disproportionately-heavy tails.
A Comparison of Approaches These have been referred to as “u-shaped distributions” or “j-shaped
distributions.” Our focus in this paper is on understanding the underlying process
Robert Waiser, London Business School, Regent’s Park, London,
that yields such a distribution. We develop a simple analytical model to capture
NW1 4SA, United Kingdom, rwaiser@london.edu the most-common explanation: differences in utility associated with posting
Firms commonly face the challenge of designing sales force incentives in the extreme vs moderate reviews. We compare the predictions of this model with
absence of information about heterogeneous territories (or salesperson abilities, those of an alternative theory based on customers forgetting about writing a
etc.), but few have adopted the well-accepted theoretical solution of offering review over time. The forgetting rate, by assumption, is higher for moderate
salespeople menus of contracts. Instead, many firms rely on their sales managers reviews. The two models yield stark differences in the predicted dynamics of
to share information that they gain from spending time ‘in the field’. However, extremity bias. To test our predictions, we use data from a large-scale field
most firms use primarily sales-based (rather than profit-based) incentives for experiment with an online travel platform. In this experiment, we varied the time
those managers, causing a conflict of interest that challenges the credibility of the at which the firm sent out a review solicitation email. Specifically, the time of
information they provide. In this paper, I analyze three approaches by which review solicitation ranged between one and nine days after the end of one’s
firms can delegate sales force incentive design to a sales manager and ensure vacation. This manipulation allows us to observe the extremity dynamics over an
truthful revelation of her information: 1) requiring her to exert costly effort to extended period both before and after the firm’s solicitation email.
loosen a restrictive budget constraint; 2) allowing her to choose from a menu of
contracts, each consisting of her own incentive plan and a budget constraint for
2 - The Effect of Curation Algorithms on Informativeness of Social
sales force incentives; and 3) including in her incentive plan a percentage of her Media in the Presence of “Trolls”
unallocated sales force incentive budget. I identify the conditions (if any) under Amy Pei, University of Southern California, Marshal School of
which each of these approaches is both feasible and optimal, including Business, 3670 Trousdale Parkway, Los Angeles, CA, 90089-0808,
comparison with non-delegation alternatives. United States, Lei.Pei.2019@marshall.usc.edu, Dina Mayzlin
3 - The Emergence of Streaming Technology and its Impact on Users on social media platforms face a multitude of potential sources of
Established Music Providers information. Time and information-processing constraints imply that a user can
Mark Bender, PhD, University of South Florida, 4202 E Fowler only view a small fraction of available information. Many social media platforms
use curation algorithms in order to increase the quality of information viewed by
Ave, Tampa, FL, 33620, United States, bender@usf.edu,
the user. Hence, users are not simply exposed to a random subset of posts, but
Esther Gal-Or, Tansev Geylani rather the subset of posts chosen by the platform to maximize the information
The emergence of streaming technology is changing the pattern of music value of the user. Here we examine the effect of curation algorithms in the
consumption. In this paper, we investigate how an established music provider presence of trolls who infiltrate these platforms to send misinformation in order
with a dominant digital music store responds to this technology. We assert that to manipulate consumers. We show that under certain conditions consumers may
streaming platforms allow uninformed consumers to explore different genres of be worse off under the curation algorithm than under no curation. The intuition
music and learn about their preferences. We show that if the music provider is that under the presence of trolls a curation algorithm that shows a subset of
cannot sufficiently differentiate his streaming service from that offered by the posts (even if they are picked optimally) may inadvertently render the
information unusable to the consumer.
80

3 - The Impact of Reputation Systems on Peer-evaluations 3 - The Impact of Brand-Controlled, Retailer-Controlled, and Social
Jin-Hee Huh, University of Maryland, 420 Ridge Road, # 314, Touchpoints on Consumer Purchase Choice
Greenbelt, MD, 20770, United States, jhhuh@rhsmith.umd.edu, Shane Baxendale, Cranfield University, Cranfield,
David Godes, Seshadri Tirunillai United Kingdom, s.baxendale@cranfield.ac.uk, Hugh Wilson,
Understanding how opinions are received and evaluated is important for an Emma McDonald
online community because the volume and quality of users’ opinions are the key The relative impact of different touchpoints - brand-controlled, retailer-controlled
determinants of its success. In this paper, we investigate how a reputation system and social - is managerially important for resource allocation, but research is
affects peer-evaluations in an online community. In contrast to previous research limited. This study examines the impact of seven touchpoints on a consumer’s
on reputation systems, which has predominantly shown that reputation systems brand choice when purchasing a television. The emerging real-time experience
can induce posting activity and quality contributions, we study how reputation tracking method, in which consumers report touchpoints by mobile text message,
markers (“badges,” for example) may change peer-evaluations. We rely on a records 1,524 in the week preceding a purchase by 520 consumers. This is
unique and detailed data set and employ a difference-in-differences approach, integrated with self-reported purchasing data and weekly pricing data. A nested
combined with propensity score matching, that suggests that, all else equal, multinomial logit model captures a two-stage hierarchical decision process of
posters receive disproportionately-higher evaluations of their posts after they earn choosing a screen size category and then a brand.
a reputation marker, irrespective of post quality. This suggests a “rich-get-richer”
process induced by a reputation system that may have the unintended effect of 4 - Consumer Online Search and Purchase with Endogenous
favoring some participants at the expense of equally-skilled others. Channel Choice
Shuo Zhang, Americold Logistics LLC, 10 Glenlake Parkway NE, #
800, Atlanta, GA, 30328, United States, shuozhang@wustl.edu
n SA05 With the development of mobile technology in recent years, the mobile shopping
channel has emerged to represent a large portion of consumer online shopping as
Room 232, Alter Hall an alternative to the traditional PC channel. However, the conversion rate on
mobile channel is significantly lower than that on the PC channel. This would be
Mobile, Algorithm, and Artificial Intelligence (AI) a concerning trend if the mobile channel cannibalizes PC traffic but is not able to
Session VI: Modeling Customer Choices convert visitors into purchasers. We seek to understand what drives the difference
on Multichannels in conversation rate between mobile and PC channels. Several potential
hypotheses are tested against empirical evidence, including difference in search
General Session cost or transaction cost. The hypothesis best supported by empirical evidence is
that consumers endogenously choose which channel to browse. It is easier to start
Chair: Xueming Luo, Temple University, Philadelphia, PA, 19122,
a search on mobile channel (e.g., ease of access) but more difficult for intensive
United States, luoxm@temple.edu search (e.g., small screen size) than on PC channel. The key insight is that the
Co-Chair: Shane Baxendale, Cranfield University, Cranfield, mobile channel draws in a systematically different pool of consumers whose
United Kingdom, s.baxendale@cranfield.ac.uk initial interest to purchase are lower on average than consumers who choose to
search from the PC channel. Hence, mobile channel has both a market expansion
1 - Cross-Device Shopping: How Do Consumers Search on Fixed vs. and cannibalization effect for online retailers. In order to quantify the overall
Mobile Device? profit implication, we formally model consumers channel choice in addition to
Yiyi Li, University of Delaware, Newark, DE, United States, their search and purchase decisions. With counterfactual analysis, we study the
yiyil@udel.edu, Yi-Lin Tsai, Yiping Song impact of channel specific pricing on retailer’s profit by finding the optimal price
for consumers with heterogeneous preference in the PC and mobile channels.
hopping with multiple devices - both “fixed” (laptops and desktops) and “mobile”
(smartphones and tablets) - has become an increasingly important trend.
Consumers may search for product information on one device and make
purchase on another. This paper investigates how consumers search differently Saturday, 8:30AM - 10:30PM
across devices and what makes consumers switch from one device to another. We
use a clickstream data from an Internet-based fashion retailer to study consumer’s
cross-shopping behavior. We first examine consumers’ search depth (e.g., time,
number of pages, and number of products), search paths (e.g., starting with n SA07
specific keyword, starting with recommendation in landing pages), likelihood for
revisiting, and purchasing decisions across different channels. We then model the Room 237, Alter Hall
choice of channel as a function of consumers’ demographics and behavioral
characteristics (e.g., smartphone model, browser, browsing history, add-to-cart Social Networks & Analysis
history, etc.) and context (i.e., time of the day, day of the week). The findings will Contributed Session
help marketers understand the difference in searching across channels and
improve the interface designs accordingly. Chair: Tae-Hyung Pyo, University of Idaho, 875 Perimeter Dr. MS 3161,
Moscow, ID, 83844, United States, tpyo@uidaho.edu
2 - Overcoming Digital Ads Apathy: Content Marketing in a Mobile
1 - Status Leaders, Hubs and Their Social Influence
and Distracted World
Huazhong Zhao, Assistant Professor, City University of Hong Kong,
Minki Kim, KAIST Business School, SUPEX Hall 304,
83 Tat Chee Ave AC3 10-225, Kowloon, Hong Kong,
85 Hoegi-ro, Dongdaemun-gu, Seoul, 130-722, Korea, Republic of,
h.zhao@cityu.edu.hk, Jinhong Xie
minki.kim@kaist.ac.kr, Seokyoon Yoon, Jaewon Yoo,
Wonjoon Kim The prevalence of internet technology and social media has provided marketers
new opportunities to identify influencers and to utilize their social influence to
As digital advertising has become more pervasive and even intrusive, consumers affect consumer decisions. However, the current marketing literature often uses
have become more adept at resisting and avoiding ads. In response to this shift, the general term “opinion leaders” to describe very different types of influencers
content marketing, devoid of any advertising intention, is becoming popular. without identifying how and why their social influence may vary. In this paper,
However, because of the challenging aspects of content marketing related to we first introduce “status leaders” as a new type of influencers in contrast to hub
generating and distributing relevant, engaging, and compelling content, the value influencers. Then, we identify the social influence from both types of influencers
of content marketing has not been explored yet. Overcoming these challenges, to their surrounding consumers. Specifically, our empirical results show that (1)
this study investigates the causal effect of content marketing on customer the spending of status leaders and hubs both positively influence the total
engagement and sales. We conduct a large-scale natural field experiment in spending of their surrounding consumers; (2) when stronger social ties are
collaboration with one of South Korea’s largest book retailers and 60 book developed with their surrounding consumers, a status leader’s social influence
publishers. In our experiment, the treatment group received book-related content decreases while a hub’s social influence increases; and (3) higher personal
without advertising, while the control group was exposed to conventional competitiveness increases a status leader’s social influence while decreases a hub’s
advertisement about a book. We find that exposure to content marketing social influence. This paper contributes to the literature of social network and
increased customer engagement, purchase intention, and immediate and long- social influence by distinguishing two types of influencers, i.e., status leaders and
term sales conversions. The treatment group customers checked in 3.55 hubs, and by providing a competitiveness theory framework to explain the
percentage points more often, clicked through 1.9 times more often, purchased underlying mechanisms. This research also shed light on managerial implications
the book on the same day 2.75 times more often, and purchased the book in the on how to utilize the social influence of both types of influencers in different
subsequent month 2 times more often. A follow-up supplementary survey scenarios.
indicates that customers consumed the content high in information and
entertainment.
81

2 - Examining the Social Influence of a Brand’s PGC on Consumers’
UGC – A Social Network Analysis n SA08
Jesheng Huang, Assistant Professor, Chung Yuan Christian Room 238, Alter Hall
University, 200 Chung Pei Road,, Chung Li District, Taoyuan City,
32023, Taiwan, iamjesheng@gmail.com Consumer Decision-Making – Attention, Price &
It is evident from previous studies that consumers’ user-generated content
Product Returns
(hereafter as UGC) are more credible and trustworthy than brands’ producer- Contributed Session
generated content (hereafter as PGC), because consumers think that PGC only tell
a positive story about the brand but rarely provide the whole brand story even Chair: Ricardo Ribeiro, Católica Porto Business School, Porto, Portugal,
neglecting the negative parts. However, the PGC also has strongly significance to 4169-005, Portugal, rribeiro@porto.ucp.pt
the brand because it could affect the brand credibility and trust through their 1 - Signals Comparison and Matching with Quality Types When Price
properly direct interactions with consumers on the social media platforms. and Return Policy Signal Quality
Therefore, we query whether we can connect the positive effect of UGC to the Buqing Ma, University of Science and Technology of China, 96
PGC. The purpose of this study is to examine how effectiveness of a brand’s PGC
Jinzhai ST, Baohe District, hefei, Anhui province, China, Heife,
will have good impacts on leading the topics of consumers’ UGC and facilitating
them spread across social networks, and to identify what the factors of brand’s China, mabuqing1103@gmail.com, Yunchuan Liu, Jiong Sun
PGC are important to enable consumers having strongly brand engagement to the We develop a competitive model to make comparisons between the quality
brand. The research process are separated into two parts, which are data mining signals which are price and return policy, and match these signals with quality
technique conducted by NodeXL and qualitative data analysis through social types. Our results illustrate that return policy makes market more efficient where
network analysis. We firstly identify the opinion leaders who play a vital role of High-quality and Low-quality products are more apt to be separated. The H-type
raising UGC to the brand’s PGC, then assess their social influence across the product retailer prefers to employ price to imitate, while the L-type product
related social networks, finally, develop the metrics of diagnosing the degree of retailer likes to masquerade through mimicking return policy (price) in the
consumers’ brand engagement and examine the effectiveness of PGC connecting heterogeneous (homogenous) market. In the heterogeneous market, imitating
UGC. Our outcome reveals there are six forms of social influence network, which with two signals, such as price and return policy, enlarges the region of one signal
are polarized, in-group, brand topic, bazaar, broadcast and support. We discuss the (price or return policy) under certain condition. For example, imitating with two
implications for each of six forms and provide some strategic suggestions as well. signal indexes enlarges the valid signaling region of price when the imitation
firm’s quality is low and enlarges that of return policy when the imitation firm’s
3 - Semiparametric Estimation of the Network Distance Effect quality is high under certain condition.
Jongdae Kim, Seoul National University, 1, Gwanak-ro,
Gwanak-gu, 58-317, Seoul, 08826, Korea, Republic of, 2 - Pricing Strategy Based on Degree of Uncertainty and
kim915@naver.com, Jingyo Kim Consumer Types
Kyowon Seo, Seoul National Univ., Seoul, Korea, Republic of,
An emerging literature has started to research how social network properties
affect consumer purchase. In marketing, it is important to look at the effect of kw_seo@snu.ac.kr, Sarang Go, Byungdo Kim
network distance on consumer purchase. However, there are much fewer studies People face various situations they have to decide whether to buy or not, before
about network distance than those about other network properties (e.g., network uncertainty is resolved. Under uncertain conditions, it is most crucial part for
centrality). Therefore, we study the social effect on consumer behavior by consumers that they should consider the expected valuation derived from
focusing on the effect of network distance. Contrary to previous studies, which purchasing tickets or services. Thus, it is important to contemplate buyer
assumed the linearity of network distance effect, we believe that network distance uncertainty about future valuation. Xie and Shugan presented the relationship
has the nonlinear effect because of homophily, the local conformity, and the between spot price and advance price in a situation that involves uncertainty.
social reinforcement in social network structure. In order to capture the Their findings provide the explicit advance pricing strategies that can create profit
complexity of network distance effect well, we implement the linear spline improvements (Xie & Shugan, 2001). Their findings lay a foundation of this
regression model, which is one of the classical semiparametric regression problem, because buyers are almost always not sure about their future valuations
methods. By investigating real social network data including consumers’ network for most services (Xie & Shugan, 2001). In addition to these findings, the
properties and online-item-purchase information, we find that network distance researchers found that profits under option pricing strategy outperform those
has the nonlinear effect on consumer purchase behavior. To be more specific, from advance pricing strategy (Preethika Sainam, 2010). They introduce the
network distance has a monotonic decreasing curve, which means there is a concept of consumer options and analytically prove that consumer options can
certain level of network distance that the effect starts to decrease sharply. This make more profits and also can protect consumers from the pitfall derived from
study has following contributions: First, we find that we need to relax the unwanted outcomes (Preethika Sainam, 2010). In this paper, we want to consider
linearity assumption of network distance effect to fully understand the properties this problem under more complex and real circumstances. We include one more
of social network structure. Second, this finding has several managerial pricing strategy, discounted advance pricing, which is often called early bird
implications especially for those who want to target specific consumers by direct pricing. Consumers need to expect their future valuation for the consumption
marketing. with respect to these price policies, based on expected utility theory. Furthermore,
we divide consumers in two types, risk-neutral consumers and risk-averse
4 - Impact of Preference Similarity on Social Contagion in a Trial of an consumers. We present a simple analytical model in what conditions each pricing
Experience Good strategies can outperforms others based on consumer types and capacity types.
Tae-Hyung Pyo, University of Idaho, 875 Perimeter Dr. MS 3161,
Moscow, ID, 83844, United States, tpyo@uidaho.edu, 3 - Endogenous Product Design and Quality with Rationally
Jae Young Lee Inattentive Consumers
Ricardo Ribeiro, Assistant Professor, Católica Porto Business
Marketing literature are rich in extended studies on social contagion for a trial of
School, Porto, Portugal, rribeiro@porto.ucp.pt, Mariana Cunha,
a new product (Bass 1969; Coleman 1988; Godes and Chevalier 2006; Iyengar,
Van den Bulte, and Valente 2011). This research intends to investigate how one’s António Osório
trial behavior of experience goods is affected by her social contacts, especially how In some markets, consumers do not know the attributes of all the products that
the preference similarity between “influencer” and “influencee” moderate the are available in the market, or the prices at which they are offered. To overcome
impact of social contagion. Based on past studies (McPherson, Smith-Lovin, and this uncertainty consumers may, at a cost, gather and process information about
Cook 2001; Granovetter 1973; Van den Bulte and Lilien 2001), we posit that the attributes and prices of the different products. We present a theoretical
social contagion from similar and dissimilar others operate via different framework that couples endogenous firms’ decisions on the multi-attribute
mechanisms; social learning from similar others and awareness diffusion from dimensions and pricing of products with endogenous consumers’ decisions on
dissimilar others. Given that two different processes (leaning vs. awareness) are what and how much information to gather and process, and which product to
triggered by different social ties, we advance this ideas by arguing that similar purchase. We find a number of interesting results. First, consumers may rationally
others exert more social influence in trial of experience goods that are not of select information strategies that do not fully eliminate their uncertainty and so,
one’s taste, while dissimilar others are more influence in trial of experience goods rationally select to be inattentive. Second, firms do have an incentive to respond
that fit one’s taste. To empirically test our arguments, we analyze music trial to lower information costs by increasing differentiation, as established by the
behavior of 1,000 users for 46 newly released songs on Last.fm, one of the leading standard search literature, but solely if the proportion of “informed” consumers in
online music social network website (Goldenberg, Oestreicher-Singer, and the market is small and along the least-costly attribute dimension. This implies
Reichman, 2012). The data in our analysis include complete network information that equilibrium prices may, as the unit cost of gathering and processing
of all the 1,000 focal users and music play history of focal users and all of their information decreases, increase in some markets and decrease in others. Further,
social contacts. To test the role of the similarity of preferences, we construct a it implies also that when the cost of quality improvement in a market changes,
novel metric to measure preference similarity between pairs of connected users there can be radical shifts in product attributes.
utilizing popular digital practice called “social tag”. Similarly, we propose a
measure for a user’s ex-ante expectation about the fit between her taste and a
new song. In a series of analyses, we provide compelling empirical evidence that
bear out our contention. Besides enriching the understanding about the nuanced
role of preference similarity in social contagion, we propose seeding strategies
using the proposed metrics to implement viral marketing for an experience good.
82
n SA09 n SA10
Product Choice & Assortment Demand, Choice and Behavior
Chair: Roozbeh Iranikermani, Penn State University, 920 Oakwood Chair: Rudolf-Harri Oberg, Duke University, Durham, NC,
Avenue, State College, PA, 16803, United States, Roozbeh@psu.edu ro39@duke.edu
1 - Product Line Design with Superior Information on Consumers’ 1 - Store, Category, and Brand Choice
Preferences: Implications of Data Aggregation Rudolf-Harri Oberg, Phd Candidate, Duke University, Durham,
Zibin Xu, Shanghai Jiao Tong University, Shanghai, 210010, NC, United States, ro39@duke.edu, Andres I Musalem, Carl F Mela
China, zibinxu@sjtu.edu.cn, Anthony Dukes In many retail settings, understanding consumer demand is the basis for the study
Consumers’ initial perceptions for new products are often noisy indicators of their of firm strategy and public policy. In this paper, we develop a direct utility
intrinsic valuations. If the noises in consumers’ perceptions are correlated, then a framework to model consumer demand for brands, categories, and stores. While
firm can acquire superior information over consumers by collecting aggregate these decisions have been considered separately in the literature, we show that a
marketing research data (e.g. surveys or conjoint studies). But is superior unified treatment of store, category, and brand demand captures novel
information ever unprofitable? Are consumers better off when the firm obtains substitution patterns and provides a much richer picture in many applications. We
superior information? Do they receive better fitting products or simply have more estimate the model on household panel data and show that it can be used to
surplus extracted? In a monopoly model of product line design with imperfectly study in-store marketing and health policy issues. For in-store marketing, we
informed consumers, we find that consumers’ rational suspicions may prevent the identify to what extent supermarkets in our sample engage in loss-leader pricing,
firm from fully exploiting its superior information. In addition, allowing the firm i.e., we identify brands which have the highest incremental effect from other
to collect consumer data may be strictly Pareto improving. stores and low margins. For health policy, we study the effectiveness of various
policy measures (health tax on sugar items, subsidy for healthy goods, food
2 - Heterogeneous Veblen Effects: Implications for stamps) in terms of their impact on nutrition outcomes and consumer welfare.
Assortment Decisions
Rafael Becerril Arreola, USC Darla Moore School of Business, 1014 2 - The Estimation of Discount Factors using Field Experiments
Greene Street, Moore School of Business, Columbia, SC, 29208, Meng Li, Rutgers University, 227 Penn Street, Camden, NJ, 08102,
United States, becerrilrafael@gmail.com United States, meng.li@rutgers.edu, Arun Gopalakrishnan,
Raghuram Iyengar
Veblen effects occur when product prices serve as signals of consumer wealth and
thus influence the utility that products offer to consumers. This study quantifies Determining how far ahead consumers plan their consumption is important for
heterogeneous Veblen effects with a quasi-experimental approach that addresses many marketing applications. Many contexts, however, present limitations in the
identification threats relevant to social influence and supply factors while estimation of discount factors due to insufficient variation in the observed data.
controlling for alternative social processes and the effects of prices on affordability As an example, consider a customer making data usage decisions over a monthly
and perceived quality. Using a four-dimensional panel data on car rentals, the billing cycle. Given the nonlinear pricing of data, usage decisions that the
study explains rental choices in terms of the different levels of relative wealth customer makes early on in the month have implications for her subsequent
signaled by different vehicles at different locations. The individual-level estimates usage during the month. Whether the customer is a light or heavy user of data,
reveal that both wealth signaling and counter-signaling are common among however, can change the extent to which their time discounting preferences can
travelers and that the average product-specific elasticity of choice probability with be recovered from observed decisions. In this paper, we use the context of
respect to signaled wealth is -0.65, about a third as large as the elasticity with cellphone data consumption and combine theory with a carefully designed field
respect to rental fees. A simulation study shows that profits can increase by at experiment to showcase the challenges in identifying the discount factor. The field
least 1% if the rental assortment is optimized to cater heterogeneous preferences experiment manipulates the amount of data available to customers and thereby
for wealth signaling. leads to variation in the state space for subsets of customers whose discounting
parameters would otherwise be poorly recovered. We show that both the utility
3 - Variety Seeking, a Generalized State Dependent Variable Based function and discounting primitives can be empirically estimated for a broader
on Product Attribute Space range of consumers using the field experiment. The estimation helps improve
Roozbeh Iranikermani, PhD Candidate, Penn State University, managerial insights on the willingness of these consumers to pay for data.
920 Oakwood Avenue, State College, PA, 16803, United States,
Roozbeh@psu.edu, Edward Jaenicke
Consumers’ tendency to substitute different types of the same product in their n SA11
baskets or search for ideal bliss point via diversification is generally regarded as
variety-seeking behavior, and researchers most often operationalize this concept Room 606, Alter Hall
by observing product-switching behavior from one purchase occasion to another. Experimental Research: Choice & Information
What all variety-seeking measurement models have in common is that they
operationalize this behavior by observing shopping patterns at the brand level. Contributed Session
Thus, variety seeking is the negation of brand loyalty. In this paper, we propose to
Chair: Siddhartha Sharma, Carnegie Mellon University, Pittsburgh, PA,
generalize the operational concept of variety seeking by focusing on the
differences of among the product attributes that underlie the brand differences. rayhope91@gmail.com
We construct a variety-seeking index that measures variety via relative Euclidian 1 - Prelaunch Demand Estimation
distances in attribute space. Because a brand identifier could therefore be just one
of several product attributes, a more traditional definition of variety seeking based Xinyu Cao, MIT Sloan School of Management, Cambridge, MA,
only on brands would be a special case of this new, more general, variety-seeking United States, xinyucao@mit.edu
index. We use the Nielsen Homescan dataset for the U.S. beer retail market and Demand estimation is important for new-product strategies, but is challenging in
calculate this inex during the years 2009-2012. Our results show that, adding this the absence of actual sales data. We develop a cost-effective method to estimate
index to the brand choice model, enhances more explanatory power to the model the demand of new products based on incentive-aligned choice experiments. Our
and improves estimation and analysis of consumer preferences. Now, it is possible premise is that there exists a structural relationship between manifested demand
to capture brand-loyalty and variety-seeking at the same time in the same and the probability of consumer choice being realized. We illustrate the
household independently. Further, the model can be extended to other situations mechanism using a theory model, in which consumers learn their product
that require similar state-dependent variables. This could facilitate polling by valuation through costly effort and their effort incentive depends on the
political parties, or simplifying risk assessment for insurance companies, banks, realization probability. We run a large-scale field experiment on a mobile game
and lenders. platform, where we randomize the price and realization probability when selling
a new product. The data support our theoretical prediction and the decision effort
mechanism. We then estimate a structural model of consumer choice. The
structural estimates allow us to infer actual demand with reasonable accuracy
using inexpensive choice experiments with small to moderate realization
probabilities.
83

2 - The Effects of Social Relations in Comparative Evaluation
Regimes: An Experimental Study n SA12
Kevin Chung, University of Wisconsin-Madison, 4176 Grainger Room 745, Alter Hall
Hall, 975 University Ave, Madison, WI, 53706, United States,
kevin.chung@wisc.edu, Keehyung Kim, Noah Lim Mobile Marketing I
We model an expert review system where two producers competing for market Contributed Session
share are evaluated by two raters. Employing an economics experiment, the Chair: Lan Liang, University of Colorado Denver, Business School 4110,
paper examines how the rater’s incentive to provide objective feedback can be 1475 Lawrence Street, Denver, CO, 80202, United States,
distorted in the presence of social ties and different penalty structures for
lan.liang@ucdenver.edu
assigning unobjective ratings. The results reject the self-interested model. We find
that raters assign more biased ratings to help the producer they know compete, 1 - Location, Selection and Influence in Mobile Environments
especially when that producer chooses a lower quality level than his competitor. Marcel Goic, Assistant Professor of Marketing, University of Chile,
Moreover, when the monetary penalty for rating unobjectively is lowered, the Beauchef 851, Santiago, 8370439, Chile, mgoic@dii.uchile.cl,
distortion in ratings is exacerbated. Counterintuitively, when both the raters Liye Ma
know the same producer, the likelihood of biased ratings drops significantly. To
explain the empirical regularities, we develop a behavioral economics model and Firms interact with their customers through both direct channels and indirect
show that the rater’s utility function should account not only for social communications via social networks. The key to successful integrated marketing
preferences towards the producer, but also the rater’s psychological aversion communications is the identification of the separate effects of these interactions.
towards favoring a producer more than another rater. Our findings demonstrate The recent rise of mobile marketing adds an additional layer of complexity, as the
that it is critical for policymakers to be cognizant of the non-pecuniary factors that location and context in which customers receive promotions affect their
can influence behavior in expert review systems. responses. In this study, we use a unique dataset from a mobile platform that
sends geo-targeted coupons to customers and allows them to recommend
3 - Charge or Not Charge? A Field Study of E-education Platform offerings to friends, to empirically investigate the effectiveness of location-based
Dajun Li, Phd Candidate, Tsinghua University, SEM School, 30 targeting and social networks in reaching and converting consumers, and to
Shuangqing Road, Beijing, 100084, China, lidajun2005@126.com, decompose the effect of friend’s recommendations in its selection and influence
Yacheng Sun, Fei Li, jiang minghua components. Our results suggest that geo-targeting is effective, but mostly for
shopping oriented locations. We also find significant effect of friend
We study a market for contacts for a one-of-a-kind service (e.g., online and recommendations, which is explained almost entirely by the selection effect..
offline education), where an education platform mediates between the students Moreover, this effect can be enhanced if recommenders are more selective and
(consumers) and teachers(providers). The platform sets fees to balance own have stronger ties with the recipient. These findings provide direct guidance for
revenue with attracting students. The past literature suggests that agents should developing effective mobile targeting strategies.
charge no fee or extremely low fee to the consumer side to attract them as more
as possible. But they ignore the heterogeneity of the consumers, who are divided 2 - How Does Local Market Facilities Drive Mobile
into high and low tiers by WTP(willing to pay). For the high end customers, they Digital Consumption?
are willing to pay a premium membership fee to acquire extra services or Xuebin Cui, Tsinghua University, Room 7503, Building 17 ,
information. On the other hand, low end customers are charged free to stay in Tsinghua University, Beijing, 100084, China,
the market with limited services and information. So that the agent may cuixb.14@sem.tsinghua.edu.cn, Ting Zhu, Yubo Chen
maximize its profits for taking more surplus from high end customers without
hurting low end customers’ benefits. We conduct a field experiment in a real e- With the widespread use of the mobile internet in recent years, mobile digital
education platform to introduce a hybrid pricing strategy: (1) charge a certain consumption becomes an important part of user daily life consumption. Mobile
premium fee to high end customers and no fee to low end customers, and (2) digital consumption is changing the market landscape. It is very important to
charge a certain fee to both customers, and (3) charge no fee to both customers. understand how offline local market facilities affect mobile digital consumption.
We examine customer retention rate, repeated usage and CLV (customer life In this paper, we study whether the mobile digital consumption can be driven by
value) under different pricing policies. the local accessibilities of the infrastructure. Using a unique data of individual-
level mobile APPs adoption and usage behavior across more than 300 cities in
4 - Effect of Sponsored Listings on Online Marketplaces: China, we find that consumers with lower access to retail outlets use more mobile
The Role of Information Asymmetry e-commerce APP while that consumers with lower access to education facilities
Siddhartha Sharma, Carnegie Mellon University, use less mobile education APP. Our findings suggest that in the emerging market
5000 Forbes Avenue, Pittsburgh, PA, 15213, United States, the mobile internet has the potential to mitigate the inequality of accessing the
rayhope91@gmail.com physical infrastructure, such as the access to retail facilities. However, with
technology itself, it is challenging to reduce other aspects of inequality of
Promoting listings in search results has become a common way of advertising for accessing the infrastructure, especially for those requiring additional human
sellers on big e-commerce marketplaces. Although sponsored product listings capital input.
create an additional source of revenue for a marketplace, they might hurt the
core business of the platform due to an increase in the rankings of potentially 3 - A Bivariate Timing Model of User Acquisition and Retention
inferior listings. This effect may be more salient if the marketplace faces of a Mobile Wallet
information asymmetry (IA) regarding the sellers’ or products’ quality. We Lan Liang, University of Colorado Denver, Business School 4110,
develop an analytical model to show that marketplace advertising can lead to a 1475 Lawrence Street, Denver, CO, 80202, United States,
separating equilibrium where low type third-party sellers advertise under no lan.liang@ucdenver.edu, Ty Henderson, Garrett Sonnier
information asymmetry, whereas high type sellers advertise when there is a great
deal of information asymmetry. Under this condition, advertising acts a screening Mobile payment is one of the most interesting development in mobile commerce
mechanism for the platform. We then analyze data from a field experiment with with a 32% CAGR growth rate in terms of market value, yet most mobile
over 2 million users on a marketplace across two popular product categories payment apps suffer from low repeat usage rate, as most mobile apps. Extant
exhibiting different levels of information asymmetry—clothing (high IA) and research in mobile marketing have focused largely on the effectiveness of mobile
electronics (low IA). In this experiment, 4 random groups of users are shown technologies or mobile platforms as targeting and promotional tools, as well as a
sponsored listings (ads) at different sets of positions. The exogenous variation in few limited behavioral outcomes as the circumstances of app downloads and app
both the number and the positions of the ads helps us identify our main effect, opening patterns. However, there has been a lack of systematic investigation on
and the underlying mechanisms. We first find that a 10% points increase in the user acquisition and retention with regards to a mobile app, leaving a wide gap in
proportion of ad slots leads to about 2% decrease in the probability of conversion the literature on mobile marketing. Using a unique dataset that contains
from a search. However, this negative effect exists only for electronics, but not for individual-level actual app usage data from an emerging mobile payment app, we
clothing. Consistent with our theory, this finding is driven by the fact that, in the address both the acquisition and retention processes simultaneously using a
clothing category, the conversion rate of ads is (weakly) higher than the organic bivariate timing model with Gaussian copula, and empirically investigate the
listings they displace, whereas ads in the electronics category convert with a much effects of marketing and operational factors on each of the two processes, as well
lower probability. However, the superior performance of the succeeding organic as the relationship between acquisition and retention. Our results of the analysis
listings compensates most of the lost conversions at the ad slots in electronics- suggest that while an aggressive “onboarding” promotion has a positive effect on
related searches. This happens due to the positive spillover effects of poor quality user acquisition, it does not have any effect on subsequent retention. In addition,
ads. We also find that ads impose a significant negative externality on the organic we find a negative duration dependence on both user acquisition and retention
listings they demote in both the categories. which is adversely compounded by a negative correlation between the two
processes, and we discuss novel managerial insights on the roles of marketing and
operational factors in managing mobile customers.
84
n SA13 4 - To Be Different, Or to Be the Same? The Impact of New National

Brand and Private Label Skus on Retailer Category Performance
Room 746, Alter Hall Kristopher Keller, Assistant Professor, University of North Carolina
at Chapel Hill, 300 Kenan Center Drive, Chapel Hill, NC, 27599,
New Products and Innovation II United States, kristopher_keller@kenan-flagler.unc.edu,
Contributed Session Marnik G. Dekimpe, Inge Geyskens
Chair: Kristopher Keller, Assistant Professor, University of North This paper studies the importance of product uniqueness in new SKUs’ ability to
Carolina at Chapel Hill, 300 Kenan Center Drive, Chapel Hill, NC, grow retailers’ category sales. So far, research has focused on the success of
27599, United States, kristopher_keller@kenan-flagler.unc.edu product lines instead of SKUs, and has abstracted from SKU proliferation of the
existing offerings (Lamey et al. 2014). This stands in stark contrast to the fact that
1 - Backward Compatibility in Product Upgrades: An Empirical “many more of the decisions made by consumers, manufacturers, and retailers
Analysis of the Home Video Game Industry occur at the level of the SKU” (Fader & Hardie 1996). Second, most prior research
Unnati Narang, Doctoral Student, Texas A&M University, 4112 efforts have been directed towards consumers’ perceptions of unique new
TAMU, 4112 TAMU, College Station, TX, 77843, United States, products, but did not provide evidence for their ability to grow retailers’ category
unarang@mays.tamu.edu, Venkatesh Shankar sales, which is what retailers as opposed to national brands (NB) care about.
Third, extant research has made abstraction of the success of new private label
Product upgrades and improved product versions form the cornerstone of new (PL) SKUs, which made sense in a setting of predominantly me-too PLs. Today,
product strategy in several product categories, such as electronics, computer however, more than 35% of innovations are made by retailers rather than
hardware and software, and other hi-tech products. A key decision facing firms brands. Hence, the authors study both NB and PL SKUs. Using household-panel
introducing upgraded products is the inclusion of backward compatibility with the data and rich information on up to 28 product attributes per category (11
previous version(s) of complementary products. On the one hand, the backward attributes on average), the authors construct a nuanced SKU-level measure of
compatibility feature helps retain users. On the other hand, it is expensive and uniqueness and examine the performance implications of >5,000 new SKUs
delays user adoption of newer versions. Some firms offer this feature but others across >150 product categories at the leading Belgian CPG retailers over a 7-year
do not. For example, in the video game console market, Microsoft’s Xbox One period. The authors study 4 research questions: (1) How do more vs. less unique
offers backward compatibility, while Sony’s PS4 does not. While backward new SKUs affect a retailer’s category sales? (2) How do the new SKU’s parent-
compatibility can boost revenues for the newer generation console (e.g., by brand characteristics shape the effect of more vs. less unique SKU additions on
incentivizing gamers with inventory of older generation games to upgrade), it can the retailer’s category sales? (3) How does the competitive structure of the
also potentially cannibalize sales of game titles meant for the newer generation product category shape the effect of more vs. less unique SKU additions on the
console. This paper disentangles these effects and estimates the impact of retailer’s category sales?, and (4) To what extent do the answers to the previous
backward compatibility on the sales of video games and consoles, using data questions differ between NBs and PLs?
relating to Microsoft’s 2015 decision to allow backward compatibility for its newly
launched version of Xbox One. The data for the study come from the largest U.S.
retailer of video games and consoles with over 4,000 stores and an ecommerce
site, including purchases by over 32 million shoppers during a six year period n SA14
(2011-2016). We test and quantify the impact of backward compatibility feature
on the sales of games and consoles of both the older and the newer versions of Room 607, Alter Hall
the console through a difference-in-differences approach using a synthetic control
group. Our research offers managerial insights on the trade-offs associated with
Marketing & Innovation
the provision of backward compatibility feature in product upgrades. Contributed Session
2 - Can Fixed Fee Cure Fraud in Credence Goods Market: Chair: Vijay Ganesh Hariharan, Erasmus University Rotterdam,
Evidence from Singapore’s Taxi Service Rotterdam, Netherlands, hariharan@ese.eur.nl
Wei Miao, National University of Singapore, 15 Kent Ridge Drive, 1 - Estimating the Cost of Privacy in the Adoption of Usage-based
Singapore, Singapore, 119245, Singapore, miao.wei@u.nus.edu, (auto) Insurance using Individual Sensor Data
Junhong Chu, Dai Yao Charles B Weinberg, University of British Columbia, Sauder
In April 2016, Singapore’s largest taxi company introduced a flat fare pricing Business School, Henry Angus Bldg, Rm 669, Vancouver, BC, V6T
option, along with the metered fare option, into its trip booking app. By utilizing 1Z2, Canada, weinberg@sauder.ubc.ca, Miremad Soleymanian,
the detailed trip-level data around this exogenous event, we empirically Ting Zhu
investigate the impact of this new option on the fraudulent behaviors of drivers in
this credence goods market. We find that drivers in flat fare trips drive Usage-Based Insurance (UBI) is a recent auto insurance innovation that enables
significantly shorter distance, in comparison with standard metered trips of the insurance companies to collect individual-level driving data, provide feedback on
same origin and destination, suggesting that introducing flat fare option into driving performance, and offer individually targeted price discounts based on each
credence goods markets might potentially alleviate the overtreatment issues. consumer’s driving behavior. In UBI programs, consumers make trade-offs
However, by utilizing a difference-in-difference framework, we further discover between their concern for privacy and the premium savings gained by allowing
significant and negative spillovers from flat fare trips to non-flat fare trips. In for their driving behaviour to be monitored for up to 26 weeks (in the company
particular, we find that the drivers affected by flat fare options drive significantly we study). Once enrolled, customers can drop out at any time, but receive a lesser
longer distance for non-flat fare trips after the policy change, probably because discount the earlier they do so. Using detailed information on insurance
the affected drivers intend to compensate for the relative income loss caused by premiums, adoption and retention decisions of customers, and individual driving
flat fare orders. We discuss the implications of our findings from the perspectives behavior (as measured by sensor data) for the UBI adopters, we build and
of riders, drivers and social planners in a market for credence goods. estimate a dynamic structural model to examine the effect of privacy concerns on
adoption and retention of UBI policy. Our dynamic structural model allows for
3 - Modeling Diffusion of Ubiquitous Information Technology the observed and unobserved heterogeneity across different group of customers.
Hirokazu Takada, Baruch College/City University of New York, Preliminary results suggest that privacy affects the decision of consumers to adopt
One Bernard Baruch Way BOX B12-240, New York, NY, 10010, UBI, but that privacy costs are heterogeneous across demographic characteristics.
United States, hirokazu.takada@baruch.cuny.edu, Kaichi Saito, Counterfactual analysis after estimating the parameters of our structural model
helps us to examine the effect of different pricing policy on customer responses.
Nobuhiko Terui, Masataka Yamada
We also use a natural experiment caused by a major, widely reported, data breach
IT products with multiple functions, such as smartphones with fast Internet in the retailing industry to examine the effect of changing privacy perception on
connection along with PCs, provide ubiquitous access to the Internet. The UBI usage by considering the UBI customers’ responses before and after the data
comprehensive framework was developed to model diffusion processes of breach event. We find that the data breach is associated with a short-term
accessing to the Internet, and we consider heterogeneity of adopters defined by decrease in weekly retention rates among customers who are currently being
adoption processes, a need for more generalized than the successive substitution monitored.
model, an identification of adoption processes based on sequences of adopting
different technologies, and network externalities. We propose a Norton-Bass
model capable of allowing the switching from the new to the old technology
developed based on the generalized Norton-Bass model. Empirical analysis using
the data of Internet subscriptions via PCs and digital cell phones shows the
significant interactive effects between PC and cell subscription processes, and the
model provides an excellent fit to the data.
85

2 - Manufacturers as Contestants in Sport Championships: 2 - How Do Medias Influence the Switch of Attitudes & Purchase of
An Assessment of Marketing and Innovation Outcomes Customers (e-wom Mainly)
Vijay Ganesh Hariharan, Erasmus University Rotterdam, Room Yufei Zhou, Keio University, Tokyo, Japan,
H15-13, Erasmus School of Economics, Rotterdam, 3062PA, yuhiyuhi0729@gmail.com
Netherlands, hariharan@ese.eur.nl, Yvonne van Everdingen, People used to be only able to ask those who are close enough for them to access
Stefan Stremersch, Stefan Stremersch for advice while gathering information about a purchase. However, in modern
Several manufacturers make substantial investments to set up teams to compete life, internet makes it possible and easy to search for comments and reviews about
in sport championships. However, no systematic analysis of the returns from such the merchandises they are interested in. The study aims at finding that whether
investments exists. In this study, we conceptualize and empirically estimate the people who access websites such as e-WOM sites, blogs, forums and websites like
potential breeding and branding effects from manufacturers’ involvement in twitter, tend to change (or keep) their attitudes to goods and brands and switch
championships. We gather historical data for 30 car brands of 16 manufacturers purchasing more easily (or hardly) than those who do not. In addition, other
over the period 2000-2015 regarding their participation, spending and medias like TV, magazine and homepage where companies put their ads also
performance in Formula One (F1) championships, monthly patent citations, influence switch of attitudes and purchase. Regarding e-WOM as a new media
annual R&D budgets, monthly sales levels, and monthly advertising expenditures. factor and then figuring out a switching model connected to medias is my goal. In
As to the breeding effect, we find that only few manufacturers benefit in terms of this study, I use a unique single-source dataset which contains 3 parts, main data
innovation performance, while most don’t. Manufacturers only achieve better (attitudes and purchase records), advertising data (TV, magazine and radio) and
innovation performance from their F1 involvement if they complement it with website data, answered by a sample of 3000 people, and is collected twice at
high R&D spending. As to the branding effect, although all brands achieve better different time by the largest consulting firm in Japan, Nomura Research Institute,
sales performance from their F1 involvement, brands that spend relatively little Ltd.. With the conclusion obtained, companies can possibly consider a more
on advertising benefit the most. These findings may guide manufacturers in efficient pattern of using medias to attract new customers from their rivals.
budget allocation decisions on sport championships, R&D and advertising. In 3 - Perception and Adoption of Alternative Payment Methods Across
addition, the conceptual framework we offer may guide analysts to assess
Socio-economic Classes – Evidence from Emerging Economy
performance outcomes from manufacturers’ investments in sports
championships. Ashita Aggarwal, Professor of Marketing, SPJIMR, Bhavans
Campus, Mumbai, 400058, India, ashita.aggarwal@spjimr.org,
Ranjan Banerjee, Om Narasimhan, Xiaolin Li
n SA15 Research has stated that the use of a credit card as a payment mechanism
increases the propensity to spend as compared to cash in otherwise identical
Room 603, Alter Hall purchase situations (Feinberg 1986; Hirschman 1979; Prelec and Simester 2001;
Soman 2001), referred to as the credit card premium. Though there is research
CB – Information Processing & Adoption conducted on the effects of credit card usage on consumers’ purchasing behaviour
Contributed Session and perception of product features in marketing literature, less work is done to
understand the adoption of payment methods various consumer demographics on
Chair: Xuefeng Liu, Loyola University Maryland, 4501 N Charles Street, use of different payment methods. Recent research on emerging markets also
Baltimore, MD, 21210, United States, xliu@loyola.edu highlighted the difference in adoption of modern retail across socio-economic
classes in India. (Narayan, Rao and Sudhir, 2015). We extend the literature on
1 - Impact of Friendships Among Customers on their Perceived Value
differences in consumer adoption across socio economic classes by studying
from Consumption differences in the use and adoption of alternative payment systems in the
Prashant Mishra, Professor, Indian Institute of Management emerging markets. Through a unique natural experiment, we are able to assess
Calcutta, D.H.Road, Joka, Kolkata, 700104, India, the impact of alternative payment methods on revenues of two retailing modes-
prashant@iimcal.ac.in, Diptiman Banerji, Ramendra Singh, home delivery and in store retailing for a restaurant in India. In an
Rebecca G. Adams, Rajiv Kumar unprecedented government action, high value currency denominations were
suddenly withdrawn, leading to cash scarcity and income impact, which differed
Value creation is a key task for marketers. Researchers suggest that value is across socio economic classes. A unique real data set allows us to study impact of
created by customers in their usage experiences—a notion of value referred to as scarcity on consumption habits and differences in approach to alternate payment
“value-in-use” or “customer perceived value” (CPV)—and each interaction at a methods across socio economic classes across delivery formats. We use a
touchpoint influences such value creation. Our study investigates the effect of difference in difference approach to understand the difference across socio
consumer friendships on CPV in the context of joint consumption. We economic classes and delivery formats. We extend generalizability of the findings
hypothesize that the presence of a friend increases the CPV from a joint by conducting a related laboratory experiment to address generalizability
consumption experience (assuming a positive interaction). We suggest that an concerns. Our study contributes to the literature exploring understanding of
increase in positive affect (PA) and thought confidence (TC) levels mediate this adoption formats across economic classes in emerging markets. The results of the
relationship. We also argue that the change in CPV leads to a corresponding study would help marketers understand the adoption of alternate payment
change in re-patronage intention (RPI). We further posit that mental intangibility methods across socio economic classes and hence help in pricing and payment
(MI) acts as a moderating variable for the path from PA to CPV and from TC to method decisions.
CPV. We test our hypotheses over three experimental studies. The first two are 2
X 2 experiments consisting of two conditions (friendship: alone and with friend) 4 - The Interactive Impact of Headline and Body Copy on
X two service situations (MI: low and high) and a positive interaction is primed. Ad Effectiveness
In both these studies, we get support for the mediating effect of PA and TC (with Xuefeng Liu, Assistant Professor, Loyola University Maryland,
the latter being stronger), and the moderating effect of MI. Our third experiment 4501 N Charles Street, Baltimore, MD, 21210, United States,
(a simple two-way experiment, with no manipulation of MI) tests a potential
xliu@loyola.edu, Jason Zhang, Jibo He
boundary condition of the hypothesized friend’s influence when there is a
lowering of PA. We find that consistent with the lowering of PA, CPV significantly In both online and offline settings, it is common for an ad to include a headline
reduces in the presence of a friend as compared to the alone condition.Overall, and body copy. The headline presents a positioning claim that highlights key
we get empirical support that the presence of a friend affects CPV, and this change selling points, whereas the body copy presents additional information. In
is mediated by PA and TC, with TC emerging as a stronger mediator. Our examining the impact of the ad, prior research treats the effect of ad headline and
experiments also support the notion of MI as a moderator. Further, we show that body copy as additive. This research, however, shows the effect of headline and
the presence of a friend influences RPI as well. We also study the boundary body copy as interactive, in that the different positioning strategies of a headline
conditions of the impact of friendship, and the results strengthen our conclusions. (e.g., focus on specific attributes vs. abstract benefits) would bias how consumers
In all, over three experimental studies, we find considerable support for our process the information in the body copy and thus their product attitudes.
hypotheses. Our findings are significant from both a theoretical and a managerial Following the hypothesis-testing theory (Deighton 1984), we propose that
perspective. consumers view positioning claims in ad headlines as tentative hypotheses and
use the information in the accompanying body copy to test these hypotheses.
Consistent with this perspective, we predict that relative to abstract
positioning headlines, attribute-specific headlines lead to more (less) favorable
product attitudes when data from the body copy confirm (do not confirm)
positioning claims. Several lab experiments support these predictions, including
an eye-tracking study offering evidence on the proposed processes. Our research
extends the hypothesis-testing theory by demonstrating that tentative hypotheses
can be formed and tested within an ad (vs. tested with information outside the
ad, as in the original theory). Additionally, we show that headlines influence
consumers’ processing of body copy, a mechanism largely ignored by previous
research—offering practical guidelines for the development of effective headlines
and body copy.
86
INFORMS MARKETING SCIENCE – 2018 SB01
n SA16 Saturday, 10:30AM - 12:00PM

Trend Analysis
Contributed Session n SB01
Chair: Christian Hughes, University of Pittsburgh, 7040 McClure Ave, Room 32, Alter Hall
Swissvale, PA, 15218, United States, cah185@pitt.edu Online Platforms and e-Commerce
1 - Predicting Customer Gender Based on Network General Session
Behavioral Trends
Kyler Hart, Western Kentucky University, 220 College Heights Chair: Puneet Manchanda, University of Michigan, Ann Arbor, MI,
Blvd, Bowling Green, KY, 42101, United States, 48109-1234, United States, pmanchan@umich.edu
kyler.hart206@topper.wku.edu, Everett Taylor Co-Chair: Junhong Chu, National University of Singapore, Singapore,
Mobile phone network marketers are responsible for segmenting customers based 119245, Singapore, bizcj@nus.edu.sg
on behavioral patterns associated with mobile phone usage. These segments offer Co-Chair: Xu Zhang, University of Michigan, Ann Arbor, MI, 48109,
a diverse range of customer profiles, and provide information regarding
United States, xuzh@umich.edu
professional and residential use, contractual data, and various network activity
trends. By developing a regression model, marketers can predict with a certain 1 - B2B bargaining on a B2C Health Platform Market: Bringing
accuracy the gender (Male or Female) of a given customer based on the Hospitals and Patients Together
behavioral data they have collected. This research used logistic regression Xu Zhang, University of Michigan, Ann Arbor, MI, United States,
techniques within the analytical software RapidMiner to estimate a model for xuzh@umich.edu, Junhong Chu, Puneet Manchanda
telecom segmentation data, retrieved from the book Effective CRM Using
Predictive Analytics. The research findings indicated that the gender of telecom We study the bargaining between a business-to-consumer platform and the
customers could be predicted with a certain degree of accuracy using logistic business-side of the platform. This platform connects hospitals with patients who
regression. With this method, marketing campaigns can more accurately assess seek health checkups. As a business entity, the platform negotiates with hospitals
the gender of potential clients and utilize this information in the implementation on the depth of price discount, method of payment (online or offline), and
of advertising techniques. method of clearing (per transaction or monthly). We investigate the relative
bargaining power between the platform and hospitals, and how the bargaining
2 - Advertising Agency Compensation Trends power of the platform changes as more individual patients join the platform and
Sharon Horsky, Hebrew University of Jerusalem, more reputable hospitals are contracted. We find that the quality and ownership
School of Business Administration, Jerusalem, Israel, (public vs. private) of the hospitals are important determinants of bargaining
sharon.horsky@huji.ac.il power; the cross-network effect from the consumer-side to the business-side
increases the bargaining power of the platform; and the participation of more
A crucial element in the relationship between the firm and its advertising agency reputable hospitals also helps increase the bargaining power of the platform with
is the design of an effective compensation plan for the advertising agency which less reputable hospitals.
aligns the incentives given to the agency with the overall objectives of the
advertiser. With the increasing complexity in the media landscape we show that 2 - How Does a Firm Learn in a Changing World? The Case of
advertisers are changing their ad agency connections. In this paper we show Prosper Marketplace
changes in the type of agents chosen, the number of agencies used, and the way Xinlong Li, University of Toronto, 105 St George Street, Toronto,
they are compensated. We also investigate trends in digital agency compensation ON, M5S 3E6, Canada, Xinlong.Li13@Rotman.Utoronto.Ca,
given the rapid growth in the use of digital advertising. We compare whether the Andrew Ching
methods and trends in digital agency compensation are different from those in
the “traditional” media. Most marketing and economic research assumes that the fundamentals of the
population being studied do not change frequently over time. However, if this
3 - Setting Sequential Group Norms: How the First Follower assumption fails, and a firm applies the model based on the old data, it may make
Determines the Trend suboptimal decisions. This problem is referred to as concept drift in machine
Christian Hughes, PhD Student, University of Pittsburgh, learning. In the case of Prosper, a leading peer-to-peer (P2P) lending platform,
255 Mervis Hall, Roberto Clemente Drive, Pittsburgh, PA, 15260, concept drift is likely important because the fundamentals of borrowers and
United States, c.hughes@pitt.edu, Jeff Inman lenders tend to change with the economic environment over time. We study how
Prosper makes use of the past data to learn about the riskiness of new loan
This paper examines the influential decision maker in determining group norms applications, and the preferences of borrowers and lenders. To achieve this goal,
in a sequential choice setting. We propose that the decision-maker that is most we develop a structural model where Prosper categorizes loans based on their
influential in whether the group will seek variety or uniformity is the second riskiness (and hence sets the interest rate) to maximize the expected revenue.
decision maker, referred to as the first follower. While the leader has the power to Prosper takes into account how the interest rate would affect the demand and
make the first decision, it isn’t until that behavior is emulated that a social norm supply for loans on its platform, and the truthfulness of the risk categorization
is enacted. The norm of the group will be formed around the behavior and the (which could affect Prosper’s reputation). We investigate a range of machine
leader-first follower dyad. Unless the first follower moves in solidarity with the learning methods which could be employed by Prosper, and find evidence that
leader, a movement cannot gain traction. Similarly, a first follower can signal that Prosper adopts a method which discounts the data older than six months very
it is acceptable for the remainder of the group to differ in opinion from the leader. heavily. Although this approach outperforms those using all the past data, it is not
This paper shows how group norms are determined in a sequential choice setting. the optimal way to use the data. In our counterfactual experiments, we show that
When people in groups make decisions sequentially, they are conforming to (i) pooling data from similar economic environment can increase revenue by
group norms as they develop. Research has shown that people tend to seek about 8%; (ii) using an ensemble method can increase revenue by 10.26%.
variety when ordering in a group setting (Ariely and Levav 2000). We show that
the group norm is determined by the behavior of the second person relative to 3 - Hybrid E-commerce Platform: When an Online Retailer Offers
the first - the first follower. In the first study, we show that people will either Own Delivery Service
choose uniformity or variety depending on whether the first follower mimics or Banggang Wu, Tsinghua Universit, Room 224,
makes a different choice than the group leader. When the first follower chooses Shunde Building, Tsinghua Universit, Beijing, 100084, China,
uniformly to the leader, the rest of the group will seek uniformity. When the first wubg.12@sem.tsinghua.edu.cn, Yubo Chen, Prasad Naik
follower chooses variety from the leader, the rest of the group will seek variety. In
the second study, we extend this phenomenon to online reviews using Yelp data The imbalanced development of logistics and payment makes it difficult for an
and computational linguistics. We will demonstrate that the same pattern of a first online retailer to reduce the uncertainty of online shopping in emerging markets.
follower determining the group norm applies to review valence. In response, some online retailers establish a hybrid e-commerce platform in the
hope to reduce online shopping uncertainty, and thus to establish customers’ trust
in the platform and increase their purchases. Based on two natural experiments
arising from JD.com’s initiative of establishing its own delivery service, we
examine how the setup of a hybrid e-commerce platform influenced customers’
shopping behaviors between 2009 and 2013. We find that the founding of a
hybrid e-commerce platform led customers to increase purchases by 7 to 10
percent at city level. In addition, we find that the sales boosting effect is greater
for (1) cities with less mature shipping service, (2) light-buyers, (3) categories
with higher uncertainty, and (4) products with less discounts. The results are
consistent with the interpretation that the establishment of a hybrid e-commerce
platform improves shoppers’ trust in the online retailer. Thus, a hybrid platform
does more than to speed up the delivery, but more importantly, it helps to build
customer trust in the business.
87
SB02 INFORMS MARKETING SCIENCE – 2018

4 - Up-lending and Down-lending: The Signaling Effects of containing a link to an upgrade website. A regular product purchaser either
Loan Requests accepts or rejects the upgrade offer after clicking the link and observing the
Ruikai Zhou, Chinese University of Hong Kong, 12 Chak Cheung upgrade fee (price) dynamically determined by the firm. The upgrade is time
limited. When the upgrade process is not profitable, the firm can stop it by
Street, Cheng Yu Tung Building, NT Hong Kong, Hong Kong,
deactivating the upgrade links. Formulating the firm’s revenue maximization
zhouruikai@baf.cuhk.edu.hk, Mantian Hu, Yuxin Chen problem as a dynamic program, we show that the optimal upgrade policy is of a
Microloan lenders are often flexible in fulfilling the borrowers’ loan request. pulsing type. The firm either maintains zero or the maximum number of active
Besides lending as requested, they can also lend more money to applicants than links. Both the optimal number of active links and the optimal upgrade fee are
requested (up-lending) or less than requested (down-lending). Previous literature monotone with respect to the leftover capacities. Finally, through a systematic
on loan default behavior does not consider such flexibility in loan contract design, numerical study, we quantify the revenue improvement from industry standard
assuming the sizes of the initiated loans to be exactly the same as requested. We check-in fixed-price upgrades to dynamic pricing and timing of upgrades. We also
obtain a dataset from an online microloan lending company. In the data, initial identify the market environment, in which the revenue improvement is
loan requests and final loan decisions can be separately observed. This facilitates significant across various models.
us to separate signaling effect of requested loan size from liquidity constraint
effect of final loan size on default risk. Given that loan request can be a signal of
4 - Temporal Distance and Price Elasticity: Empirical Investigation of
the applicants’ hidden status of loan repayment ability, we develop a theoretical the Cruise Industry
model to analyze how firm should optimize lending flexibility in contract design. Mingyu Joo, The Ohio State University, 2100 Neil Ave., Columbus,
We show in our model that up-lending helps extract profit from those safe OH, 43210, United States, joo.85@osu.edu, Kenneth Wilbur,
borrowers signaled by their conservative loan requests, while down-lending Dinesh Gauri
controls the exposed risk required to maintain a separating equilibrium of the
The conventional view of advance-sales industries is that aggregate demand
loan request signal.
becomes less price-elastic as the advance sales period proceeds. This view has
substantial empirical support but is based on analyses of data from a single
industry: air travel. We explore how the response of demand to price changes
n SB02 with temporal distance in a large, proprietary dataset of Florida cruise prices,
bookings, product attributes and advertising. We offer the first evidence that,
Room 33, Alter Hall unlike the airline-based conventional wisdom, cruise demand becomes more
sensitive to price during the advance sales period. The pattern is large enough to
Dynamic Pricing and Revenue Management: appear in data visualizations and replicates across models, parameterizations and
Advance-selling Market partitions of the data.
General Session
Chair: Mingyu Joo, The Ohio State University, Columbus, OH, 43210,
United States, joo.85@osu.edu n SB03
Co-Chair: Robert E Sanders, The University of Chicago, Chicago, IL, Room 34, Alter Hall
United States, robs@uchicago.edu Game Theory in Marketing: Competing Through
1 - Season Ticket Buyer Behavior and Secondary Market Options Cutting-Edge Marketing Practices
Yanwen Wang, University of Colorado Boulder, Leeds School of
General Session
Business, 995 Regent Drive, Boulder, CO, 80309, United States,
yanwen.wang@sauder.ubc.ca, Michael Lewis, Chunhua Wu Chair: James M. Lattin, Stanford University, Stanford, CA, 94305-7298,
Sports franchises derive significant portions of their revenues from season ticket
United States, jlattin@stanford.edu
holders who pre-purchase tickets with large price discounts but significant 1 - The Charm of Behavior-based Pricing: When Both Firms and
uncertainty of game quality. A recent trend that may have meaningful Consumers Base Their Decisions on Purchase History
consequences for season ticket management is the development of legitimate Wilfred Amaldoss, Duke University, Durham, NC, United States,
secondary markets. This research investigates the value of secondary markets to wilfred.amaldoss@duke.edu, Chuan He
season ticket holders. We find that, on one hand, secondary markets provide an
option value to list tickets to resell in addition to attendance and forgoing. On the Technology is making it easier for firms to track consumers’ purchase history and
other hand, the secondary markets may attract listing, push down resale prices, leverage the information in setting prices. The extant literature on behavior-based
and make the resale option unattractive. We assemble a unique panel data that pricing (BBP), however, casts doubt on the value of consumers’ purchase history.
combines season and single ticket purchase records with ticket usage records on It shows that BBP hurts firms’ profits under general conditions. Yet, in practice we
attend, forgo, list, and resale. We build a structural model of ticket purchase and see firms widely using BBP. Moreover, prior literature on BBP has neglected the
usage. Our policy experiments suggest that overall secondary markets increase empirical evidence that consumers care about not only the consumption utility
season ticket purchase rates by 5.97%, equivalent to $2,633,394 revenue increase derived from a product but also the gain-loss utility in comparison to the
over 6 years. The impacts of secondary markets are most pronounced for lower reference product. This paper explores the practice of BBP in a horizontally
quality seat tickets. differentiated market where consumer taste is diverse and consumer utility is
reference dependent. Our analysis shows that when consumer valuation is low,
2 - Selling Mechanisms for Perishable Goods: An Empirical Analysis BBP can improve firms’ profits even in the absence of reference dependence.
of an Online Resale Market for Event Tickets When consumer utility is reference dependent, firms can benefit from BBP even if
Caio Waisman, Stanford University, 579 Serra Mall, Stanford, CA, consumer valuation is high Moreover, this result is robust to how consumers form
94305, United States, cwaisman@stanford.edu the reference price, whether they anchor on the current period price or the
historical price of the reference product.
Which selling mechanisms should sellers use to sell their goods? Even though this
is one of the most fundamental decisions a seller can make, there is little 2 - Competitive Information Revelation
empirical research on mechanism choice. This paper takes a step in this direction Ganesh Iyer, University of California-Berkeley, Berkeley, CA,
by analyzing the choice between auctions and posted prices in the context of a United States, giyer@haas.berkeley.edu, Shubhranshu Singh
scarce perishable good: National Football League (NFL) tickets. Using data from
eBay, this study estimates a structural model in which heterogeneous, forward- Firms may have information about own and rival’s products that is not known to
looking sellers optimally choose which selling mechanism they use. consumers. This information, if disclosed to the consumers, may change their
Counterfactual results suggest that sellers would experience an average 11.45% product evaluations. We investigate competing firms’ incentives to disclose such
increase in expected revenues if auctions were removed and an almost 26% an information, which may be positive or negative. We refer to the firms’ strategy
decrease if posted prices were. In turn, consumers would be unambiguously of disclosing own positive information as positive communication and disclosing
harmed if the platform specialized in either mechanism. These results can be rival’s negative information as negative communication. Consumers make
useful not only in the context of perishable goods but also to improve general inferences about the information that is not disclosed and update their product
platform design. evaluations. We show the consumers’ inference, about the information that is not
disclosed, becomes more favorable if firms engage in more negative
3 - Dynamic Pricing and Timing of Upgrades communication. This is because consumers believe firms are more likely to be
Xiao Zhang, UT Dallas, 800 W. Campbell Rd. SM 30, uninformed when they expect firms to engage in more negative communication
Richardson, TX, 75080, United States, xiao.zhang@utdallas.edu, but firms remain silent. The implication is that if firms are more likely to be
Metin Cakanyildirim, Ozalp Ozer informed they become more likely to engage in negative communication. We also
find that firms engage in negative communication only when the consumers’
Upgrading is a travel industry practice used to mitigate supply-demand outside option is sufficiently small. Engaging in negative communication, if
mismatches among products of different quality levels. Such upgrades are usually consumers’ outside option is large, results in consumers mainly switching to
implemented either at the booking time or at the check-in time. In this paper, we outside option instead of to the firm that engages in negative communication.
consider dynamically-offered upgrades between the booking and the check-in
times by a firm that sells two types of products (premium and regular). The firm
decides on the timing and quantity of upgrades. Customers who purchased the
regular product may be offered upgrades via notifications (e.g., marketing emails)
88

3 - Coalition Loyalty Program Not Working? Maybe You’re Doing weakens as the focal firm’s board-interlock network constraint increases. These
It Wrong results appear to be robust to alternative explanations. Hence, the results suggest
Pedro Gardete, Stanford University, 655 Knight Way, Stanford, CA, that board members and their social networks significantly influence marketing
department power in firms. Therefore, if marketing wants to gain a seat at the
94305, United States, gardete@stanford.edu, James Lattin
strategy table, it must first get the board on board.
While the institutional features of coalition loyalty programs are relatively well
established, the profitability conditions are often subtle and not well-known. This 4 - Engaging Prospective Influencers – An Alternative Approach to
paper considers a setting in which each of two competing firms may form a Influencer Marketing in User-Generated Content Networks
coalition loyalty program with one of two firms in a different market. Firms in the Andreas Lanz, University of Mannheim, C8, 20, Mannheim,
same program jointly set the reward to be awarded to consumers who buy from 68159, Germany, lanz@bwl.uni-mannheim.de, Jacob Goldenberg,
both coalition partners, but they set their own prices independently. We find that Jacob Goldenberg, Daniel Shapira, Florian Stahl
these programs are profitable for all firms, even when no value is created by the
mere existence of rewards (i.e., when firms and consumers value $1 worth of Influencer marketing has become an important tool in various online marketing
rewards equally). The intuition is that joint loyalty programs allow each member activities. However, not every firm can engage in effective influencer marketing,
to leverage its partner’s market power and charge higher prices. We then explain because of too high monetary compensations or existing contractual agreements
that this result crucially depends on the sequence in which prices and rewards are of influencers. We suggest a different approach: a firm can reach out to
decided, which we allow coalitions to decide endogenously. We find that firms are prospective influencers (based on predictions) and make agreements for future
better off setting prices before rewards, but are worse off otherwise. Setting prices endorsements (while they are still unknown). Considering that only few
before rewards prevents coalition members from trying to steal market share by individuals ultimately become influencers, this requires solving an occurring
decreasing prices unilaterally; firms gain commitment power in prices because economic trade-off to decide on how many as well as which individuals to select
any effort to take advantage of rewards will be matched by lower reward levels. and engage. Our framework allows evaluating influencer marketing decisions on
We further investigate cases with asymmetric competition and find that weaker a risk-return spectrum using the efficient frontier, which we empirically test and
firms are coveted partners in coalition loyalty programs, and we discuss the illustrate on SoundCloud data using a wide range of prediction models.
managerial implications of our findings.
n SB05
n SB04 Room 232, Alter Hall
Room 35, Alter Hall Mobile, Algorithm, and Artificial Intelligence (AI)
Digital Transformation of the Marketing Paradigm Session VII: Mobile Usage and Customer Welfare
General Session General Session
Chair: Andreas Lanz, University of Mannheim, C8, 20, Mannheim, Chair: Xueming Luo, Temple University, Philadelphia, PA, 19122,
68159, Germany, lanz@bwl.uni-mannheim.de United States, luoxm@temple.edu
1 - Putting Brands in Context Co-Chair: Yuchi Zhang, Temple University, Philadelphia, PA, 19122,
Verena Schoenmueller, Columbia University, 930 St Nicholas United States, yuchizhang@gmail.com
Avenue, Apartment 6, New York, NY, 10032, United States,
1 - Do Spoilers Spoil? An Empirical Study of Movie Reviews using
vs2542@columbia.edu, Oded Netzer, Florian Stahl
Topic Modeling
One of the most useful bases for market segmentation is preferences-based Jun Hyun (Joseph) Ryoo, jryoo.phd@ivey.ca
segmentation. However, one of the difficulties in segmenting consumers based on
their preferences has been the limited information regarding consumers’ brand Most movie review sites allow users to post spoilers, which reveal a certain level
preferences especially across product categories. Social media platforms such as of movie plots. Conventional wisdom suggests that giving away the plot is likely
Facebook and Twitter provide readily available insights regarding the brand to reduce the enjoyment of movie consumption of potential moviegoers and
preferences of millions of consumers in the form of brand likes and followerships. therefore hurts the box office revenue. However, spoilers might also signal the
Building on a large Twitter dataset incorporating information regarding brand credibility of review contents and therefore enhance the informative or
followerships across more than 100M followers of more than 600 brands this persuasive effects of online word-of-mouth (WOM). In this paper, we investigate
paper aims to derive “consumer brand personas”, i.e., consumer segments based the effect of spoilers on aggregate box office sales based on a dataset of movies
on their brand affinity across product categories. To derive these latent released in the United States from 2013 to 2015. We employ a correlated topic
dimensions of consumer preferences, we build on matrix factorization techniques modeling method to extract and quantify the plot element of all spoiler reviews
that allow us to handle large amount of sparse data and let us uncover different on IMDb.com. We find that the amount of spoiler information has a net positive
latent brand personas based on the brands a Twitter user follows. effect on box office revenue. This positive effect is more pronounced for lower
rated movies, the users’ consumption of which tend to rely more on movie
2 - The Role of Incentivized Reviews: a Dynamic Perspective reviews. We also find a positive interaction effect between the level of plot-related
Cindy Zhao, University of Maryland, College Park, MD, 20742, contents in spoilers and review volume. These patterns are consistent with the
United States, xindizhao@rhsmith.umd.edu, Michael Trusov credibility-enhancement effect of spoilers. Furthermore, controlling for the pre-
consumption spoilers, we find that the plot-related information in
Incentivized campaigns have become an effective and efficient way to stimulate post-consumption spoilers also leads to more theatrical visits, suggesting that the
electronic word-of mouth (eWOM) in terms of both volume and valence. consumption of movies and spoiler reviews partake in a complementary rather
However, it also has the potential to negatively affect eWOM in the long run. In than a substitutive relationship.
this paper, we investigate the impact of incentivized reviews on subsequent
reviewing behavior. We empirically model the dynamic effect of incentivized 2 - User Contribution and its Social-Welfare Value in a Mobile App for
reviews using Amazon.com review data collected across multiple product Real-Time Traffic Information Around Urban Areas
categories. Our results show that after the incentivized review enters the system, Chenhui Guo, Michigan State University, 632 Bogue Street, Room
ratings of subsequent organic reviews first decrease but then recover over time. N260, East Lansing, MI, 48824, United States, guochen8@msu.edu
The temporary decline in ratings is significant after we capture the time and order
trend as well as other factors known to influence product ratings. We employ We investigate the effectiveness of mobile user contribution with a GPS
natural language processing techniques to investigate how the composition of navigation app, Waze. Waze app users contribute by generating real-time traffic
subsequent reviews changes due to the incentive disclosure. content: primary contribution by posting alerts as well as additional contribution,
feedback by commenting and confirmation by putting thumbs-up on the alerts.
3 - Board Interlock Networks and Marketing Department Power Our findings from a spatial data approach explain how user contribution mitigates
Peter Ebbes, HEC Paris, Paris, France, ebbes@hec.fr, traffic congestion around New York City: reductions of the number, duration, and
Frank Germann, Raj Grewal length of traffic jams. Regarding the primary contribution, while the first alerts—if
at least a single alert is initially posted around traffic jams—are effective in
It is now well established that marketing department power in firms is important mitigating traffic jams, follow-up alerts added over time—a high degree of the
for firm outcomes including firm performance. Surprisingly, however, marketing number of total alerts—are not. This implies that not the amount of total alerts
department power in many firms is low, and some research even suggests that it but a few initial alerts may improve driving conditions: while the few initial alerts
is decreasing. Seeking to address this apparent disconnect, the authors propose generate new and useful information, the follow-up alerts do not add meaningful
that the board of directors is a critical but neglected driver of marketing content due to information redundancy and overload. Additionally, increased
department power in firms. In particular, they examine how directors’ marketing comments (feedback) and thumbs-up (confirmation) both reduce the number of
exposure through board service at other firms affects marketing department traffic jams whereas they have different effects on the duration and length of
power in focal firms. Considering a large sample spanning the 2006 - 2013 period, traffic jams. Confirmation reduces the duration and length of traffic jams whereas
they find that marketing department power in board-interlocked firms feedback does not. This shows that the effectiveness of user contribution is
significantly and positively drives marketing department power in focal firms. differentiated by the different aspects of traffic congestion: its numeric volume,
Moreover, consistent with an information sharing interpretation, the magnitude temporal duration, and spatial length. We discuss the effectiveness of mobile user
of this effect varies based on the focal firm’s board-interlock network position, contribution, crowdsourced by Waze app users, and practical implications on its
where it strengthens as the focal firm’s boardinterlock centrality increases, but value for public welfare with the driving quality around urban areas.
89

3 - Your Movement in the City Tells Your Credit: Credit Default organized and unorganized and show that when consumers value product
Prediction Based on the Geosimilarity availability, its quality assurance and the uniqueness associated with an LE
Jialu Liu, Chinese University of Hong Kong, 12 Chak Cheung product, firms benefit by the presence of organized vs. unorganized secondary
market. Our results help in evaluating the overall consumer welfare implications
Street, Cheng Yu Tung Building, Shatin NT, Hong Kong,
of regulating secondary markets and marketplace players in the luxury products,
liujialu@link.cuhk.edu.hk collectibles or antiques segment.
Do the people with a high credit default risk visit different locations in the city
from where the people with a low credit default risk visit? Based on the
4 - Consumer Resistance
consumer-location and loan-repayment data from a leading FinTech company, we Daniel Halbheer, HEC Paris, Department of Marketing,
empirically found that the geosimilarity, which is defined as “the similarity of 1 rue de la Libération, Jouy-en-Josas, 78351, France,
instances of consumers based on the distribution of the locations they have been halbheer@hec.fr, Marco Bertini, Stefan Buehler
observed to visit” (Provost et al., 2015) can be a critical classifier of the credit This paper studies the effects of consumer resistance on optimal pricing and cost
default prediction. Two consumers are defined as geosimilarity network (GSN) communication. Assuming that consumer resistance is generated by deviations
neighbors to each other if they share at least one visited location during a specific from a psychological reference point, we show that it reduces the pricing power
period. Our analysis shows that the GSN neighbors of a person who defaulted on and profit of a firm. We also show that consumer resistance provides an incentive
a loan are around three times more likely to default compared to the average for a firm to engage in cost communication when consumers underestimate cost.
default rate and around six times more likely to default compared to GSN While cheap communication does not affect consumer behavior, persuasive
neighbors of a person without a default. communication may increase sales and profit. Finally, we show that a firm can
4 - The Vicious Cycle of Responding to Negative Comments on benefit from engaging in organizational transparency by revealing information
Social Media Brand Pages: A Nature Experiment with Facebook about relevant features of the production process.
Policy Change 3 - Preventative Devices and Self-control
Yuchi Zhang, Santa Clara University, Santa Clara, CA, Raghunath S. Rao, University of Texas-Austin, B6700
United States, yuchizhang@gmail.com 1 University Station, Austin, TX, 78712, United States,
In the offline world, firms often benefit from responding to consumer complaints. raghunath.rao@mccombs.utexas.edu, Julie Irwin, Zhuping Liu
However, the impact of responding to negative comments on social media in the Excessive consumption of many vice goods (e.g., alcohol) has both possible
online environment is unclear. Direct responses from the firm may address the immediate (e.g., a drunk-driving crash) and delayed (e.g., liver disease) negative
negative experience and reduce similar complaints on social media brand pages. consequences. The present research models the consumption choices of a
However, such responses are observable to fans of the brand on social media and consumer population with heterogeneous impatience and varying degrees of
thus may also fuel fans to imitate and voice their own complaints. The authors sophistication in conjunction with both immediate and delayed consequences of
explore this impact by analyzing the exogenous variations of a Facebook policy excessive vice good consumption. We show that even when a preventative device
that allowed firms and users to directly respond to negative comments posted on (e.g., a designated driver) that could completely eliminate the immediate dangers
brand pages. Results suggest that after the Facebook’s policy change, company is available for (almost) free, some consumers forgo it in order to try to use the
responses to negative comments on social media brand pages actually increase the immediate danger as a soft tool to regulate excessive consumption (e.g., “If I
volume of negative posts and intensify the negative tone across the Airlines, know I don’t have a designated driver, then I won’t drink too much.”).
Automotive, and Hotel industries. Such vicious cycle effects manifest through a Surprisingly, this “flying without a net” is a successful strategy for some
“social” mechanism. That is, the effects of company responses on negative posts consumers, and we quantify when it is likely to be successful versus harmful. We
are stronger for firms with more fans following the brand and liking negative also demonstrate that the policies that make the provision of preventative devices
posts. The vicious cycle also exists due to an “economic” mechanism, where such compulsory could increase consumer welfare under certain conditions but are not
adverse impact becomes more severe when firms offer financial compensations in Pareto-improving. On the other hand, the policies that exaggerate the likelihood
the response content on Facebook brand pages. These findings caution managers of immediate dangers are unambiguously welfare decreasing. In one extension of
against traditional complaint handling practices in the new era of social media the paper, we endogenize the price of a preventative device for a monopolist
branding. seller and show that it is non-monotonic in the probability of short-term danger.
Another extension of our model shows that if consumers follow a personal
strategy of being pessimistic to overcome the self-regulation problems associated
n SB06 with overconfidence, doing so might result in a “boomerang effect” for some
consumers who end up over-consuming because of the use of a preventative
Room 234, Alter Hall device.
Behavioral Industrial Organization

Contributed Session n SB07
Chair: Prakash Awasthy, Indian Institute of Management-Bangalore,
N313 Hostels Block, Bangalore, na, India, prakash.awasthy@gmail.com
1 - Multivariate Analysis of Consumer Preference Structures Across Social Platforms & Consumers
Multiple Categories Contributed Session
Sri Devi Duvvuri, Assistant Professor, University of Washington,
Chair: Mengxia Zhang, ACC 306, 3660 Trousdale Parkway, Los
219 Beardslee, University of Washington, Bothell, WA, 98011,
Angeles, CA, 90007, United States, zmxmdzmxmd@gmail.com
United States, duvvuris@uw.edu
1 - Social TV and Ad Avoidance
That consumers’ purchase behavior varies across categories is being documented Alexander Bleier, Boston College, 140 Commonwealth Avenue,
actively by the marketing science community. The variation in such behavior can
be attributed to the heterogeneity in consumer preferences across categories as
Fulton Hall 448, Chestnut Hill, MA, 02467, United States,
well as the nature of categories (e.g., perishable goods). In this research, we bleiera@bc.edu, Beth Fossen
implement a multivariate tobit model specification that helps deduce how the With television advertising, a more than $70 billion industry, increasingly moving
nature of a category influences a consumer’s preference structure not only for towards a programmatic ad-buying model, being able to measure and explain
that category but across multiple categories. We use scanner panel data across real-time changes in viewership during individual advertisements, or ad
multiple categories to calibrate the model. Over and above critically evaluating avoidance, is becoming increasingly important. In this research, we explore how
the results from this model, we derive marketing metrics using customer survey social TV, i.e., the joint viewing of television programming alongside the
data from the same panel of customers to derive marketing metrics. We then production or consumption of social media conversations about the
deduce the (i) effectiveness of a retailer’s pricing and promotional policies, and (ii) programming, can be used to gain a better understanding of these dynamics in
suggest directions for improving customer relationship management. Given the viewership. Based on a multisource dataset of over 8,000 ad instances for more
complex nature of the modeling approach, we use Hierarchical Bayesian methods than 200 brands aired in over 80 programs, corresponding twitter mentions of the
(MCMC) to obtain model parameters. ads and surrounding programs as well as second-level ratings data, we estimate a
hierarchical Bayesian model to capture the drivers of ratings changes over the
2 - Organized Secondary Markets for Limited Edition Products
course of an advertisement. The results show that social TV activity can indeed
Prakash Awasthy, Assistant Professor, MYRA School of Business, significantly explain these dynamics over and above conventionally studied ad
Near Infosys, Opp. Power Grid, Yelwal, Mysore, 571130, India, and program characteristics. We find especially the interplay of three factors to be
prakash.awasthy@gmail.com, Aruna D. Tatavarthy relevant: (1) volume of and (2) change in online WOM about the program before
Firms are known to induce ‘scarcity’ and ‘snob’ appeal for their products by an ad airs and (3) position of the ad in its ad break. In particular, higher program-
rationing capacity. Consumption externality further explains why some related WOM volumes are associated with less tune-out during ads, but only for
consumers value the ‘uniqueness’ associated with a ‘limited-edition’ (LE) product. ads that air later in their particular ad break. Moreover, ad avoidance is also
The presence of secondary markets reduces the competitive advantage of firms reduced for ads in programs with higher program WOM volumes that air after a
when consumers have high-quality uncertainty. In this paper, we provide an spike in program chatter. Altogether, our results provide television networks and
alternative explanation when a firm might still have a competitive advantage in advertisers with important insights to improve their respective social TV, ad
the presence of a secondary market. We identify two types of secondary markets: positioning, and television advertising strategies.
90

2 - The Effect of Word of Mouth Volatility on Product Performance covariates for location and scale parameters, to build counterfactual baseline
Minjeong Kim, PhD Student, Korea University, Seoul, Korea, predictions for each sales component for the promotion period. These baselines
Republic of, mkim9@korea.ac.kr, Shijin Yoo assume that the promotion has not occurred. To evaluate the promotion effects
on each component, the approach compares the observations to the
This study investigates the relationship between word of mouth (WOM) volatility, corresponding baseline predictions during the promotion. This approach has at
defined as the over-time fluctuation of WOM volume, and product performance. least three strengths: first, it does not require building a model for the promotion
For example, low WOM volatility indicates that there exists a stable amount of effect. Second, it controls for covariate effects, such as time of the day, day of the
WOM in the marketplace. On the other hand, WOM volume could significantly week, etc. Third, it measures the effects of the promotion directly on the
change over time due to many reasons, indicating high WOM volatility. Though quantities of interest, arrival counts, conversion probabilities, and expenditures,
marketing literature to date has examined three major metrics with respect to and not on the scales of parameters which are often difficult to translate into
consumer WOM behavior: volume, valence, and variance, this study is the first effects on observables. An illustration with data from an actual store combines
attempt to propose the fourth important aspect of WOM, its volatility. We arrival data from processed video images and sales recorded at sales registers.
hypothesize that WOM volatility plays a negative moderating role on both the
volume and valence effects of WOM on product performance. That is, more 2 - Effect of New Product Sampling Using Single Source Data
volatile WOM is expected to attenuate the positive relationship between WOM Akira Shimizu, Professor, Keio University, 2-15-45 Mita,
volume and product performance. In addition, more positive WOM will have less Minato-ku, Tokyo, Japan, ashimizu@fbc.keio.ac.jp
significant effects on better product performance if the WOM volume more
Many papers refer to the effect of product sampling is not only the sales growth of
fluctuates over time. An empirical test was conducted using online WOM and box
new products, but also the effect of WOM for the potential customers (Holmes
office sales data for 124 movies in Korea. As a result, we verified that WOM
&Lett 1977, Jain, Mahajan &Muller 1995). But no papers evaluate both effect of
volatility significantly moderates the relationship between WOM volume and
new product sales and WOM using real product sampling data, as there is no
product sales. However, there is no significant effect of WOM volatility on the
research field to observe both real WOM and real buying behavior. The goal of
relationship between WOM valence and product sales. Marketing researchers and
this paper is to find product sampling effect of real new products. In this paper I
managers should notice that WOM volatility may attenuate the volume effects of
made single source data field of closed internet WOM community, questionnaires,
WOM on product performance.
and receipt data in Japan. I asked that WOM community members to take part in
3 - Effects of Peer Voting and Social Network on User Contribution of 3 new product sampling campaigns (2 new beer brands and 1soft drink brand).
Online Knowledge Sharing Platforms They also asked to post their impressions of these sampling brands on their WOM
Mengxia Zhang, University of Southern California, Los Angeles, community. From this campaignes, I found that the trial buying rate of
participants on this sampling campaigns is about 10 times higher than that of no
CA, 90007, United States, mengxia@marshall.usc.edu, Lan Luo
participants. Also, some no campaign participants truly buy the new products that
In the era of information explosion, getting useful information is like finding “a the campaign participants recommended at the WOM community. The results
needle in a haystack”. Consequently, online knowledge sharing platforms are offer new insights on the single source data and product sampling.
increasingly relying on peer voting systems to harness wisdom of the crowds.
Meanwhile, some (but not all) platforms also integrate social networks to 3 - Have Promotions Become Less Effective Over Time –
motivate content contribution. In this research, we investigate how peer voting A Twelve-year Analysis
and social network affect knowledge contribution and whether they are Anthony Koschmann, Eastern Michigan University,
substitutes or complements. We plan to employ a field experiment where we 7415 Willow Creek Dr, Ypsilanti, MI, 48197, United States,
exogenously increase the total number of upvotes or/and the total number of akoschma@emich.edu, Scott Neslin, Paul Wolfson
followers on an online knowledge sharing platform. Preliminary results based on
observational data show that peer voting and social network have different effects Promotions have long been used by brand managers to spur consumer purchases.
on user contribution. For peer voting, an increase in number of upvotes increases Yet, continued use by both the brand and competing brands may diminish the
knowledge contributions for users with low or high number of initial upvotes effects of promotions on brand sales over an extended period of time. That is, the
more than for those with medium number of initial upvotes (U-shape). While for size of the short-term promotion “bump” generated by promotions may decrease.
social network, increasing the number of followers increases knowledge The decline could be caused by a combination of store, category, and brand
contributions for users with medium number of initial followers more than for factors. This research investigates the change in promotion effectiveness using
those with low or high number of initial followers (inverse U-shape). We also find weekly data over a twelve-year period of consumer packaged goods using a
number of followers and number of upvotes are substitutes for motivating user dynamic linear model (DLM) to allow for systematic changes over time. We
knowledge contribution. This research is among the earliest efforts to study how model these changes to be a function of store, category, and brand factors. The
peer voting affects user content contribution. We are also among the first to results show that, on average, price reductions, feature advertising, and in-store
examine how the interaction between peer voting and social network affects displays have become less effective in driving sales.
content generation. Lastly, this is one of the first studies to examine knowledge 4 - Conditional Promotions and Purchasing Breadth
sharing on online platforms. Nathan Fong, Temple University, Alter Hall 517,
1801 Liacouras Walk, Philadelphia, PA, 19122, United States,
nmfong@temple.edu, Sangsuk Yoon
n SB09 We investigate the promotional tactics and targeting policies that affect customers’
purchasing breadth by analyzing email and direct mail campaigns for a
Room 239, Alter Hall multichannel retailer. Conditional promotions that require customers to exceed a
Promotions & Effectiveness spending threshold to obtain a reward can motivate customers to search.
Consequently, we find them more likely to purchase items from a new category
Contributed Session or product line as the threshold increases. Promotional offers for products similar
Chair: Nathan Fong, Temple University, Alter Hall 517, 1801 Liacouras to a customer’s previous purchases generate higher direct response, but lower the
Walk, Philadelphia, PA, 19122, United States, nmfong@temple.edu chances that a customer will expand the breadth of their purchasing. Thus,
conditional promotions can potentially generate long-term benefits by
1 - The Effects of a Promotion on Store Traffic, Conversion, and introducing customers to new products, but standard targeting policies that
Customer Expenditures: Evaluation with a Prediction Approach increase direct response can offset the breadth-inducing effects.
Ignacio Inostroza-Quezada, PhD (c) in Marketing, Rutgers
Business School, Rutgers University, 1 Washington Park, Newark,
NJ, 07102, United States, iei5@scarletmail.rutgers.edu, Leonardo
David Epstein
Store managers conduct promotions to increase at least one of three measures of
store performance: arrival traffic, conversion probabilities, and customer
expenditures. These are the three total sales’ components of sales that Lam et
al. (2001) identify. The talk presents a new approach to evaluate the effects of a
promotion on each of these components: it develops a joint 3-variate time series
model, where the variables are the arrival counts, the conversion counts and the
average expenditure in one-hour time-bands. The model incorporates explicitly
the dependence among the three components. The approach uses data outside
the promotion period along with regression models with independent sets of
91
n SB10 4 - The Impact of Social Media Buzz on Box Office Performance

Lachlan Deer, Dept of Economics, University of Zurich,
Room 605, Alter Hall Schoenberggasse 1, Zurich, 8057, Switzerland,
lachlan.deer@gmail.com, Pradeep Chintagunta,
Digital Communities Gregory S. Crawford
Contributed Session This study examines the how the dynamics of volume and valence of social media
Chair: Keith Marion Smith, Northeastern University, 360 Huntington generated word of mouth impacts the box office performance of movies. Our
Avenue, Boston, MA, 02115, United States, analysis combines the universe of Twitter data for all wide release movies released
in 2014-15, along with detailed information on movie characteristics and
keithmarionsmith@yahoo.com
advertising spending. We use the VADER sentiment lexicon - designed specifically
1 - Role of Marketing in the Evolution of Social Network Platforms for sentiment expressed on social media, to classify each tweet as either positive,
Tarique Newaz, Texas Tech University, 1901 14th St Apt 209, negative or neutral in tone. Our detailed data allow us to document temporal
Lubbock, TX, 79401, United States, md-tarique.newaz@ttu.edu, patterns in volume and valence of twitter generated word-of-mouth in the pre-
Mayukh Dass and post-release phases and trace out their influence on box office performance
over the duration of a film’s theatrical release. Preliminary findings reveal that the
Social Network platforms are now playing a fundamental role in our society. pre-release volume of Twitter posts is positively associated with box office returns
Much discussed and scarcely researched social networking platforms such as over the opening weekend of a movie’s release; whilst post-release tweet volume
Facebook, LinkedIn, WeChat are the base carriers of social network, social media, and the ratio of positive-to-negative post-release tweets are positively associated
and social media marketing. These firms are unique as they are not traditional with a movie’s post-opening weekend box office earnings.
tech companies, nor do they fall strictly under media industry. They somewhat
belong to a hybrid industry that is developed to be the epicenter of consumers’
information and connection world. In this paper, we focus on the role of
marketing in the evolution process of social network platforms. Using a uniquely n SB11
compiled dataset comprised of more than 25,000 news articles over the last 12
years (2003 - 2014), we investigate the life-cycle of 30 top social networking sites Room 606, Alter Hall
across the globe, and identify the critical marketing factors that play a
fundamental role in the evolution of these platforms. We also examine the
Game Theory and Channel Strategy
interplay among diverse stakeholders of SNSs- subscribers, competitors, Contributed Session
organizational factors, and government and legal agencies during the evolution
process. The paper concludes with insights for practitioners and academics, and Chair: Eunkyu Lee, Syracuse University, Whitman School of
outlines detail research streams for future research. Management, Syracuse, NY, 13244-2450, United States,
elee06@syr.edu
2 - Do Online Reviews Improve Product Quality?
Yang Wang, Assistant Professor, UTEP, 4901 North Mesa St, 1 - Quiet vs. Loud Luxury: Consuming Less to Signal More
Apt 3318, El Paso, TX, 79912, United States, ywang12@utep.edu, Zhenqi Jessie Liu, University of Pennsylvania, 3718 Locust Walk,
Alexander Chaudhry, Amit Pazgal Philadelphia, PA, United States, zhenqil@sas.upenn.edu,
Pinar Yildirim, Zhong John Zhang
In the absence of accurate product-level quality signals, the network externalities
of brand reputation act as a credible signaling mechanism for product quality. We In this study, we model consumer’s utility from luxury goods and their
test the theoretical corollary that online reviews, acting as accurate product counterfeit replicas. Consumers purchase luxury brands or counterfeits for their
quality signals, improve independent hotels’ quality provision by leveling the functional and symbolic utility: each product carries a function while allowing the
playing field for quality competition. We analyze the evolution of online reviews consumer to signal her qualities (such as status or wealth). But when the luxury
in a big data setting that spans over 200,000 hotels in markets around the world. products and counterfeits are indistinguishable, luxury items cannot perfectly
We provide additional evidence of product quality investments in a regression signal these. So consumers have to resort to other tactics. Specifically, our findings
discontinuity setting whereby managers are incentivized to provide better quality suggest that status-conscious consumers will resort to low-key tactics such as
when their hotels’ aggregate display ratings approach rounding points on consuming fewer branded products to signal their wealth, forming a quiet luxury
TripAdvisor. consumption segment. On the contrary, if there are affordable high-quality
counterfeit items in a market, consumers who lack wealth choose to purchase a
3 - Maybe Donkey Kong Just Needed More Friends: The Dynamic higher number of goods, forming a loud consumption segment. When the
Interactions between Video Game Consumption and Online functional utility of a product exceeds the symbolic consumption utility,
Social Communication purchasing fewer items to imitate the wealthy segment is costly for those who
Keith Marion Smith, Northeastern University, Boston, MA, lack wealth. Therefore, wealthy and status-conscious consumers have an
incentive to reduce their conspicuous consumption and dissociate themselves
United States, ke.smith@northeastern.edu, Yakov Bart,
from those who lack wealth. Our study provides the micro-foundations of the
Scott A. Thompson, Koen Pauwels, John Hulland growing trend of quiet luxury and extends the model to give insights about how
Video game products have undergone explosive growth, now regularly exceeding income inequality in a market can drive the demand for luxury as well as
movie revenues in global markets - however our understanding of what it takes counterfeits.
to create a successful product in this category is lacking. Interesting features of
that product category include the impact of post-purchase video game
2 - Contracting and Channel Coordination on Durable Goods
consumption on consumption-driven costs and revenues, and the integration of Secondary Market with Retailer Competition
online social communication as a key component of video game playing Taewan Kim, Sungkyunkwan University, 25-2, Sungkyunkwan-ro,
ecosystems. More broadly, while various products today often include features Jongno-gu, Seoul, 03063, Korea, Republic of, tak2@skku.edu,
that facilitate interaction within consumption, and encourage social engagement Ryan Choi
outside the consumption experience, the contemporaneous influences of post-
We examine a distribution channel of durable goods whose market system may
purchase consumption and social interaction are not well understood. This paper
have trilateral monopolists. In particular, we consider a market structure where a
investigates the short-term relationship between video game consumption and
manufacturer (i.e., car manufacturer) sells products to consumers through two
online community interaction over fifteen-minute periods. The authors examine
levels of retailers; one is a direct retailer (i.e. car dealership) which may handle
these relationships using automated data collection techniques to capture 85 days
both new and used goods and the other one is an indirect local retailer (i.e.,
of consumption and online community activity in fifteen-minute intervals for 34
CarMax) that deals with only used goods. Given this situation, the goal of this
different game products. Vector autoregressive modeling techniques are employed
research is to study the optimal pricing decisions that each player make
to understand the influences consumption and online activity have on each other,
strategically. For example, how does the direct retailer setup a buyback price (i.e.,
and the impact that both community metrics and online web trends may have on
trade-in value) for potential buyers of its new product? How does this price vary
this relationship between consumption and social activity. The results reveal that
when the indirect retailer appears in the market? How do retailers control these
community activity has a positive impact on consumption, but that impact can
used goods availability? We develop a simple game-theoretical model to address
take up to three hours to peak, and generally persists for up to three days.
these issues. We start our study with a completely integrated market as a
Alternatively, consumption also has a positive impact on community activity, but
benchmark and then move to an integrated market with an independent local
typically peaks within the first hour, and similarly can persist for up to three days,
retailer. Then, we extend our analysis to a market with perfectly differentiated
extending to a week in some cases.
retailers. Depending on the values of parameters such as channel acceptance rates
or transaction costs, we show the retailer-level competition intensity that derives
the retailers’ buyback prices and used goods availability. Along with these market
characteristics, the manufacturer can make its strategic decisions on new product
sales and wholesale price.
92

3 - The Implications of Market Characteristics for Strategic 3 - Cultural Influences on Millennial Mobile Marketing Acceptance
Interaction in Distribution Channels in China
Eunkyu Lee, Professor, Syracuse University, Whitman School of Meghan E. Pierce, Assistant Professor of Marketing, La Salle
Management, Syracuse, NY, 13244-2450, United States, University, 1900 W Olney Ave, Philadelphia, PA, 19141, United
elee06@syr.edu, Shahryar Gehibi, Hwan Chung States, piercem@lasalle.edu, Pingjun Jiang, Xianghui Zhu
Previous studies indicate the presence of a relationship between market Marketers’ attention is increasingly focused on digital platforms (Rohm et al.
characteristics and the type of strategic interaction in distribution channels, but 2012). With 94% of Chinese consumers between 18 to 34 owning a cell phone
fall short of fully characterizing it. Our in-depth mathematical analysis on this (Pew Research Center 2017), marketers are capitalizing on the medium that is the
issue completely identifies the linkage between market demand properties and most common method of communication among consumers (Bauer et al. 2005)
vertical strategic interaction, and demonstrate that a single demand characteristic, and are projected to spend $65 billion on mobile advertising in 2019 (eMarketer
demand’s decay rate, holds the key. If demand’s decay rate increases in price, it 2015). Given that cell phone use is ubiquitous among consumers and marketers,
leads to vertical strategic substitutability (VSS), whereas vertical strategic it is important for marketers to better understand how consumers view mobile
complementarity (VSC) is associated with demand’s decay rate that is decreasing marketing messages and what factors influence these perceptions. Recent work in
in price. We also find that the only class of demand functions leading to vertical this area has developed models of mobile marketing acceptance (Bauer et al.
strategic independence (VSI) is of exponential form. The decay rate of demand is 2005), including cross-cultural examinations (e.g., Gao et al. 2013; Zhang et al.
equivalent to the hazard rate of the consumer valuation distribution, which can 2012), using the country level as the unit of analysis. These comparisons, based
be evaluated empirically to infer the type of vertical strategic interaction. on Hofstede (1980), overlook the possibility of cultural variation within countries
Interestingly, unimodal distributions lead to VSS, whereas monotonically- (Yoo et al. 2011). This paper employs survey methodology (n=953) to examine
decreasing distribution density functions result in VSC or VSI, which suggests the impact of individual-level cultural values on consumer attachment, privacy
interesting implications of product characteristics for distribution channel concerns, and mobile marketing acceptance among Chinese millennials. Using a
management strategy. We seek to link these theoretical findings to empirical structural equation modeling approach, all five cultural values were significantly
evidence to demonstrate the presence of different types of consumer valuation related to Chinese consumers’ attitudes toward mobile marketing. Results indicate
distributions and their relationship with different patterns of strategic interactions consumers who score higher on the cultural values of power distance, uncertainty
in distribution channels. avoidance, collectivism, and long-term orientation tend to have more positive
attitudes toward mobile advertising. However, consumers rated high on the
cultural dimension of masculinity hold more negative attitudes toward mobile
advertising. Additionally, consumers who score higher on the masculinity
n SB12 dimension have less privacy concerns with mobile advertising.
Room 745, Alter Hall 4 - Information Provision and Streamlined Medical Service:
Mobile Marketing II Evidence from a Mobile Appointment App
Nan Yang, National University of Singapore, 15 Kent Ridge Drive,
Contributed Session Mochtar Riady Building, 6-3, Singapore, Singapore,
Chair: Meghan Pierce, La Salle University, 1900 W Olney Ave, yangnan@nus.edu.sg, Changcheng Song, Junjian Yi, Ye Yuan
Philadelphia, PA, 19141, United States, Piercem@lasalle.edu We examine a mobile outpatient appointment app—-a light-weight information
1 - The Economics of Jailbreak technology innovation—-launched by Chinese hospitals. The objective is to assess
Nanda Kumar, The University of Texas at Dallas, Richardson, TX, the effect of information provision and a streamlined appointment process on
hospital operations and the alignment of healthcare supply and demand. Using a
75080, United States, nkumar@utdallas.edu, Juncai Jiang,
longitudinal dataset on hospital operation and a difference-in-differences model,
Liying Mu we document that the app increases completed hospital consultations by 9.5%, by
As a popular yet controversial topic, jailbreak involves mobile users bypassing the boosting registrations by 4.8% and reducing appointment cancellations by 3.4%.
limitations and restrictions imposed by mobile platforms to gain access to apps The app improves queuing efficiency in overcrowded hospitals and draws demand
that are unavailable through the official app stores. In this study, we build a for underutilized ones. It results in a better match between patient demand and
game-theoretic model to explain why 1) mobile platforms such as iOS (by Apple hospital service by directing patients to the hospital and department more suitable
Inc.) and Windows Phone (by Microsoft) develop a rigorous review program to to one’s medical conditions and to less busy days. Subsequent app launches
forbid low-quality apps from selling through the mobile platform’s sanctioned app shorten average waiting time for booked appointments.
store while Android (by Google Inc.) does not, 2) iOS obstructs the jailbreaking
behavior while Windows Phone encourages its users to jailbreak the mobile
platform, and 3) jailbreaking tablets is made legal in 2010 based on the Digital
Millennium Copyright Act but jailbreaking iPhone is illegal until 2015. n SB13
Interestingly, we find that low-quality apps may be better off with the review
program.
2 - Research on the Effectiveness of Personalized Recommendation New Products and Innovation III
Driven by Multi-source Big Data in the Context of Mobile Internet Contributed Session
Kai Yao, Central University of Finance and Economics, Chair: Christian Pescher, FAU Erlangen-Nuremberg, Lange Gasse 20,
Xue Yuan Nan Lu, Haidian District, Beijing, 100081, China, Nuremberg, 90403, Germany, christian.pescher@fau.de
jasonyaopku@gmail.com, Yuxin Chen, Ping Tu, Meng Su
1 - Prelaunch Sales Forecast of Entertainment Products
With the development of the big data and mobile internet, personalized Peng Zhang, University of Georgia, Athens, GA, United States,
recommendation system has become a ubiquitous tool for online firms to offer vincentz@uga.edu, Guiyang Xiong, Sundar G Bharadwaj
unique shopping experience to the consumers who are searching on their
websites. However, the traditional recommender system’s performance is Managers usually consider new product sales forecasting utterly critical and
constrained by the limited data sources that the firm can access. Meanwhile, the believe a reliable early forecasting method limits resource loss, promotes the
performance of recommender system using multi-source data, as well as the optimization of firms’ logistics planning, improves manufacturing efficiency, and
mechanisms of how the recommender system influence consumers’ shopping drives firm value. However, in most instances, it is no easy especially for new
behaviors are largely unknown. This research utilizes field experiment to establish products due to a lack of prior sales data. Prior research on new product sales
the causal inference between the recommender system based multi-source big forecasting has relied on initial sales, or sales of look-alike products. Recently,
data and consumers’ online shopping behaviors. This approach can solve forecasting had utilized user online conversations (electronic word-of-mouth or
endogeneity problem and achieve good external validity. Since the consumers eWOM) around a pre-released product on social media and online platforms to
who use mobile devices are more likely to see the recommended products, we reliably forecast product sales. However, such activity is rather limited to a few
proposed a two-stage model to jointly estimate the probability of seeing the platforms, whose primary function is for social bonding (e.g., FaceBook) and/or
recommended products and the probability of clicking those products to avoid the creativity thriving (e.g., YouTube, or blogs). Platforms, such as review sites, may
estimation bias. This research explores not only the short-term influence of the play a role in knowledge sharing and transfer, but that is mainly a one-way
recommender system based on multi-source big data on the consumers’ shopping communication from reviewers to customers. We examine an alternative role of
behaviors at the focal website, but also the long-term influence of this new eWOM, namely in a platform for collaborative knowledge accumulation,
recommender system on their shopping behaviors at both the focal website and transformation, and co-creation as an input for new product prelaunch sales
other external websites. The conclusions of this research project will provide forecasting. In particular, we selected Wikipedia’s English website as the pilot
empirical evidence for the big data driven personalized marketing theory and platform, given its nationwide presence and broad user base. We collected editing
offer important guidance for the firms’ personalized marketing practice, as well as activity data on en.wikipedia.org for more than 600 video games which were
the pricing strategy for trading data between firms. newly launched in 2015 and utilized a functional data analysis (FDA) method to
empirically examine how users’ collective knowledge-generation activities on
Wikipedia for a video game before its official launch may be used to forecast that
game’s sales volume post launch.
93

2 - Empirical Generalization on Failures of New Product Diffusion in
Packaged Goods Markets n SB14
Makoto Mizuno, Professor, Meiji University, School of Commerce, Room 607, Alter Hall
1-1 Kanda-Surugadai, Tokyo, 101-8301, Japan,
makmizuno@gmail.com, Masakazu Ishihara, Eitan Muller Marketing Strategy - Brand Equity
Marketers launching new products are often faced with failures of the diffusion of Contributed Session
innovations over potential adopters, in spite of having performed a thorough pre- Chair: Arnd Vomberg, University of Mannheim, L 5 1 (Castle),
launch screening process. Whereas classical diffusion models did not explicitly Mannheim, 68131, Germany, arnd.vomberg@bwl.uni-mannheim.de
deal with the possibility of such failures, subsequent studies addressed (1) the
failure of transition between adopter segments, e.g., “chasm” (Moore 1999) or 1 - Pay What You Want Pricing for Digital Goods
“saddle” (Goldenberg, Libai and Muller 2002), and (2) the failure of initial So Eun Park, Assistant Professor, University of British Columbia,
targeting or the existence of “harbingers” (Anderson et al. 2015), and (3) Sauder School of Business, UBC, HA 565 - 2053 Main Mall,
accidental shocks initiating a self-reinforcement process (Salganik, Dodds and Vancouver, BC, V6T 1Z2, Canada, soeun.park@sauder.ubc.ca,
Watts 2006). The first two studies emphasized the critical roles of early adopters Byung Cho Kim
who are overlapping to some extent between distinct categories, suggesting the
existence of specific customers who are not only early adopters but also are In Pay-What-You-Want (PWYW) pricing, consumers can pay any price they want
“predictors” in multiple markets, unintentionally indicating the success/failure of for a given commodity, often including a price of zero dollars. Conventional
new product launches by their behaviors. We ask whether these propositions are economic theory predicts that consumers would pay as low a price as possible
empirically generalizable across categories. Using the scanner panel data driven solely by their own material payoffs, but prior lab and field experiments
documenting 10-year individual-level purchase histories for 30 categories of have shown that they often pay more than nothing. Interestingly, PWYW
packaged goods in two regions in the US, we attempt to discover the stylized facts adoption results seem to vary by product type in practice. It appears to be
related to the failures of new product diffusion in a wide range of package goods sustainable for digital products with many artists and sellers such as Radiohead
categories and then test the hypotheses derived from the previous studies. Lastly, and Louis C.K. distributing their digital contents under PWYW pricing to their
we discuss how to develop the comprehensive model of diffusion incorporating satisfaction, while brick-and-mortar stores often ended up gradually reversing
the possibility of failures based on our empirical findings. back to the classic posted pricing. In this paper, we examine the viability of
PWYW pricing for digital goods based on a widely studied social preference theory
3 - Disadoption Patterns in Fast Moving Consumer Goods that consumers may be concerned with not only their own material payoffs but
Koen Pauwels, Professor, 742 Commonwealth Avenue, Newton also the company’s. Utilizing a two-segment model for consumers (self-interested
Center, MA, 02459, United States, koen.h.pauwels@gmail.com, and social-preference consumers), we compare the firm’s pricing strategies
Donald R. Lehmann, Gokhan Yildirim (posted vs. PWYW pricing) in a monopolistic digital goods market where marginal
costs are nearly zero and piracy threats exist. We find that under no piracy
Despite the long research stream on the adoption and diffusion of new products, threats, PWYW yields higher profit than the conventional posted pricing if the
little is known about disadoption; when and how consumers stop buying fraction of social-preference consumers and their behindness-aversion are both
products. Existing disadoption research focuses on either cases where a newer high enough. We further show that as piracy threats appear, PWYW pricing
product replaces the old one (technological substitution) or very specific instances becomes more attractive to the firm than conventional posted pricing. These
of disadoption. The few papers that consider disadoption deal with services. results suggest that PWYW pricing can be an effective digital rights management
However, fast moving consumer goods experience many cases of consumer device while being lucrative.
disadoption and product discontinuance yearly, with a third of new products
perishing in their first year. The ultimate goal of this research is to develop a 2 - A Brand’s Secondary Audience: Brand Equity and Strategic
general model of disadoption as well as a tool to predict the pattern of disadoption Human Resource Management
for fast moving consumer goods based on aggregate sales data. Based on a Arnd Vomberg, Assistant Professor, University of Mannheim, L 5 1
conceptual framework for understanding disadoption in general, we analyze as a (Castle), Mannheim, 68131, Germany, arnd.vomberg@bwl.uni-
first step SKU disadoption patterns in the coffee category. Importantly, mannheim.de, Christian Homburg
disadoption differs from adoption in several aspects including, unlike for new
product adoption, there is no risk involved because people know what they are Are the best brands the best companies to work for? Or, stated differently: Does a
giving up and it cues loss aversion, inertia, and possession utility. We empirically firm’s brand equity influence its investment in its employees? Findings from prior
model adoption and disadoption at the aggregate level and distinguish several marketing research give rise to these questions. Prior research in marketing
disadoption patterns, such as abrupt versus gradual disadoption, and link the indicates that applicants are attracted to companies with strong brand equity
disadoption parameters to the innovation and imitation parameters of initial because they assume the companies will invest in them on the basis of strategic
adoption. human resource management (SHRM). However, whether companies actually
meet this expectation is unknown. We test two competing lenses to explore the
4 - Automated Idea Screening effects of brand equity—one of a firm’s most important strategic resources—on
Christian Pescher, FAU Erlangen-Nuremberg, Lange Gasse 20, companies’ engagement in SHRM. Under the resource-based view (RBV) of the
Nuremberg, 90403, Germany, christian.pescher@fau.de, firm—the first lens—companies with strong brand equity should engage in SHRM
Gerard J. Tellis, Jason Bell more. The second lens is based on the participation-production perspective and
predicts that companies with high brand equity engage in SHRM less. Utilizing
Pairs of words that appear often together can be seen as connected. This view diverse panel data sources (KLD, Sustainalytics, EquiTrend®, and Compustat), we
allows idea descriptions to be converted into numbers representing the find that brand equity has a negative influence on SHRM. We also find that this
connection strengths of the word pairs. Previous work has used this principle to behavior leads to the highest levels of customer satisfaction and Tobin’s q.
numerically compare ideas to a reference corpus comprised of Search Results. We Thereby, our study contributes to a more holistic brand equity theory. Particularly,
call this the Search Result Corpus method. In that work, the metric for measuring we enrich the employee-based brand equity concept (Tavassoli et al. 2014) by
distance between ideas and the Search Result corpus is the Kolmogorov-Smirnov demonstrating that employees are a focal secondary audience of marketing
statistic. We build on this work by testing the Search Result Corpus Method in a endeavors. From a managerial point of view, our results indicate that—as a side
new, uniquely rich dataset from idea submission contests. We attepmt to replace effect—increasing brand equity by one standard deviation reduces the necessary
expert judgment with The Search Result Corpus Method. We find that the HR budget by 8% in the next year.
previously studied metric, the Kolmogorov-Smirnov distance, is only weakly
significant in random intercepts regression models, and tends to predict 3 - Understanding the Impact of Product Innovation and New
community ratings better than expert ratings. However, expert ratings determine Product Failure on Brand Equity using Store-level Data
contest winners and so are higher priority. We explore the use of a Random Wanyu Faith Li, PhD Candidate, McGill University, Montreal, QC,
Forest as a prediction method. Random Forests are collections of decision trees Canada, wanyu.li@mail.mcgill.ca, Yu Ma, Laurette Dubé
estimated on resampled data. When using a Random Forest, we achieve a high
degree of fit. The correlation between fitted rankings and actual rankings often Brand equity is the name recognition and goodwill a brand enjoys. It takes
exceeds 0.9. In addition, on the task of picking the top 10% of ideas in any patience and time to build positive equity. Researchers have long examined the
contest, the Random Forest model agrees with the expert rankings on at least half impact of new products on brand equity using consumer surveys, financial
of the ideas, and up to 84% in one case. market data, and scanner/sales data. It has been shown that successful new
product introductions enhance brand equity by improving product features and
building product-related associations. However, little has been said about the
impact of new product failure, despite a majority of new products failed to
generate long-term impact on firms’ growth and were withdrawn from market.
This study aims to investigate the effect of new product introductions and
withdrawals on a brand’s equity over time. While product innovations may
strengthen brand equity, a failed product might dilute brand equity by
disappointing customers. We propose a conceptual framework of the impact of
product failure on brand equity and then empirically estimate the effects using
store level sales data. After controlling for advertising, promoting and other
marketing activities, we find significant effects on brand equity due to new
product introductions and withdrawals. In addition, we find that the timing of
product withdrawal and the timing of new product introduction after previous
withdrawal moderate the influence of product failure on brand equity.
94

4 - How Incentives Shape Strategy: The Role of CMO and CEO product evaluation. Based on the above considerations, we conducted two
Equity Compensation in Inducing Marketing Myopia experiments. The empirical studies showed that for the condition of participants
Natalie Mizik, University of Washington, UW Foster Business walking, the orientation of the product pointing in the same direction as the
moving direction of the participants resulted in higher processing fluency, and led
School, 412 Paccar Hall, Seattle, WA, 98195-3226, United States,
to higher product preference. Similarly, for the condition of participants moving
mizik@mit.edu, Martin Artz towards a certain direction by passive means, such as taking a bus, product
We examine the role personal compensation incentives of CMOs and CEOs play preference and processing fluency increase when the orientation of the product
in inducing myopic marketing management. We find that CEO equity incentives match the moving direction of the participants.
are largely unrelated to the incidence and severity of myopic marketing
management. CMO equity compensation, on the other hand, is highly predictive
3 - The Value of Inactionable Information
of the incidence and severity of myopic marketing management. Contrary to the Luc R. Wathieu, Georgetown University, McDonough School of
arguments that the presence of a CMO in the organization can help maintain Business, Rafik B Hariri Building #102, Washington, DC, 20057,
customer focus and support for marketing departments, we find that CMOs not United States, lw324@georgetown.edu, Jeeva Somasundaram
only fail to prevent myopia, but further exacerbate the problem as the market- The value of inactionable information should be zero, but anecdotal evidence
based (i.e., equity) portion of their personal compensation increases. Our analyses suggests it is not. We propose and test a simple behavioral theory that suggests
utilizing multiple methods designed for identification of causal effects (e.g., that inactionable information can have positive value, particularly in relation to
IPWRA; endogenous treatment effects; control function; difference-in-differences) low probability/high stakes risks.
allow for a causal interpretation of these findings. Further, consistent with the
CMO’s personal enrichment motivation, we also find that CMOs take advantage
of artificially inflated stock valuation by exercising more stock options and selling
more of their personal equity holdings in the years when myopic marketing
management occurs. Our findings highlight the pitfalls and limitations of
n SB16
overreliance on equity in managerial compensation packages. Room 231, Alter Hall
Targeting Consumers
Contributed Session
n SB15
Chair: Subroto Roy, University of New Haven, 18 Colonial Court,
Room 603, Alter Hall Cheshire, CT, 06410, United States, Dr.SubrotoRoy@gmail.com
CB – Construal & Processing 1 - On the Other Side of Customer Loyalty: Dynamic Campaign
Contributed Session Optimization in the Presence of Competition
Jue Wang, Queen’s University, 143 Union Street, Kingston, ON,
Chair: Luc R. Wathieu, Georgetown University, McDonough School of K7L 3N6, Canada, jue.wang@queensu.ca, Ceren Kolsarici,
Business, Rafik B Hariri Building #102, Washington, DC, 20057, Mikhail Nediak
United States, lw324@georgetown.edu
In this paper, we study the dynamic endogenous relationship between the
1 - Explaining Consumer Affinity for Primary Color advertising strategy and the prospect’s stage on the path to conversion, and
Lawrence L. Garber, Associate Professor, Elon University, 2075 optimize campaign targeting for each individual and over time. We use
Campus Box, Elon, NC, 27244, United States, lgarber@elon.edu, individual-level data on channel-specific advertising exposure and consumer
Kacy Kim, Lubna Nafees, Eva M. Hyatt, Ünal Ö. Boya response through online and offline channels for a range of ad campaigns from a
large bank in the South American market. Importantly, we control for prospect
Primary colors are pure colors from which all other colors are obtained. There consumers’ relationship with competitors through data from a credit reporting
only a few of them - red, yellow and blue - making their selection to identify and agency which tracks individuals’ financial activities such as consumer debt,
distinguish one’s brand problematical. Inspection of those highway signs showing account with other financial institutions etc. Competitive controls have not been
available restaurants off some particular exit underscores the problem. Several considered in previous literature, and help us understand how campaign
restaurants are invariably represented by primary red, a curious choice for effectiveness is influenced by the prospect’s incumbent relationship with other
competitor brands usually preferring to differentiate themselves. Why then do so financial institutions (FIs).
many brands favor primary colors as their “signature,” when in many categories it
is shared by competitors also selecting primaries? Presumably, the reason is that Preliminary results suggest that the effectiveness varies significantly across
consumers respond well to primary colors. They must favor them. But, why? channels, and channel combinations can be optimized to increase conversion.
There is a voluminous literature asserting the efficacy of color as a visual Prospect customers have episodic financial needs which can be satisfied by the FIs
persuader, but little to explain its effect. In this research, we propose a conceptual they previously dealt with. This incumbent relationship with other FIs suggests
framework explaining how novel primary color as brand identifier is cognitively stickiness which is often studied in customer retention. Since individual
processed, and a series of studies to test it. The processing of any stimulus object customers have different level of stickiness with other FIs, the choice of pulsing
occurs at two levels, a direct sensory effect and a memory effect. This framework versus continuous strategy and the timing of the campaign need to be
takes account of this duality using a staged model of visual information personalized and dynamically re-evaluated to address customer’s financial needs.
processing, mapping direct sensory and memory processes onto early and higher Finally, based on results, we discuss insights on how to select the campaign
level stages of vision, respectively. We explain the direct sensory effect of strategy to maximize the probability of conversion under realistic business rules.
primaries as novel brand stimulus in terms of supernormal stimuli, and their
memory effect in terms of construal levels. Theoretical, and managerial 2 - Optimal Micro-targeting in the Presence of Competition
implications are to be discussed. Peter Danaher, Professor of Marketing and Econometrics, Monash
University, Department of Marketing, P.O. Box 197, Melbourne,
2 - Consistency of Direction Can Influence Processing Fluency and
3145, Australia, peter.danaher@monash.edu
Product Evaluation
Takeshi Moriguchi, Professor, Waseda University, 1-6-1 Customer-level databases that link advertising exposure to purchases have
NIshiwaseda, Shinjuku-ku, Tokyo, 169-8050, Japan, become widespread in today’s business environment. This has enabled firms to
target customers with advertising based on, for example, purchase history or
moriguchi@waseda.jp, Mayuko Nishii, I-Shan Hsieh, Ryoka
brand engagement via clicking on emails or initiating a search query. While such
Asakura, Yuri Komon, Shota Narukawa, Ryoichiro Mitsuda targeting rules are reasonable and easy to implement, they fail to consider the
The concept of “processing fluency” has been widely discussed in various areas, responsiveness of each customer to these advertising efforts, among other factors.
including marketing and consumer behavior. Processing fluency is defined as the In particular, firms need to know how much to spend on advertising and how to
ease with which people process information, and it has been found that allocate this total spend across each medium. In the aggregate case optimal
experiencing fluency while processing information has a positive effect on control theory provides a powerful framework for firm profit maximization
decision making. Processing fluency can be influenced by eye movement. For allowing for ad response, cost per medium, ad carryover and depreciation, all in
example, Shen and Rao (2016) focused on the relation between fluency of eye the presence of multiple competing brands. However, in the context of advertising
movements and product evaluation. Our study concentrated on human body allocation, optimal control theory has never been applied at the individual level.
movement—namely, walking and riding. There are many advertisements in Consequently, in this study we show how optimal control theory can be adapted
stores, trains, buses and on the roads. Consumers often see these advertisements to individual customers via a multinomial logit model with individual-specific
while walking or riding. In these cases, they move to certain directions, and response parameters. In turn, these parameters are used to determine both the
sometimes products in advertisements convey direction (e.g., automobiles, shoes, optimal total ad spend for each customer and how much should be allocated to
pens, and so on). At the time of exposure, consistency between two directions each medium. We show using simulations and an empirical example that using
(consumer’s movement and product) may influence processing fluency and our optimal micro-targeting method improves predicted brand market share over
existing targeting methods by between 12% and 30%.
95
SC01 INFORMS MARKETING SCIENCE – 2018

3 - Can Old Customers be Gold? Engaging Past Donors on Facebook 2 - The Sharing Economy and Housing Affordability:
Subroto Roy, Professor of Marketing, University of New Haven, Evidence from Airbnb
Orange, CT, United States, Dr.SubrotoRoy@gmail.com, K. Sudhir Davide Proserpio, Marshall School of Business, Los Angeles, CA,
Old customers are valuable because they (a) are already familiar with the brand United States, proserpi@marshall.usc.edu, Kyle Barron,
and have no acquisition cost (b) have bought a few times and demonstrated Edward Kung
affection for the brand and its promise (c) have more potential than the estimated We assess the impact of home-sharing on residential house prices and rental rates.
3-5 years in traditional direct mail Customer Lifetime Value (CLV) calculations. Using a comprehensive dataset comprised of Airbnb listings from the entire
United States, we regress zipcode level house prices and rental rates on the
We run field experiments with direct mail and Facebook advertising to engage
number of Airbnb listings, using fixed effects to control for permanent differences
past donors for a charity. In our direct mail field experiment we ask past donors to
across zipcodes as well as arbitrary CBSA level time trends, and using an
simply “like us” on Facebook, “like us” and donate or just donate. We next use
instrumental variable based on Google search interest for Airbnb to control for
the “custom audiences” feature of Facebook advertising to test alternative
any remaining endogeneity. We find that a 10% increase in Airbnb listings leads
messages to the same audiences as identified from the charity’s mailing list. We
to a 0.42% increase in rents and a 0.76% increase in house prices. Moreover, we
examine whether cross-channel advertising to past donors (customers) increase
find that the effect of Airbnb is smaller in zipcodes with a larger share of owner-
their (a) engagement with the charity on social media (b) also increase the
occupiers, a result consistent with absentee landlords taking their homes away
number of donors and amount donated.
from the long-term rental market and listing them on Airbnb. We present a
4 - Competitive Poaching in Search Advertising a Randomized simple model that rationalizes these findings.
Field Experiment 3 - Market Shifts in a Sharing Economy: Impact of Airbnb on
Sunil Wattal, Temple University, Fox School of Business, Housing Rentals
1810 N 13th Street, Philadelphia, PA, 19122, United States, Yijin Kim, Carnegie Mellon University, Pittsburgh, PA, United
swattal@temple.edu, Siddharth Bhattacharya, Jing Gong States, yijink@andrew.cmu.edu, Hui Li, Kannan Srinivasan
A key strategy that firms are increasingly following in search advertising is to This paper examines the impact of Airbnb on the rental housing market. Airbnb
generate traffic by bidding on not only their own keywords but also competitors’ provides landlords an alternative opportunity to rent to short-term tourists,
keywords. This strategy, known as competitive poaching, is prevalent in multiple potentially causing some of the property owners to switch away from long-term
industries. However, little research has empirically examined the effectiveness of rental to local residents and impacting the rental housing supply and affordability.
competitive poaching, and what factors increase its effectiveness. Moreover, Despite of the recent government regulations to address this concern, it remains
which ad copy works best under this competitive setting remains an open unclear whether and what type of properties are switching. Combining Airbnb
question. The objective of this research is to examine the effect of ad copy listings data and the American Housing Survey data, we estimate a structural
variations with respect to competitor keywords on driving number of clicks. We model of property owners’ decisions to study the impact of Airbnb on local rental
further expect this relationship to be moderated by the quality of the competitor. market and its policy implications. The results show that Airbnb mildly
We run a 5-week randomized field experiment in collaboration with a business cannibalizes the long-term rental supply but creates market expansion effect. The
school in Northeastern United States. Theoretically, our work contributes to the percentage of switchers varies significantly across cities (from 1% to 16%),
nascent field of effective ad copy design and competition in search advertising. depending on host and local market characteristics such as demographics,
Practical and managerial implications are discussed. tourism, and mortgage affordability. The impact is largely concentrated on lower
priced, affordable units rather than on higher priced, luxurious ones; a basic
studio or one-bedroom apartment is more likely to be taken off from the long-
Saturday, 1:30PM - 3:00PM term rental market than a house with two or more bedrooms with amenities.
Counterfactual results suggest that policies such as imposing tax or limiting the
maximum number of days that a property can be listed help reduce the
cannibalization of Airbnb on rental housing supply, yet they also reduce the
n SC01 market expansion effect created by Airbnb. We show how the magnitudes of the
two forces change with the level of regulations. Finally, rent regulation must be
Room 32, Alter Hall implemented with extra caution when Airbnb is available, as lower profits from
long-term rental can cause landlords to switch to Airbnb.
Sharing Economy
General Session
Chair: Puneet Manchanda, University of Michigan, Ann Arbor, MI, n SC03
R5490, United States, pmanchan@umich.edu Room 34, Alter Hall
Co-Chair: Katharina Massner, Ludwig Maximilian University of Customer-Based Corporate Valuation
Munich, Munich, n/a, Germany, massner@bwl.lmu.de
1 - The Existence and Persistence of the Pay-per-use Bias in Car General Session
Sharing Services Chair: Daniel McCarthy, Emory University, 1241 Virginia Court NE,
Katharina Massner, Ludwig Maximilian University of Munich, Atlanta, GA, 30306, United States, daniel.mccarthy@emory.edu
Munich, Germany, massner@bwl.lmu.de, Puneet Manchanda, 1 - Customer-based Corporate Valuation for Publicly Traded Non-
Martin Spann Contractual Firms
One of the key benefits of car sharing services (relative to ownership) is that they Peter Fader, University of Pennsylvania, Philadelphia, PA,
are more cost effective. Car sharing firms try to achieve this via the offering of a United States, faderp@wharton.upenn.edu, Daniel McCarthy
menu of pricing mechanisms. The two most common pricing mechanisms are
We study the problem of performing customer-based corporate valuation (CBCV)
flat-rate and pay-per-use. However, little is known about how consumers choose
for publicly traded non-subscription-based firms using only their publicly
among these pricing mechanisms. In this study, we analyze consumers’ choices
disclosed customer data. While recent research has specified a CBCV model for
between a pay-per-use mechanism and a flat-rate mechanism using data from a
subscription-based firms with high predictive validity, this methodology is not
car sharing provider operating in a large western European city. We show that
applicable for non-subscription firms. We specify a CBCV model for non-
over 40% of users make non-optimal pricing plan choices (i.e. they do not choose
subscription firms, then illustrate it upon data from two publicly traded
the mechanism that would minimize their billing rate). In contrast to most
e-commerce retailers, Overstock.com and Wayfair. For both firms, we study the
previous studies that either focus on the flat rate bias or find its prevalence to be
predictive validity of the model, obtain overall company valuation estimates, and
much higher, we find the pay-per use bias to be much more prevalent in our
compare the unit economics of newly acquired customers.
setting. In addition, we show that the pay-per-use bias is persistent over time i.e.,
we do not find evidence for learning. We propose three possible explanations for
the existence and persistence of the pay-per-use bias in car sharing services. First,
we suggest that users underestimate their usage, perhaps driven by
overconfidence. Second, we propose that users have a preference for certain
features e.g., flexibility, associated with a pay-per-use tariff for which they are
willing to pay a premium. Finally, we show that the context, such as weather,
also increases the likelihood of a pay-per use bias.
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INFORMS MARKETING SCIENCE – 2018 SC05

2 - What Marketing Metrics Should Investors Demand? Optimizing 2 - Charity Premium: the Spillover Effect of Cause Marketing
Input Data for Models of Trial and Repeat Purchase Behavior Yanyan Li, Columbia University, 320 West76th Sreet, Apt 5B,
Daniel McCarthy, Emory University, Atlanta, GA, United States, New York, NY, 10023, United States, yl3220@gsb.columbia.edu,
daniel.mccarthy@emory.edu, Peter Fader Xueming Luo, Bo Xu
We study the question of what customer data maximizes the statistical recovery of Current studies of cause marketing are primarily focused on the focal effect of
underlying processes for the trial and repeat purchase behavior of customers. This cause marketing on the charitable brand, which refers to the effect of cause
question has important policy implications as investors, regulators, and other firm marketing on increasing customers’ purchase of the charity participating brand.
stakeholders increasingly turn to customer-based corporate valuation (CBCV) However, for big sellers, such as the electronic commerce retailing companies,
methodologies as a way to reduce investor uncertainty about future firm cash there are often many different brands and categories of products for sale. Cause
flows. While the underlying data that is required to perform CBCV for marketing by certain brands may lead to spillover effects on other products. In
subscription-based firms is both relatively common and well-established, far less is this study, we focus on the spillover effects of cause marketing on customers’
known about the corresponding data requirements for non-subscription firms. purchase decision of other products and categories of the focal charity
Our work concludes that a small collection of relatively common customer data participating brand. We used data from a big e-commerce company in China,
disclosures is needed to efficiently statistically identify the underlying parameters which conducted cause marketing campaigns for certain product brands in the
of a collection of models summarizing the propensity of customers to be acquired last year, and found that cause marketing has positive effect on purchase quantity
and make repeat purchases with a firm, as well as how much spend is associated and spending of the focal brands. Interestingly, we found that cause marketing
with each of those purchases. To maximize the statistical recovery of model significantly increases product variety seeking, encourages new product adoption,
parameters, we use “indirect inference,” a generalized method of moment’s and decreases consumer price sensitivity of the charitable brands. We further
procedure, to carry out model estimation. showed that the new product adoption is mainly due to the spillover effect from
totally new product categories and new brands.
3 - Customer-based Valuation for Contractual Firms Using Internal
Company Data 3 - Walking a Fine Line: Customer Retention in Mobile App Targeting
Elliot Oblander, University of Pennsylvania, Philadelphia, PA, Xinying Hao, PhD Student, The University of Texas at Austin,
United States, Elliot.Oblander.wh17@wharton.upenn.edu, 2501 Lake Austin Blvd Apt C207, Austin, TX, 78703, United
Daniel McCarthy States, xinying.hao@mccombs.utexas.edu, Zhuping Liu,
Vijay Mahajan
We present an application of customer-based corporate valuation (CBCV) for
subscription-based firms whose internal transaction log and CRM data are We address a common pitfall largely neglected in mobile app marketing -“over-
available. This problem setting contrasts with that of the previous two projects in targeting”. Theoretically, we conceptualize three different types of over-targeting
that it is applicable for subscription-based firms instead of non-subscription-based commonly seen in mobile app marketing: (1) over-precision (2) over-exposure,
firms, and richer, more granular data are available to the modeler, allowing for far and (3) over-saturation. Empirically, we propose a Bayesian Hidden Markov
richer specifications for our customer retention and spending models. We use the Model to quantify how the targeted push notifications based on their past
model to study the unit economics of newly acquired users, as well as how the behavior (i.e. behavioral-based push) and push based on their current location
valuation of customers evolves across acquisition cohorts and customer (i.e. location-based push) can affect the mobile users churn, retention and re-
acquisition channels. engagement in the context of mobile CRM (Customer Relationship
Management). With the help of mobile tracking technologies, we utilize a unique
mobile dataset containing granular user-level data, where multidimensional
churn behaviors (i.e. opt-out of push notification, turn off location-based service,
n SC05 or uninstall the app) can be observed. The nonlinear (“inverted U-shaped”) effect
of push notifications helps mobile app publishers answer a practical question -
Room 232, Alter Hall “when do you reach the over-targeting for each mobile customer?” - in designing
Mobile, Algorithm, and Artificial Intelligence (AI) the optimal push scheduling system.
Session 8: Cross-channel Targeting 4 - Usage Externalities in Two Sided Competitive Mobile Loyalty
General Session Program Platforms: Influence of Seller Location and Reward
Program Design
Chair: Xueming Luo, Temple University, Philadelphia, PA, 19122, Rajkumar Venkatesan, University of Virginia, 100 Darden
United States, luoxm@temple.edu Boulevard, Charlottesville, VA, 22903, United States,
Co-Chair: Yanyan Li, Columbia University, New York, NY, venkatesanr@darden.virginia.edu, Joseph Pancras
United States, yl3220@gsb.columbia.edu We investigate the effect of two seller factors, spatial location, and reward
1 - How Mobile Self-Scanning Use Influences Consumers’ program design, on buyer usage of a two sided platform of loyalty programs.
Grocery Purchases Novel aspects of the platform include the integration of online buyer search with
buyer’s transactions across several competing sellers’ brick and mortar stores. We
Kusum L Ailawadi, Tuck School of Business at Dartmouth College,
leverage these aspects to investigate the effect of spatial co-location and design of
100 Tuck Hall, Hanover, NH, 03755, United States, offers by the sellers on buyer’s platform usage, which includes store search, store
kusum.l.ailawadi@dartmouth.edu, Anne ter Braak, Lien Lamey, incidence, and reward redemption. We utilize data provided by a mobile
Maya Vuegen application that allows sellers to offer points based loyalty programs, utilizing a
Mobile self-scanners allow consumers to scan items while they shop, easily keep sample of households and retailers in a small US city. Buyers collect points and
track of prices and total spending, and go through an expedited check-out redeem rewards at each seller’s store independently. We jointly model buyer store
without having to unload their groceries at the check-out counter. Retailers have search, store choice, trip spending, and reward redemption behavior. Spatially co-
been cautious in pushing this technology as the impact on purchase behavior is located sellers on the platform observe higher incidence in their brick and mortar
not clear. We study the effect on several aspects of grocery purchase behavior stores but lower search on the mobile platform. Search for reward and store
including total spending, private label purchases, and promotion use, while information, and reward program design have a stronger effect on reward
controlling for the potential endogeneity in shoppers’ decision to use the mobile redemption than the dynamics of point accumulation. Further, redemption
self-scanner. We use Dutch household scanner panel data covering all major benefits from a store has the highest effect on store choice. Rewards with higher
retailers that offer the technology, along with information from a brief household thresholds, a narrower range of monetary value among the different rewards, and
survey. Two mechanisms for influencing purchases come into play when shoppers a larger number of rewards increases reward redemption among a store’s loyal
use a self-scanner: (i) increased price salience due to real-time spending feedback buyers. However, buyers tend to search less for rewards with higher thresholds,
and (ii) divided attention caused by the additional task. The impact of these and search less for stores with a narrower range of points. Our research highlights
mechanisms may differ across shoppers and stores, and may wear out as shoppers several tradeoffs that sellers, and platform providers need to consider to improve
gain experience with the technology. Among shoppers whose prior experience usage externalities of buyers on two sided mobile loyalty program platforms.
with the technology is limited, our results reveal a role for both mechanisms but
more so for spending feedback. Such shoppers buy fewer items in total and
expend a lower share of their promotional buying on “low-need” categories when
they use the mobile self-scanner, suggesting that retailers should be concerned
about potential negative sales effects. As experience with the technology
increases, however, these effects change. The effects also vary with price
sensitivity and familiarity with the chain.
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n SC06 4 - Effects of Complex Multimedia Advertising Campaigns –

An Automated Model for Big Data
Room 234, Alter Hall Pengyuan Wang, University of Georgia, 150 W Broad St, Apt 541,
Athens, GA, 30601, United States, deezephel@gmail.com,
Big Data - Brands Guiyang Xiong, Wei Sun, Jian Yang
Contributed Session Marketers increasingly combine online and offline media outlets to launch
Chair: Pengyuan Wang, 150 W Broad St Apt 541, 150 W Broad St, multimedia campaigns. However, it is unclear whether multimedia synergy exists
Apt 541, Athens, GA, 30601, United States, deezephel@gmail.com and how to maximize their performance. This study introduces a tree-structured
model to examine the effects of complex multi-dimensional ad treatments. It is an
1 - Personalizing Brand Communications in Social Media end-to-end framework suitable for big data, which effectively corrects for
Kihyun Hannah Kim, Rutgers University, Newark selection bias, automatically identifies informative consumer features, and
and New Brunswick, NJ, 07102, United States, performs automated data-driven consumer heterogeneous treatment effect
kh.kim@business.rutgers.edu, Soo Hyun Cho, Denish Shah estimation. We test the model with simulations and apply it to a large dataset
involving around seven million consumers and four thousand covariates,
The practices of connecting with customers individually and sending personalized demonstrating its unique ability to help marketers extract useful information
messages to boost customer engagement have both featured prominently in the from the ocean of data and improve multimedia ad decisions. Empirical findings
customer and brand management literature. However, many of these shed new light on the nonlinear effect of repeated ad exposures in the
customizations still rely on information related to customers’ demographics and multimedia context, how such effect varies across consumer groups, and the
past behaviors. While the identification of individual differences based on contingent existence of multimedia synergy. The results also highlight that,
consumer personality indicators has received relatively less attention in the without accounting for selection bias and measuring the heterogeneous effects of
marketing field, social science and psychology studies have highlighted the multi-dimensional treatments across consumers, managers are likely to have
importance of personality in the context of interpersonal communication. In this distorted understanding of multimedia ad performance, and the resulting
research, we study how brands can deliver personalized communications catering decisions will lead to waste of resources and loss of revenue.
to their consumers’ personalities in order to enhance customer engagement on
social media. By tracking brand-initiated communication and user-level
communication history on social media, we empirically quantify the impact of
two types of message customization strategies: messages based on 1) the
established brand personality and 2) user personality as manifested in customer
n SC07
engagement. We accomplish this through two studies: (i) Application of an Room 237, Alter Hall
econometric model to analyze how similarities in the message styles between
brand and user personalities affect customers’ responses in social media and Strategic Marketing
(ii)Analyses of the “matching” effect of personality similarity in brand-consumer Contributed Session
interactions by using machine-learning algorithms. Our proposed model will
enable marketers to improve personalization of brand communications and hence Chair: Longxiu Tian, University of Michigan, 1042 W Summerfield
increase customer engagement in social media. Glen Cir, Ann Arbor, MI, 48103, United States, longxiu@umich.edu
2 - Vector Space Models of Brands 1 - Consumer Response to Chapter 11 Bankruptcies
Oliver Borchers, University of Mannheim, L5,1, Room 0.02, Cem Ozturk, Assistant Professor of Marketing, Georgia Institute of
Mannheim, 68131, Germany, borchers@bwl.uni-mannheim.de, Technology, 800 West Peachtree St. Nw., Office # 4427B, Atlanta,
Sabine Kuester GA, 30308, United States, Cem.Ozturk@scheller.gatech.edu,
Pradeep Chintagunta, Sriram Venkataraman
Brand similarity measurement is a tool frequently used in marketing research to
analyze customer perceptions and competitive positionings. For these When financially distressed firms have overwhelming debts, a prominent option
measurements customers are asked to rate pairwise similarities of brands on a for survival is to file for Chapter 11 bankruptcy protection. We empirically study
Likert scale, an approach which is subject to several limitations. Firstly, the set of the effect of Chapter 11 bankruptcy filings on the unit sales of the competitors of
brands needs to be defined a priori. Secondly, similarity surveys are only bankrupt firms in the U.S. auto industry. The demand for competitors could
applicable to small markets with few brands. Thirdly, response patterns may increase as they may benefit from the distress of the bankrupt firm (competitive
emerge if the brands are unknown to the subject. Fourthly, a survey does not effect). On the other hand, competitors could experience lower sales if the
reveal the context which causes brands to be perceived similar. To address these bankruptcy negatively affects consumers’ beliefs about the industry in general
limitations, we analyze customer reviews using skip-gram with negative (contagion effect). To identify the effect of bankruptcy filings, we make use of a
sampling. This language model learns word vectors by predicting surrounding temporal discontinuity in treatment (i.e., bankruptcy filing), along with an
context words. Two variations, word2vec (Google) and its extension fastText extensive set of control variables. Such a design is facilitated by a unique data set
(Facebook), are trained and tuned on 58 million Amazon reviews. The models are at the dealer-model-day level which allows us to compare changes in unit sales in
empirically benchmarked on linguistic similarity and analogical reasoning tasks close temporal vicinity of the filings. Our results suggest a dominant contagion
against the state of the art. Brands with a similar linguistic context can then be effect for the competitors of bankrupt manufacturers. We explore several possible
identified by computing the Pearson correlation between their learned vector mechanisms for the dominant contagion effect. Our study aims to inform
representations. T-distributed stochastic neighborhood embedding is used to policymakers and managers about consumer-related consequences of Chapter 11
project these vectors onto a two dimensional plane. Without any a priori bankruptcies.
knowledge the resulting competitive map clearly visualizes the underlying disjoint 2 - Reducing Uncertainty in Consumer Credit Score Forecasts via
market structure over multiple categories (e.g. beauty, photography, watches,
beverages, and sunglasses). We enhance our understanding by providing further
Bayesian Nonparametric Data Fusion
analyses of the associative vicinity of a brand, highlighting related terms (e.g. Longxiu Tian, Doctoral Candidate, University of Michigan,
products and attributes). Finally, we propose empirical designs to validate the 701 Tappan Ave, Ann Arbor, MI, 48109, United States,
results and discuss the implications for brand similarity measurement and longxiu@umich.edu, Linda Court Salisbury, Fred M Feinberg
competitive positioning. Credit scores play a vital role in reducing the risk of lending, insuring, and renting
3 - Social Competition of Fashion Brands on Instagram to consumers. Accurate scoring aids financial and other institutions, who rely on
Tawei (David) Wang, DePaul University, 1 East Jackson Blvd, a portfolio of interrelated credit scores to vet prospective customers and set
attractive risk premiums. Like all forecasts, credit scores are vulnerable to data
DePaul Center 6028, Chicago, IL, 60604, United States,
missingness, such as unbalanced, incomplete, or thin credit files. These can in
wang131@gmail.com, Yusan Lin turn lead to non-random gaps in the score history that reduce the reliability of
Since Instagram started its service about 7 years ago, it has been a popular social the scores as metrics to target profitable borrowers and identify cross-selling
media outlet for all kinds of fashion brands. For instance, Nike, Victoria’s Secret, opportunities for financial products and services. To address this problem, we
H&M, and Louis Vuitton all have more than 20 million followers on Instagram in develop a Bayesian nonparametric data fusion model to impute credible intervals
2017. Another example, in the month before the London Fashion Week in 2016, for gaps in individual score histories within a portfolio of dynamically and
there were more than 5,500 posts with #LFW2016 on Instagram compared to contemporaneously interrelated scores. We apply this model to novel data from a
only about 1,100 Twitter mentions in the same period. These pieces of anecdotal leading credit bureau on scores for a segment of the U.S. population from 2011-
evidence suggest that Instagram has become a crucial part of fashion brands’ 2015, along with credit file decision attributes used to generate them. To address
competing fields. In this study, we explore (1) the information posted by fashion the high-dimensionality of both the model and feature spaces, we apply the
brands and (2) the competitive actions (both action timing and types of actions) “Gaussian Integral Trick” to decorrelate prior distributions, enabling scalable and
taken by fashion brands in the context of Instagram. We collected Instagram posts efficient estimation using stochastic mean-field variational inference. We find that
by 480 fashion companies across a two-year period, and find that the more credit score portfolios with imputed missingness are more accurate in predicting
consumers two fashion companies share, the more frequently they take actions to consumer delinquencies and bankruptcies than existing scores.
respond each other’s signals. Our preliminary findings would sketch the
competitive landscape on Instagram for fashion brands and provide managerial
implications when forming social media strategies.
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Consumer Decision-Making – Signaling & Influences Promotions & Reward Programs
Chair: Yingge Qu, Mississippi State University, 2212 5th Street, #410, Chair: Anthony Koschmann, Eastern Michigan University, 7415 Willow
Meridian, MS, 39301, United States, yqu@meridian.msstate.edu Creek Dr, Ypsilanti, MI, 48197, United States, akoschma@emich.edu
1 - Time to Next Member’s Travel Booking: A Shared Frailty 1 - Premium Private Label Sourcing from a Dual Brander:
Approach to Account for Member’s Specific Unobserved Factors Competition and Negotiation
Mouna Sebri, Assistant professor, Sherbrooke university, 2500 S. Chan Choi, Professor, Rutgers Business School, 100 Rockafeller
Boulevard de l’Université - Immeuble K1, Sherbrooke, QC, J1K Road, Piscataway, NJ, 08854, United States, chanchoi@rutgers.edu
2R1, Canada, mouna.sebri@usherbrooke.ca As private labels become proliferated, more retailers are introducing premium PLs
Within a coalition loyalty program where an airline company is a major source of that oftentimes replace marginal national brands. A premium PL can be sourced
members’ accumulation as well as an attractive choice in terms of rewards, either from the NB manufacturer who wants to utilize excess capacity or from a
tracking every travel opportunity from the member perspective is crucial for both dedicated PL manufacturer who can produce a high-quality imitation. It is natural
the airline company and the loyalty program sustainability. Determining flight- to assume that the PL from the former source is identical to the corresponding NB
booking pattern in the travel industry is crucial to divert flight opportunities from except for the branding and packaging. In this paper, we examine a retailer’s
competition and support the airline share of wallet in the loyalty program. The problem of tiered PL sourcing, in which a premium PL is supplied by the NB
key challenge of such non-contractual setting, is how to differentiate those manufacturer (dual brander), and an economy PL is supplied by a dedicated PL
travelers who have ended their relationship with the airline company without supplier. We decompose the value of a product into three components: the NB’s
informing them and without necessary expiring from the loyalty program from brand equity, the retailer’s reputation, and the intrinsic quality of the NB. In this
those who are simply in the midst of a long hiatus between travels. We develop a distribution channel, the NB’s wholesale and retail prices are determined by the
model to predict future traveling patterns for a customer base that can be traditional bilateral Nash game. However, the premium PL’s transfer price is
described by these structural characteristics. A shared frailty model that accounts determined through a profit-sharing negotiation between the channel members.
for member’s specific unobserved factors is proposed to accurately predict the From an equilibrium-negotiation solution, we derive profit implications of each of
time to next travel with the airline company at the member level. Travel bookings the value components as well as the negotiation power of the retailer.
at various future time windows are predicted to better adapt campaigns objectives Interestingly, even if the retailer holds a strong negotiation power, we find it
and allow sufficient lead-time for marketing actions. optimal for the retailer to leave some chips on the table for the NB manufacturer.
2 - The Impact of Future Event Markers on Intertemporal Decision 2 - Optimal Pricing of Points in Points Plus Cash Reward Programs
Among Different Decision Makers Ricardo Montoya, University of Chile, Republica 701, Santiago,
Jessy Zhang, Tongji University, Shanghai, China, 8370439, Chile, rmontoya@dii.uchile.cl
1608997300@qq.com Customers in Reward Programs (RPs) typically accumulate points for their
Intertemporal decision is a normal decision-making process happened in purchases that can be redeemed later for rewards. Recently, some RPs offer the
consumers’ daily lives. It’s about a two-dimensional choice between conserving option of combining a customer’s points with cash to redeem them for products in
waiting time and harvesting bigger future profit. Although many scholars have a Points Plus Cash (PPC) frame. The cash in this scheme helps to buy the needed
studied the influential factors in intertemporal decision process from the points to complete the full-point equivalent needed to redeem for the reward.
perspective of decision-making framework, the impact of planned future event The price of these points need to be determined by the company considering
markers on intertemporal decision-making is seldom studied, which can be various factors such as the consumers’ consumption heterogeneity and
exactly observed from real life. This paper tries to explore the different effects of willingness to pay for the points, the value of the product, and the cost of that
event markers on intertemporal decision across different time-perspective product. The goal of this research is to determine the optimal price in a PPC
decision makers using experimental method: 1.For present-oriented decision scheme taking these factors into account. The proposed framework considers
makers, more events between a small-sooner and larger-later option will shorten differences in consumption rates and product valuations by customers that allow
their time perceptions and thus increase possibility choosing larger-later; 2.For a profit-maximizing firm to determine the optimal dynamic price. Our main result
future-oriented decision makers, more events between a small-sooner and larger- characterizes the optimal price as a function of the time remaining to the end of
later option will lengthen their time perceptions and thus increase possibility the selling horizon. We show that the price increases in time and decreases
choosing small-sooner. Findings in this study help to further understand regarding the number of points required to be redeemed for the product. Demand
intertemporal decision-making process and suggest consumers to make rational at the optimal dynamic price also increases over time. The optimal pricing
decisions by adaptive planning. uncovers three types of customers. A first segment prefers buying at the
beginning of the selling horizon, a second group prefers buying at the end of the
3 - Modeling Consumer’s Contractual Decision in a Continuous selling horizon, and a third group buys during the selling horizon. We use the
Innovation B2b Market with a Forward-looking Dynamic Approach developed framework to compare the proposed pricing strategy to other pricing
Yingge Qu, Assistant Professor, Mississippi State University, options such as constant pricing and also to explore extensions to our basic
2212 5th Street, # 410, Meridian, MS, 39301, United States, model. The analysis shows that the main results are fairly robust to different
yq40@msstate.edu, V. Kumar, Yi Zhao assumptions.
The technology service of cloud computing in the B2B market possesses several 3 - Consumer Response to Price and Promotions Before and After
features that challenge the service provider’s strategic decision making. First, B2B the Great Recession
buyers sign a contract when purchasing the service. Second, the firm’s pricing Anthony Koschmann, Eastern Michigan University,
strategies of the service ties to the length of the service contract that the 7415 Willow Creek Dr, Ypsilanti, MI, 48197, United States,
consumer signs. Third, to maintain advantages in the market, the service provider akoschma@emich.edu
needs to keep on improving the service-related technology. Last, the B2B buyer’s
decisions are more sophisticated and strategic when balancing the benefits and Previous research into the effects of recessions on consumer purchases have
the risks of the service contract. To address service provider’s concerns, we typically emphasized price sensitivity. Yet, price remains just one of the tools that
develop a structural modeling approach to address the following research firms use to encourage consumption during and after a recession. This study
questions: 1) how to quantitatively evaluate the B2B consumer’s contractual examines consumer response to types of promotions, such as price reductions
decision process in the continuously developing technology service market? 2) alone or price reductions in conjunction with another promotional device
when the service provider adjusts the technology adoption in the service, how (manufacturer coupons, weekly feature advertising, and in-store displays)
will the B2B buyer’s contractual decisions change? and 3) what is the optimal following the Great Recession. The severity of the Great Recession, from both its
pricing strategy for the service provider to maximize the contract revenue? Our depth and recovery, suggests consumers increased their purchase response levels
study has both modeling and managerial contributions. From modeling and exhibited an increasing rate of response to firms’ price and promotions well
perspective, we contribute to the forward-looking dynamic models by integrating after the Great Recession had passed (in this case, six years into the recovery).
three key features of the market, e.g. the B2B buyer’s dynamic contractual Using annualized U.S. consumer panel purchases from 1998-2015 for 581
decisions, the technology evolution and the firm’s pricing strategy, into one product categories, the results show that the Great Recession of 2008-2009
holistic modeling framework. More importantly, these key features are not altered the promotional trajectories of some product categories, but not
directly used as control variables or covariates in the utility function but universally. Different promotional types exhibited differential effects: the level of
integrated into the dynamic programming process as state variables determining price reduction and manufacturer coupon response increased, but feature
the contract-associated value. Our study also provides substantive insights. We advertising and in-store display response decreased among more product
address that, service providers need to realize that the technology evolution can categories than increased. Furthermore, the rate of response decreased for nearly
be both beneficial and risky to the service provider. By counterfactual analysis, we three-fourths of product categories for price reductions following the Great
identify an optimal pricing strategy to help the service provider optimizing the Recession; the interpretation is that consumer responsiveness to price reductions
contract revenue. ramped up prior to the Great Recession, and rate of response plateaued (or even
decreased) following the Great Recession.
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that time frame. Using a difference-in-difference methodology, for each artist who
died, we compare the daily physical (more material purchase) and digital (more
experiential purchase) album sales a week before death and a week after death to
Room 605, Alter Hall any living artist’s physical and digital album sales over the same period. We find
Digital Entertainment empirical support for our hypotheses - artists who died suddenly (e.g. accident,
suicide, etc.), highlighting the ‘uncertainty’ dimension of mortality, experienced a
Contributed Session significant increase in physical album sales relative to digital album sales; artists
Chair: Stan Renard, The University of Texas at San Antonio, One UTSA whose death was less sudden, more expected with an increase in time, (e.g. died
Circle, San Antonio, TX, 78249, United States, stan.renard@utsa.edu from terminal illness, old age, etc.), highlighting the ‘time scarcity’ dimension,
experienced a significant increase in digital album sales relative to physical album
1 - How Playlists Shape Artist Success on Spotify sales. We discuss managerial implications beyond the music industry.
Sean N. Bruggemann, Swiss Federal Institute of Technology,
Zurich, Switzerland, nbrueggemann@ethz.ch, Anand V. Bodapati, 4 - Beyond the Grave: Variables Contributing to Increased Music
Randolph E. Bucklin Consumption After an Artist’s Death
Stan Renard, Assistant Professor of Music Marketing,
How critical are playlists in determining artist success on music streaming The University of Texas at San Antonio, One UTSA Circle,
platforms such as Spotify? On-demand streams for music have grown by 76.4%
San Antonio, TX, 78249, United States, stan.renard@utsa.edu,
in 2016, reaching an all-time high of 252 billion streams (Nielsen, 2017).
Streaming services such as Spotify or Apple Music count 112 million paying Richard T. Gretz
customers and contribute to about a third of music labels’ total revenues. The recent passing of notable recording artists such as Prince, David Bowie, Tom
Listening to music via Spotify differs from conventional modes of music Petty, and Chuck Berry has generated a surge in music sales associated with those
consumption in that users rely heavily on playlists - i.e. self -or third-party artists. However, the impact of the death of these artists on the sales of other
curated collections of tracks: 50% of paying subscribers to Spotify use playlists on musicians is not well understood. We use a difference-in-difference approach to
every usage occasion and 90% of paying users have already listened to playlists at assess the impact of an artist’s death on 1) the sales of the artist’s albums and
least once (Music Watch, 2016). Playlists stimulate demand and popularity for songs, 2) the sales of living artists’ albums and songs in the same genre as the
those artists who are featured on them and can be a critical marketing tool for artist who died, and 3) the sales of living artists’ albums and songs in a different
popularizing artists’ musical products and brands. We quantify the effect of genre as the artist who died. We leverage a unique dataset where we observe
playlists on artist popularity by analyzing a weekly data set of tracks that were daily song and album sales (both physical and digital) for all artists who were on
added to or removed from Spotify playlists with more than 500,000 followers, in the Billboard Top 200 and/or passed away from January 1, 2015 through
the period ranging from July 2017 through January 2018. Our data show the December 31, 2017. For each artist who died, we compare that artist’s song and
track’s position within the playlist and artist popularity, which is a measure of the album sales several days before death and several days after to all living artists on
number of times the artist has been streamed relative to all other artists. Findings the market during that same period. We are able to identify what characteristics
from a disaggregated model with artist-week as the unit of analysis hint at both are associated with an increase or decrease in album and song sales due to a
contemporaneous and lagged effects of playlists on artist popularity. The effects fellow artist’s death. Our research has immediate applicability to the music
hold after controlling for artist heterogeneity through artist-level fixed effects and industry, however our results also apply more broadly to product portfolio
changes to the artist’s follower base. We additionally control for artist-specific management. Our distinctive setting allows us to obtain insight into the
changes to their popularity on an unrelated streaming platform (i.e. views on performance of other members of a product portfolio when there is an exogenous
YouTube). (and catastrophic) shock to one member.
2 - A Double-edged Offer: Gamers’ Opposite Responds to
Game Updates
Jihyeon Hyeong, Yonsei University, Seoul, Korea, Republic of, n SC11
erecniss@gmail.com, Kangjun Choi, Sujin Ko, Jaeyoung Lee,
Tae-Hyung Pyo Room 606, Alter Hall
This research aims to expand our understanding of game updates and offer Healthcare-Services
strategic plans for the game industry. In the game industry, game updates have Contributed Session
long been recognized as a classical way of motivating players with the
introduction of new game contents and rules. Despite this, scant research has Chair: Lu Liu, Syracuse University, 721 University Avenue, Syracuse,
examined whether updates substantively satisfy the nuts and bolts required for NY, 13244-2450, United States, lliu123@syr.edu
marketing actions— to see whether updates can positively influence gameplay. 1 - Insurer Competition and Premium Dispersion on
This idea, then, leaves the question of whether game updates are desirable even
Healthcare Marketplaces
to those players who are eager to consolidate their status in competition. It seems
counterintuitive given that competitive games, i.e. multiplayer games, usually Ming Lei, Purdue University, 403 W State Street, West Lafayette,
take advantages from competition among players, unlike noncompetitive games, IN, 47907, United States, lei40@purdue.edu, Qiang Liu, Ting Zhu
i.e. single player games. However, for players motivated by competition, we Affordable Care Act (ACA) introduced health insurance marketplaces that
expect that there might exist an unintended and even the exact reverse effect of provide ACA qualified health insurance products of various attributes with high
updates; players in high status would be discouraged by a new competition rule, subsidies as well as heavy regulations. This paper studies the impact of insurer
as it potentially threatens their dominance, and therefore may end up leaving the entry on insurance premiums in ACA marketplaces. We utilize the public data
game. For the empirical analysis of our research question, we collect the from federal run marketplaces and construct a panel of insurance premium and
individual play data from a game platform site and additional information on characteristics for all available plans in every county of 34 states. Our initial
games from the official game websites. Through developing a hazards model, we finding is consistent with previous literature in that insurer entry would lower
compare the probability of the individual playing the game after updates between premium for a specific type of plan. In addition, we find the premium dispersion
the two types of games and investigate the interaction effect of the players’ status between high quality and low quality plans increases with competition. We
and the game types on this probability. Our results show that updates increase the further explore possible mechanisms of this dispersion and discuss managerial and
probability of individuals playing multiplayer games less than single player games. public policy implications of our findings.
Furthermore, these results are derived from the trade-off between the opposite
behavior of players in high- and low status in multiplayer games: players in high 2 - The Effect of General Health Check on Healthcare Utilization:
status are less likely to play the game after the update, while players in low status Tackling the Self-selection Bias
are more likely to play the game after the update. We expect that our findings Sung Wook Yoon, KAIST, Seoul, Korea, Republic of,
provide new insights into the deliberate strategy on how to attract and retain suyoon0919@kaist.ac.kr, Duk Bin Jun, Sungho Park
players using updates.
The general health check is one of the most common preventive health care
3 - Do Musicians Sell More Physical Albums or Digital Downloads measures in many countries. This typically involves the visiting of general
After They Die? Uncertainty vs. Time Scarcity in Mortality Salience practitioners or healthcare institutions to detect disease and/or risk factors for
Bingxuan Guo, PhD Student, University of Texas at San Antonio, disease by healthy adults who do not feel ill. Researchers have examined the
5803 USTA Blvd, Apt 3308, San Antonio, TX, 78249, United effect of the general health check on various health outcomes and subsequent
States, bingxuan.guo@utsa.edu, Richard T Gretz, Stan Renard healthcare utilizations but the results are inconclusive. Moreover, many of the
reported results need to be interpreted with caution because of the self-selection
Terror Management Theory literature has focused almost exclusively on one issue. In this study, we propose an empirical approach which jointly models the
dimension of mortality - ‘uncertainty’ surrounding death. However, we postulate decision to obtain a general health check and healthcare utilization, tackling the
that there are additional dimensions, including ‘time scarcity’. We predict that self-selection problem by using the eligibility to obtain the health check for free as
when the ‘uncertainty’ dimension is salient, customers are more willing to make an instrumental variable. The eligibility has some exogenous variations by design
a material purchase compared with an experiential purchase, and vice versa and this helps us to partial out the effect of general health checks from the self-
when ‘time scarcity’ is salient. We argue that diverging effects are mediated by selection biases. We apply the proposed model to a large 12-year panel dataset
need for stronger material relationship and perception of ‘scarce-self’ provided by the Korean National Health Insurance Service. We find that
correspondingly. We test our hypotheses using a unique data set on the music participation in the general health check increases healthcare utilizations and
industry covering daily album sales from January 1, 2015 through December 31, ignored self-selection generates substantial upward bias in the estimates. We also
2017 for all artists in the billboard top 200 and all artists who passed away during find that the effect largely varies with several key demographic variables such as
100

income and gender. We perform a series of counterfactual analyses to predict the average revenues for the high-value segment; (3) coupons of different monetary
effects of potential policy modifications on the healthcare utilizations and public values result in an increase in consumer search that is invariant across segments.
costs. Our findings imply that targeted coupons work primarily through an advertising
effect, rather than a redemption effect. Further, the advertising effect is similar for
3 - Does Medicare Value Based Purchasing Program Influence heterogeneous customers in terms of the increase in consumer search. However,
Hospital Performance the coupon of higher monetary value results in higher conversions from search
Lu Liu, Syracuse University, 721 University Avenue, Syracuse, NY, for the high-value segment.
13244-2450, United States, lliu123@syr.edu, Amiya K. Basu,
3 - Mobile Coupon Acquisition and Redemption the Effects of Store
Dinesh Gauri
Clusters as a Double Edged Sword
Pay-for-performance, also called “value-based purchasing (VBP),” is a payment Ping Zhao, Assistant Professor, Marketing, Wilfrid Laurier
model that seeks to build an efficient, effective and patient-centered health care University, LH4002, Lazaridis Hall, 75 University Ave W, Waterloo,
service by offering financial incentives to healthcare providers if they meet
ON, N2L 3C5, Canada, pzhao@wlu.ca, Chun Qiu
specific performance goals. Previous research has examined the effect of using
VBP, mostly with a focus on clinical quality and safety, and these studies have Retailing literature has shown that store clusters play a pivotal role in retailers’
been criticized for the lack of appropriate control groups or previous trend data. store’s operations Nevertheless, many questions remain unanswered as to the
As a part of the Affordable Care Act of 2010 (ACA), Centers for Medicare & extent to which store clusters affect a store’s promotional outcome. In the era of
Medicaid Services (CMS) launched the first national level Medicare Hospital VBP mobile technology, smartphones have become a major distribution channel for
program, with a focus on four performance dimensions: safety, clinical quality, coupons; and store locations critically influence the effectiveness of mobile
cost efficiency and patient experience. In this research, we analyze the effect of marketing. From the information collected on 11,222 mobile coupons issued by
this VBP program on the four dimensions of health care performance through a 1,799 restaurants in Hangzhou City, China, the researchers of this study
difference in difference framework comparing exposed and non-exposed investigate how store clusters in the format of shopping centers affect coupon
hospitals. We use the state of Maryland as a natural control group, as the state, acquisition and coupon redemption. As a result, the study identifies store clusters
and not Medicare, determines hospital reimbursement rates, thereby exempting as a “double-edged” sword, in the sense that they affect coupon acquisition and
hospitals in the state from the Medicare VBP program. Our results show that the redemption in an opposite manner. Specifically, store clusters positively affect
VBP program did not have a significant effect on overall patient experience but in customer coupon acquisition but negatively influence coupon redemption. The
terms of dimensions of health care service, it prompted hospitals to improve staff results are robust in different model specifications. The researchers also
responsiveness and cleanliness of environment. Also, the VBP program showed investigate the impact of coupon features on coupon acquisition and redemption,
no significant effect on clinical quality and safety measures. Finally, hospitals and they propose several managerial implications on mobile coupon promotions.
exposed to the VBP program showed improved cost efficiency and, in particular, a
significant decrease in cost per discharge.
n SC13
n SC12 Room 746, Alter Hall
Room 745, Alter Hall New Products and Innovation IV
Mobile Promotions Contributed Session
Contributed Session Chair: Ho Kim, University of Missouri-St. Louis, College of Business
Administration, 1 University, St Louis, MO, 63121, United States,
Chair: Ping Zhao, Wilfrid Laurier University, P2078 Peter’s Building, 75 kimho@umsl.edu
University Ave W, Waterloo, ON, N2L 3C5, Canada, pzhao@wlu.ca 1 - Giving Green to Get Green? Yes and No
1 - Maximizing Customer Lifetime Value through Strategic Channel Cheng He, Georgia Institutes of Technology, 800 W Peachtree
Management: How to Incentivize Customers to use Apps Versus Street, Atlanta, GA, 30380, United States, che31@gatech.edu,
Websites O. Cem Ozturk, Naiqing Gu
Gokhan Gecer, Doctoral Candidate, University of Mannheim,
The creation of a sustainable community through the adoption of green
Mannheim, Germany, ggecer@mail.uni-mannheim.de,
technologies has become an important topic for the society in the presence of
Florian Kraus, Florian Stahl global warming. Federal and local governments have tried to promote green
The mobile channel is different from other channels since at least one of the technologies through various incentive programs (e.g., HOV access privilege or
engaged parties isn’t at a fixed location and these parties can communicate at any tax credit). Research in the past decade has provided divergent views on the
time (Balasubramanian et al. 2002). The unique nature of mobile devices leads effectiveness of such programs. In this paper, we empirically study the impact of
customers to develop habitual interactions with firms (Wang et al. 2015) and as a government incentives on the adoption of green vehicles in the U.S. automobile
result, the customer lifetime value (CLV) of mobile channel users tends to become industry. To identify this effect, we take advantage of incentive changes in certain
larger than the CLV of other channel users. One of the main reasons is that users’ states and we employ a difference-in-differences approach. Our findings suggest a
order rates increase when they adapt to mobile apps, resulting in a higher net significant positive impact of incentives on the sales of green vehicles. We also
monetary value in total spending (Naarang and Shankar 2016, Wang et al. 2015). find heterogeneous consumer responses to different incentive programs.
Consequently, online retailers should encourage the customers to switch to Furthermore, we identify the impact of incentive programs on non-hybrid
mobile devices by offering a discount over mobile apps. The purpose of this article vehicles to investigate whether the change in sales for hybrid vehicles is due to
is to develop a modeling approach to answer the research questions below and market expansion or substitution from non-hybrid vehicles. Our findings shed
test the proposed model in a field experiment conducted with a commercial light on the effective use of government resources to encourage green technology
website. 1. To what type of customer should a discount over the mobile app be adoption.
offered?2. What is the optimal discount rate? Firstly, we conducted a lab
2 - Computer-aided Exploration Of Product Designs in
experiment to test the assumptions used for constructing the analytical model. In
the model, we apply to discounted expected transactions (DET) (Fader et al. High-dimensional Visual Spaces
2004) to calculate the CLV of a customer. It is based on the customer purchasing Yegor Tkachenko, Columbia Business School, 3022 Broadway,
probabilities over different sales channels. We compare the expected transactions 5R Uris Hall, New York, NY, 10027, United States,
in case a discount over the mobile app is offered versus the transactions if the ytkachenko21@gsb.columbia.edu, Asim Ansari, Olivier Toubia
discount is not offered. Our preliminary experimental and analytical results
Recent computer science research has demonstrated that deep generative models
provide us with insights on 1) how the components of the model change the
can be used to extract lower-dimensional representations from rich image data
DETs, 2) where the thresholds for “discount offers” can be expected, and 3) what
and to regenerate high-quality images from such lower-dimensional
the optimal discount rate should be. Based on our results, we derive various
representations. We argue that these deep learning techniques can be effectively
implications for researchers and managers.
used for computer-aided exploration of visual product designs, where alternative
2 - Targeted Coupons on a Heterogeneous Customer Base design methods, such as conjoint or brute-force search, may not be applicable or
Arun Gopalakrishnan, Assistant Professor, Washington University may perform suboptimally. In this work, we first confirm properties of the lower-
in St Louis, Olin Business School, One Brookings Drive, St Louis, dimensional (latent) space that are desirable if we are to use it to generate novel
product designs. Specifically, we show (a) how distance between images in this
MO, 63130, United States, agopala@wustl.edu, Young-Hoon Park
latent space mimics human similarity judgments about the actual images, and (b)
Coupons targeting customers based on their value are common in practice as an that important characteristics of interest, such as product prices, can be predicted
efficient means of influencing consumer search and purchase behavior. Little from latent image data alone. Building on these findings, we propose and
research has examined why these coupons work and how the effects vary for a demonstrate machine learning techniques for exploration and ideation in the
heterogeneous customer base. We evaluate the causal impact of targeted coupons design space, such as image interpolation to generate product designs that are
on consumer search, redemption, and purchase behaviors using data from a similar to competitor’s products, or constrained Bayesian optimization to find
large-scale field experiment in which low- and high-value customers are exposed novel designs that score high on quantitative characteristics of interest. We use
to targeted coupons of different monetary values. We find that (1) coupons images and attributes of products sold on Amazon.com as well as human feedback
increase average revenues due to the increase in purchase incidence that does not from Amazon Turk workers as a basis for our experiments. The results of our
involve coupon redemptions; (2) coupons with higher monetary value increase work suggest that deep generative models offer a promising avenue for partial
101

automation of the visual product design process. longitudinal analysis of nearly 10,000 observations on 75 franchise systems across
all 50 US states relates growth in terms of change in number of outlets to
3 - User-friendliness as an Element of Product Design franchisors’ terminations of their franchisees. We synthesize insights regarding
Sumitro Banerjee, Associate Professor of Marketing, Grenoble the self-enforcing range of contracts with research on governance (ownership and
Ecole de Management, 12 rue Pierre Sémard, Grenoble, 38000, royalty rate) and clustering-based perspectives to assess the moderating role
France, sumitro.banerjee@grenoble-em.com, David Soberman played by ownership-based governance, royalty rate, and clustering in the
growth-franchisor terminations relationship. The system-wide financial
We analyze firm strategy to offer products with user-friendly design in markets
consequences of terminations are also assessed.
where consumers expend effort to consume products. Such a strategy requires a
firm to incur additional costs to acquire knowledge about aspects of consumer 2 - The Impact of Data Disclosure on Consumer Complaints
effort to utilize or consume their products, and acquire the ability to provide Resolution and Firm Performance
“user-friendliness” or “usability” as an element of their product design. We find Debjit Gupta, PhD. Student, Virginia Tech, 3600 Richmond Lane,
that both price and user-friendliness of products increase as product quality
Apt H, Blacksburg, VA, 24060, United States, debjit14@vt.edu,
increases when the firm cost of providing usability is high and decreases
otherwise. Since provision of user-friendliness is costly while product quality is Abhi Bhattacharya
free, the higher the product quality, the greater the relative impact on profits of To promote transparency in the financial marketplace, the federal government
the costly investment in user-friendly design by the firm. In contrast, when introduced the Dodd Frank act which made mandatory the disclosure of certain
provision of user-friendliness is also relatively cheap, the higher the product financial and customer data. On one hand, open access to such data could have
quality, the lower the relative impact of user-friendliness in firm profits. enabled consumers to access previously undisclosed information, and aid them in
Moreover, the higher the ability of consumers, i.e., the lower the consumer cost making smarter decisions. Further, it could have resulted in firms being more
of effort, the greater the firm profits and provision of user-friendliness in design. accountable for their actions and encourage them to adopt fairer practices
In a market consisting of both high- and low ability consumers, a firm offers two However, there is a lack of understanding whether and how such data disclosure
products: one with high user-friendliness at a high price, and the other with low impacted firm behavior and their subsequent performance, measured through
user-friendliness at a low price to discriminate between the two types of stock market, financial and customer based indicators. In this study, using a
consumers. Further, when consumers do not observe their own type before detailed dataset on a large number of complaints filed with a federal agency, we
purchase, the firm offers only one product with an intermediate level of user- empirically assess the impact of disclosure on complaint resolution on firm
friendliness at an intermediate price but an optional after-sales service at an performance. By analyzing the firm’s as well as the stock market’s response to this
incremental price that is consumed only by low ability consumers upon discovery disclosure of consumer complaints, we provide insights on how data disclosure
of their own type. impact the number of subsequent complaints and their resolution as well as the
stock market’s long and short term reaction to the same. Lastly, we discuss
4 - Discovering Different Processes for New Product Diffusion:
implications for public policies related to data disclosure based on our results.
Evidence from Online User Network Activities
Ho Kim, University of Missouri-St. Louis, College of Business
Administration, 1 University Blvd, St Louis, MO, 63121, United
States, kimho@umsl.edu, Juncai Jiang, Norris Ignatiius Bruce n SC15
While new product diffusion has been extensively studied, prior literature is silent Room 603, Alter Hall
on the hierarchy or stages involved in the process of product diffusion. This study
thus investigates the hierarchy of new product diffusion in a network platform. CB - Perception & Behavior
We proposed a framework in which product adoption involves three stages— Contributed Session
learn, feel, and do— and that these can be measured with online consumer
activity metrics. Using a dataset with 361 users and 1,256 projects from Scratch, Chair: Stephen Hood, Virginia Tech, 2852 Kelly Sq., Vienna, VA, 22181,
an online website where users create and share multi-media projects, we find United States, hoodste@vt.edu
that, although learn do feel is the most likely hierarchy overall, different 1 - How do Warm Background Colors Influence Consumers’
adoption hierarchies (including no hierarchy) prevail for different users’ projects.
Response Toward Anthropomorphized Products?
For instance, learn feel do is the most likely adoption hierarchy for some users’
projects, while for other users, feel do learn may be most probable. In addition, Mayuko Nishii, Waseda university, Tokyo, Japan,
we find that the author’s network characteristics and project characteristics mayuko.nishii@akane.waseda.jp, Takeshi Moriguchi
contribute to the product diffusion. Specifically, the author’s degree centrality and Zwebner et al. (2013) mention that consumers tend to perceive inanimate
has a strong positive effect on the diffusion of her projects. Interestingly, there products as anthropomorphized, so when they perceive physical warmth, they
exists a curvilinear relationship between project complexity and diffusion speed. feel emotional warmth toward products, which increases their intention to
purchase them. However, marketers cannot control the temperature that online
shoppers perceive. This research examines how the visual perception of warm
n SC14 background colors on online shopping sites interacts with the haptic perception of
products and the effect on product preference. Nevertheless, warm colors might
Room 607, Alter Hall not have physical warmth; thus, we assume that the effect of warm background
colors is greater in products that are anthropomorphized. We performed two
Marketing Strategy – Governance & Firm studies to examine the above hypothesis. In these studies, we conducted a 2
Performance (orange vs. white) × 2 (anthropomorphized products vs. un-anthropomorphized
products) between-subjects test. Inanimate products with warm and soft images
Contributed Session are easily anthropomorphized. Therefore, we tested the hypothesis by comparing
products usually perceived as warm and soft with products usually perceived as
Chair: Debjit Gupta, Virginia Tech, 3600 Richmond Lane, Apt H,
cold and hard in study1. To reinforce the findings of study1, we conducted study2
Blacksburg, VA, 24060, United States, debjit14@vt.edu using hand watches, which are considered cold and hard. However, Labroo et al.
1 - Franchise System Growth and Franchisor Terminations (2008) showed that a watch indicating 10:10 was recognized as a smiling human.
Moeen Naseer Butt, Assistant Professor of Marketing, Lahore Thus, we compared 10:10 with 12:00. The results supported our hypothesis. They
University Of Management Sciences (LUMS), Opposite Sector U, showed that warm background colors for products might affect consumers’ haptic
DHA Lahore Cantt., SDSB Building, Office 309, Lahore, 54792, perception and increase their evaluation of anthropomorphized products by
enhancing their familiarity with them. To emphasize products’ haptic
Pakistan, moeen.butt@lums.edu.pk, Kersi Antia
attractiveness to consumers on online shopping sites, marketers might have to
Franchising has always relied on a strident growth narrative. Yet, despite widely pay attention to the influence of background colors.
divergent claims, evidence regarding the consequences of franchise system
growth remains elusive. Whereas high system growth creates buzz and greater
revenues for franchisees, unfettered expansion may severely strain franchisors’
ability to maintain system standards and reduce franchisee motivation to remain
in compliance with their contractual obligations, likely resulting in higher
terminations by franchisors. The present study assesses the relational
consequences of franchise system growth in terms of franchisor terminations. Our
102
INFORMS MARKETING SCIENCE – 2018 SD05

2 - Before Color and Shape, Light is the Force that Drives 2 - Dynamic Duopoly Pricing with Observational Learning
Size Perceptions Amin Sayedi, Assistant Professor of Marketing, University of
Itrat Batool, PhD Student, Australian National University, CBE Washington, Seattle, Seattle, WA, United States, aminsa@uw.edu
Building, 26C Kingsley Street, Acton ACT, Canberra, 2601, We look at the problem of dynamic pricing in a duopoly with observational
Australia, itrat.batool@anu.edu.au learning. Prior literature shows that when the number of customers in a
One stream of marketing literature states that it’s the dimensions of the shape monopoly is sufficiently large and the monopolist is sufficiently patient, a cascade
that influences size. Recent evidence suggests that the saturated color has more always happens; furthermore, the probability that the cascade is wrong, i.e.,
potential to increase the perception of the size of the product regardless of the customers get negative ex post utility, is always positive. In contrast, we show that
shape. However, shape has normally been granted as a high level visual feature in in a duopoly with dynamic pricing, there are equilibria in which no cascade
past research. Despite the remarkable research in color and shape, there is an happens. More importantly, we show that no sub-game perfect equilibrium of the
important gap that needs to be filled about the way color and shape plays the role game has a wrong cascade. Our results could explain why, in practice, cascades,
in size perceptions.Current study argues that in the competition between color and specifically wrong cascades, are not as common as theory has predicted.
and shape, there is yet another phenomenon that alters both of these features in 3 - Aiming for the Goal: Contribution Dynamics of Crowdfunding
the visual scene. The fundamentals of light and its reflection on the saturated-
Aniko Oery, Yale School of Management, 165 Whitney Avenue,
object may alter both the surface and sides of an object. For example, one cannot
negate the possibility of light influencing a saturated object to an extent that the New Haven, CT, 06520, United States, aniko.oery@yale.edu,
object appears to have different levels of saturation in parts. However, this cannot Joyee Deb, Kevin Williams
be fully confirmed until or unless the dimensions of the shape are taken into We study the contribution dynamics in reward-based crowdfunding campaigns
consideration. This is because light would shine brightly on the surface or the arising from backers with different incentives. Donors just want the project to
sides of the saturated object that it faces. However, different dimensions of the succeed while buyers just want the product offered. With novel data collected
shape such as depth, width and height reflect light and produces shadows from the platform Kickstarter, we show how donations play a critical role in the
differently.To test these propositions, the current study intends to conduct three ultimate success of some projects. Motivated by the institutional details of
experiments. The first experiment will test the effect of light (four spotlights vs. crowdfunding platforms, we develop a theoretical model of crowdfunding to
two spotlights) on a shape. For example, how height, width and depth of a highly study the interactions between buyers and donors. We show that the equilibrium
saturated object respond to different lights. The second experiment will test the characterization and predictions are consistent with our empirical findings. We
effect of light on attention using color-saturation as a moderator. Different levels use the model to decompose the importance of buyers and donors on the
of color-saturation will be used to test the effect of light on shape. The attention probability of success. Finally, we extend the model to allow for learning about
will be recorded through an eyetracker. The third experiment will examine which product quality.
of the objects participants felt was larger. Outcomes from the study are expected
to be valuable to color/shape research. The expectations are to show that beyond 4 - Searching for Service
color and shape determining the size; there is yet another feature that is the T. Tony Ke, MIT, 100 Main St, E62-535, Cambridge, MA, 02142,
driving force and that is light. United States, kete@mit.edu, Maarten Janssen
3 - Auction Characteristics as Drivers of Willingness to Pay Since Telser (1960), there is a well-established argument that firms in a
Stephen Hood, PhD Student, Virginia Tech, 2852 Kelly sq., Vienna, competitive market will not provide service as it is optimal to free-ride on their
VA, 22181, United States, hoodste@vt.edu, Dipankar Chakravarti competitors. The freerider argument is used to argue in favor of resale price
maintenance. Our paper shows that the free-rider argument critically depends on
Auctions are “participative pricing” mechanisms in which buyers and sellers reach the absence of search frictions. If consumers do have a positive search cost, the
a final exchange price using a structured process. In ascending auctions, market may well provide service if the cost of doing so is not too large compared
competing buyers bid up a good’s price in steps. Bidders exit from the auction to consumer benefit. However, higher search friction does not always make the
until just one bidder remains and wins the good at the final bid level. Economic equilibria with service provision more likely to emerge. Generally, when
theory argues that the exchange price for a good reflects the amount that the equilibria with service provision exist, service provision is socially optimal, but the
buyer (seller) is willing to pay (accept) for it. The revenue equivalence theorem reverse does not hold true. Firms that provide service and those that do not can
asserts that this WTP (WTA) value should be attained regardless of the auction co-exist in the market, and consumers direct their search to service-providing
mechanism (Klemperer 1999). Yet, studies show that behavioral factors (e.g., firms first to obtain service, and then to non-service providing firms later to enjoy
bidder mindsets) influence the final bid price and post-auction assessments a lower price. The optimal level of product commonality balances demand
(Cheema et al. 2012, Herschlag and Zwick 2003). This paper argues that greater cannibalization and informational complementarity.
“transactional intensity” (bidding pace) during an ascending auction can increase
experienced thrill. Thus, the desire to win a faster paced auction should raise a
bidder’s WTP. Moreover, the composition of the bidder population (i.e.,
proportion of professional resellers versus amateurs) can influence challenge and n SD05
raise WTP. Thus, the desire to win an auction populated by a higher proportion of
professional resellers should induce a higher WTP. However, experienced Room 232, Alter Hall
satisfaction from winning a fast paced auction may not endure. The higher WTP
will dissipate quickly, eliciting post-auction regret. In contrast, satisfaction from
Mobile, Algorithm, and Artificial Intelligence (AI)
winning an auction populated by a higher proportion of resellers should endure Session V: Technology Effect on User Decision
and elicit little regret. We test these predictions experimentally, recruiting General Session
participants from a web-panel and engaging them in custom designed ascending
auction simulation. Chair: Xueming Luo, Temple University, Philadelphia, PA, 19122,
United States, luoxm@temple.edu
Saturday, 3:30PM - 5:00PM

Co-Chair: Lin Boldt, Clark University, Worcester, MA, 01610,
United States, lboldt@clarku.edu
1 - The Effect of Free Promotion on Online Digital Retailers
Lin Boldt, Clark University, 950 Main Street, Worcester, MA,
n SD03 01610, United States, lboldt@clarku.edu
Free sample promotion is an effective method to attract new customers, introduce
Room 34, Alter Hall new products, and generate incremental sales. Although used widely in the
Analytical Advancements in Marketing industry, the literature on free sample promotion is sparse. Most of the prior
research on free sample promotion has been focused on the effects of free sample
General Session promotion on physical goods or retailers that sell physical goods. Literature has
Chair: Aniko Oery, Yale School of Management, New Haven, CT, found that free sample promotion has both positive effect (short-term and long-
term effect) and negative effect (cannibalization effect). Free sample promotion of
06520, United States, aniko.oery@yale.edu
one product could lift the sales of related products in the same category in the
1 - Flash Pass short run. The present study explores the effect of free promotion on online
Yuichiro Kamada, UC Berkeley, Berkeley, CA, United States, retailers that sell digital experience goods, e.g., Amazon Video and iTunes Store.
y.cam.24@gmail.com, Zihao Zhou Digital experience goods are different from physical goods in two ways: digital
experience goods typically offer free samples (e.g., movie trailers) prior to
We consider a contract-design problem of theme parks. Specifically, customers can purchase and digital experience goods do not need to be replenished. These
pay extra fees to purchase a ``flash pass,’’ under which they would line up for a differences may lead to the conclusion that offering free promotion on top of the
less amount of time to enjoy attractions. The exact amount of time for lining up free samples would not be profitable for online digital retailers. We conducted a
depends on the overall distribution of customers at each pass type. We field experiment on an online book reading platform. We find that although free
characterize the optimal menu of contracts, and analyze how the information promotion did not have an effect on purchase at the time of promotion, it was
customers possess regarding the overall customer distribution affects the optimal associated with a sales increase within four weeks after the promotion. In
number of pass types. addition, free promotion led to an increase in the discovery of related new
products at the time of promotion. Our findings suggest that free promotion does
not have a cannibalization effect, but has an expansion effect for online digital
retailers.
103
SD06 INFORMS MARKETING SCIENCE – 2018

2 - Online Search and Purchase Likelihood: Direct and Switching
Effects of PC vs Smartphone n SD06
Meheli Basu, University of Pittsburgh, 5820 Elwood Street, Apt 33, Room 234, Alter Hall
Pittsburgh, PA, 15232, United States, meb209@pitt.edu
Big Data - Consumer Decisions
Most online retail websites can be accessed by consumers through multiple
devices, namely, personal computer (PC) or mobile devices such as smartphone Contributed Session
and tablet. Hence, how device type modifies consumers’ online decision making is Chair: James Reeder, Purdue University - Krannert School of
important in understanding the implications of consumers transitioning between
Management, 403 West State Street, West Lafayette, IN, 47904,
multiple screens. Our research seeks to address this important question. Our goal
is to integrate search behavior of consumers on mobile and PC into quantification United States, jreederi@purdue.edu
of drivers of consumers’ purchase behavior across devices and specifically focus 1 - A Exploratory Research on the Relationships Between the Pattern
on the following dimension of consumer archetypes: browsing vs buying (focused of Clickstream and Buying Decision
on device selection). Device-specific effects on online path to purchase are studied Chi-cheng Wu, Professor, National Sun Yat-sen University,
by analyzing “big” data from the StubHub ticket exchange website over the 70 Lien-Hai Road, Kaohsiung, 80424, Taiwan,
course of three years. We track user movements between different search and
chicheng@mail.nsysu.edu.tw, Yung-Jan Chou, TZE-YI Yang,
purchase pages and calculate how the probabilities of transition between web
pages vary for online users logged in from their personal computer vs their Fu Pei-wen
smartphone. We also seek to empirically establish the device (PC vs Smartphone) Previous studies hypothesized that the buying decision of consumers were based
of choice for search vs purchase for users on online retail channels. Another on a two-stage choice process in which consumers first select available products as
interesting research question in our exploration of differential effects of device consideration set or choice set, and then choose a single product from the subset.
selection is whether switching between different device types (i.e., use of multiple Earlier researchers have been put efforts to capture the choice process empirically.
devices) during search and overall path of product specific exploration leads to As Stage 1 choice was hard to be observed in the offline settings, previous studies
higher or lower purchase likelihood and how the device switching effect interacts mainly crafted the ways to capture the unobservable first stage; few of them
with the current device choice in determining probability of purchase in that focused on evaluating the effect of Stage 1 choice on Stage 2 decision. However,
session. Implications for research and practice are discussed. the recent availability of online click stream can help overcome the challenge of
unobserved Stage 1 choice. Moe (2006) used a clickstream data set to craft the
3 - Posting Fast and Slow: How Device Choice Influences the interdependences between choices within a stage as well as the use of varying
Information Content of Online Reviews? decision rules in each stage, which demonstrated the power of online clickstream
Nikolaos Korfiatis, University of East Anglia, Norwich Business data. Consequently, clickstream data have been used to explore lots of marketing
School, Thomas Paine Study Center 0.15, Norwich, issues (e.g., Olbrich & Holsing, 2011; Rutz & Bucklin, 2012). Besides, Hauser
United Kingdom, n.korfiatis@uea.ac.uk (2014) points that, when making a choice from many selections in a limited time
consideration set is a reasonable response in decision process. This implies the
The adoption of mobile devices as the primary way for consumers to review their
importance of consideration set in determine the final decision. The data set used
experience on the go stimulates a significant change on the aspects that
in this research was the customers’ clickstream and buying records of an
consumers choose to report on their review. While research has established the
anonymous European Retailer, collected from “RecSys Chllenge 2015”. By
influence of the rating environment on the information content and the valence
analyzing the clickstream data, we show that the longer the consumers view an
of online reviews, the actual influence of device choice (whether mobile or
item, the greater the chance they will buy the item. Besides, both repeat clicks
desktop) is relatively unexplored. Using recent advances in topic modeling and in
and first click items have a higher buying odd; however, the effect of the two
particular structural topic models we evaluate the influence of device use and
factors are not independent. Finally, this research demonstrated the effect of
temporal construals on the information content of online reviews. Structural
consideration set (Stage 1 choice) on final decision (Stage 2 choice). The results
topic models differ significantly from established machine learning approaches,
contribute to the literature of clickstream data and buying decision, as well as the
such as Latent Dirichlet Allocation, on the perspective that the allow the
two-stage choice model. E-commerce firms can design the ways of item
incorporation of covariates as a way to evaluate the prevalence of the topic
presentation based on this research to increase the buying chance of consumers.
distribution. Using a large corpus of more than 2 million reviews from an online
booking provider and controlling for review valence, reviewer characteristics as 2 - Leveraging Human Mobility in Social Interactions to Predict
well as the time between consumption and review publication, we evaluate the Customer Attrition and Social Influence
influence device use (mobile or not) on the distribution of topic prevalence. We Francisco Orlando Cisternas Vera, The Chinese University of Hong
show that device choice has a significant influence on the themes that consumers
Kong, 12 Chak Cheung Street, Cheng Yu Tung Building, 11/F,
use to describe their experience with more concrete topics been present in the
reviews coming from mobile and more abstract topics on reviews coming from Hong Kong, Hong Kong, fcisternas@cuhk.edu.hk, Chu (Ivy) Dang,
other devices. Our results have implications for theory and practice as they help Jianmin Jia
explain discrepancies in review content beyond the extensiveness of review Rapid technology developments have enabled firms—for example, Facebook,
length. Uber, Fitbit and many apps in smart phones like WeChat/WhatsApp—to learn
4 - Ripple Effects: Using Firm-Generated Content for about their customers’ behaviour in multiple dimensions such as consumption
patterns, social interactions and their physical location. However, the
Movie Promotion development of methodologies to get customers insights from multiple big data
Isaac Dinner, UNC-Chapel Hill, McColl 4517, Chapel Hill, NC, sources has not followed the same speed. In this research, we propose a new
27599-3499, United States, isaac_dinner@kenan-flagler.unc.edu methodology leveraging machine-learning and business analytics to integrate
In the movie industry marketers are increasingly using social media to generate multiple big data sets enabling the discovery of new customer’s insights, which is
interest in new films. However, effective management of this media channel only possible by looking at the combined data. We utilize a proprietary phone
requires knowledge on whether and how firm-generated content (FGC) traffic data set with over two billion observations from which we reconstruct both
influences box office revenues. In this research, we empirically investigate two the customer social interactions and mobility patterns. We augment the customer
potential mechanisms through which FGC may drive sales. The first is a direct social network by incorporating human mobility as a new layer of customer
mechanism where users who see FGC directly drive revenue. The second indirect behaviour. We found that mobility patterns moderate the impact of social
mechanism, which we call the “ripple effect” of FGC, suggests that FGC may influence in the network. Moreover, we predict customer attrition and
increase movie-related user-generated content (UGC) that can drive movie consumption patterns, which translates into customer lifetime value. Preliminary
consumption of those who do not see the FGC. To study these mechanisms, we results show a significant improvement in prediction power when compared to
assemble a daily panel of 159 movies released by major studios over 18 months. traditional models in the industry.
We operationalize UGC as tweets including movie-specific hashtags and FGC as
tweets created by studio, actors, director and movie accounts. To test these
mechanisms we estimate linear panel models that account for endogeneity of firm
actions, unobserved heterogeneity, competition and advertising. We find that FGC
has a small, but positive and significant, effect on movie sales. Furthermore, this
impact of tweets on sales is fully mediated by UGC, supporting the indirect path.
We also find that the ripple effect of FGC is most pronounced for those created by
movie accounts rather than actors and studios. This work is of use to managers as
it suggests that movie executives should not focus solely on followers, but on
creating FGC that sparks conversations among users.
104

3 - The Impact of Promotional Email Design Elements on Customer for children that offers access to virtual games as a reward for time spent
Conversion. Insights from a Large Scale Field Study studying. To explain usage decisions by children, we adapt the multiple discrete-
James Reeder, Assistant Professor of Management-Marketing, continuous time allocation model to allow for conditional activities, i.e., when
positive time allocation on one activity-gaming-depends on previous completion
Purdue University-Krannert School of Management,
of another activity-studying. Children’s utility and decisions then influence the
403 West State Street, West Lafayette, IN, 47904, United States, parent’s decision to subscribe to the product. We estimate our model with data
jreederi@purdue.edu, Wreetabrata Kar, Saayan Mitra, from an online math education software firm that include daily usage decisions
Viswanathan Swaminathan by children and subscription sign-ups by their parents. Our preliminary results
It is widely accepted that promotional emails are one of the most effective suggest significant heterogeneity in usage incentives, calling for a customized
marketing tools; yet, there is a lack of empirical research concerning the effect of platform design in terms of time allocation between the educational and game
email content and promotional amount on a customer’s choice. The gold-standard components.
in quantifying the effect of an email promotion is A/B testing in a randomized 3 - Product Introduction under Incompatibility in Complementary
sample. However, due to cost concerns, a firm will often eschew the use of A/B Goods Markets
testing. Instead, a firm will target customers based on the observable
characteristics of the individual’s engagement with the firm, such as purchase
Jianhui Li, Johns Hopkins University, 3100 Wyman Park Dr,
history, to maximize profitability. These characteristics then inform a firm’s Baltimore, MD, 21211, United States, jli123@jhu.edu
expectation of how a consumer will behave through the conversion funnel: from In many complementary goods markets, including tied goods, hardware and
opening the email through to the final purchase decision. Therefore, the software, platform and applications, products are often incompatible across brands
measurement of an average treatment effect between two promotions will, or technologies. Whether product incompatibility is primarily pro-competitive or
necessarily, be biased by the endogenous firm choice. To overcome this bias, we anti-competitive is a source of active debate and an open empirical question.
implement a novel matching algorithm built upon a machine learning Given the growing prevalence of complementary goods markets, addressing the
framework. This method allows us to recover the unbiased average treatment effect of product incompatibility on market competition is also crucial for antitrust
effects of each promotion despite the firm’s initial targeting decision. We utilize a and intellectual property policy and regulation. It is at the heart of recent antitrust
proprietary data set containing millions of individuals and 50 different email cases, e.g., European Union v.s. Google (2016).This paper studies the impact of
promotions. By cataloging the content of each email’s subject line and body, we product incompatibility on industry competition and consumers’ welfare in
estimate the lift of each element of the email (promotion and content) at every complementary good markets. Three questions are answered: What are the
stage of the conversion funnel. As a result, this study has attractive properties for consumers’ technology adoption and upgrading patterns under product
both the marketing manager and researcher in better understanding the effect of incompatibility in complementary goods market? How does product
email content and promotion amount on customer conversion. incompatibility affect the optimal pricing strategies and the innovation (new
product introduction)? What is the welfare effect of product incompatibility? In
particular, how will compatible design change firm’s profit and affect consumers’
n SD07 welfare in a new equilibrium? In the empirical application of US Men’s shaving
market, I develop a structural model of consumer demand and oligopoly product
introduction game. A product is defined as a shaving system consisting of a
Room 237, Alter Hall primary good (razor) and a complementary good (blade). The model is estimated
Structural Models and Estimation using a household level consumer panel data from 2004 to 2015. Given the
estimates, I solve for the counterfactual market equilibrium in which products are
Contributed Session compatible across brands. I find that product compatibility hinders the
Chair: Dinara Akchurina, INSEAD, Boulevard de Constance, innovation, intensify the price competition and harms the consumer welfare.
Fontainebleau, 77305, France, dinara.akchurina@insead.edu 4 - An Empirical Comparison of Methods for Aggregate
1 - The Impact of Strategic Vertical Alliances in the Medicare Demand Analysis
Advantage Market Sandeep Satyavolu, Data Scientist, Procter and Gamble, 1 P&G
Dahae Jeong, Doctoral Student, Arizona State University, Plaza, Cincinnati, OH, 45202, United States, satyavolu.s@pg.com,
Tempe, AZ, United States, djeong85@gmail.com, Sang Pil Han, Vithala R Rao
Sungho Park Over the last two decades, researchers have used aggregate market share data to
More than two third of the seniors with age 65 and over carries two or more estimate demand models to extract individual level preferences towards product
chronic diseases. Health becomes a more important issue as people age, and attributes (price included). Key aspects of these methods entail dealing with the
seniors not only consider the coverage but also value additional health-related estimation of a large number of parameters and the endogeneity problem due to
services when deciding their insurance plan. To better serve the needs of the older the inclusion of the price variable. Beginning with the now classic BLP method
customers, the providers of Medicare Advantage, the private insurance plans for (Berry, Levinsohn and Pakes 1995a), alternative methods have been proposed for
seniors, offer various value-added services by forming strategic alliances. This estimating these models, the more prominent ones being a Bayesian approach
paper aims to examine the economic impact of strategic vertical alliances in the (Jiang, Manchanda and Rossi 2009) and the MPEC (Dubé, Fox and Su 2012).
U.S. Medicare Advantage market. Specifically, we focus on how different types of While each method yields parameter estimates that may seem appropriate, there
vertical partnerships between insurance companies and retail pharmacies - such is no way to tell how “valid” the estimates are because they are not applied to a
as marketing alliances, technology partnership, co-product development and common dataset. Such a knowledge is necessary for using the estimates for
vertical integration - affect their market performances and patients’ health managerial purposes such as forecasting and determination of WTP values for
outcomes. We further analyze the impact of vertical alliances on the perceived attributes. This paper fills that gap by employing three methods (BLP, Bayesian
quality of the plans. We apply econometric models to analyze county-level approach and MPEC) to two data sets - a synthetic data and transactional data for
aggregated data and mitigate potential endogeneity problem. This paper is the first digital cameras. This paper will compare these different approaches, comment on
paper to look at the impact of vertical alliances in the Medicare Advantage market various caveats with implementing each estimation method, compare model fit
and thus contributes to both marketing and aging literature. Our results also and accuracy, and interpret the final parameter estimates. We expect that this
provide meaningful insights to the healthcare marketing practitioners targeting work will offer much needed guidance in the “right” approach to estimation of a
older customers. demand model with aggregated data.
2 - Work Then Play: A Model of Children Usage and Parent Purchase
Decisions at an Online Education Platform with Gamified Content
Dinara Akchurina, INSEAD, Boulevard de Constance,
Fontainebleau, 77305, France, dinara.akchurina@insead.edu,
Paulo Albuquerque
In several categories, such as health or education, consumers often need
encouragement to use products or make certain consumption decisions. To
motivate usage, it is then common for firms to offer added product features
and/or rewards that are only accessible conditional on consumption decisions.
This leads to the managerial question of how to balance core product activities
and rewards, so that the firm encourages both product usage and purchase. In
this paper, we study this problem in the context of an online educational platform
105
n SD09 n SD10
Reviews & Social Environments Digital Strategy
Chair: Anita Luo, Georgia State University, Department of Marketing, Chair: Tolga M Akcura, Ozyegin University, Kusbakisi Caddesi No 2,
35 Broad Street NW, Atlanta, GA, 30303, United States, aluo@gsu.edu Altunizade Üskÿdar, Istanbul, 34662, Turkey, Akcura@yahoo.com
1 - Residential Mobility Privacy and Risk Seeking Behavior 1 - Identity Fragmentation Bias
Ruijuan Wang, Doctoral Student, Wuhan University, 299 Bayi Tesary Lin, University of Chicago Booth School, Hyde Park, 5807
Road, Wuhan, 430072, China, wangruijuan@whu.edu.cn, Jian Ni, Woodlawn Avenue, Chicago, IL, 60637, United States,
Fue Zeng tesarylin@uchicago.edu, Sanjog Misra
This paper examines the effect of residential mobility on risk-taking behaviors in It is increasingly common for companies to collect customer data via different
different societal situations. Using both field and experimental data, we show that channels and sources. However, such data often contains different identifiers for
the effect of residential mobility on insurance purchase is moderated by privacy the same individual. Failure to consistently identify the same customer leads to a
concern, depending on the social exchange (social sharing) intentions among fragmented measure of exposures and behaviors, causing biased estimates and
decision makers. Consumers who live in a high-mobility community, are mainly erroneous inferences. Contrary to conventional wisdom, we show that the
motivated by self-enhancement (e.g., self-expression achievement, aloneness), estimation bias does not always take the form of attenuation; instead, the
and this self-oriented incentive fosters risk-seeking behaviors. While this effect estimator can have an arbitrary magnitude compared to the true value, making
disappears if residents are sensitive to privacy concern being unwilling to share interpretation of estimates difficult. Bias persists even when the goal of analysis is
sensitive personal information. Conversely, consumers who live in a stability obtaining a simple average effect. Using an analytical framework, we show that
community, are mainly driven by emotional-connection (e.g., social acceptance the estimation bias consists of two parts: a level shift caused by within-person
and dependence), and this stableness-oriented mindset leads to risk-aversion. The activity bias, and a magnitude change caused by missing links, which can be
provincial-level insurance data across China suggest that residential mobility further decomposed into measurement error and omitted variable bias.
foster financial risk-seeking behavior. We then analyze a rich individual-level Attenuation bias occurs only under certain symmetry condition, which we
insurance purchase dataset and test the potential mechanism of privacy concerns. formally characterize. We propose two different solutions to the estimation
Finally, in the control experiments, we manipulate residential mobility and problem caused by identity fragmentation, which are tailored to different stages of
privacy concern, and demonstrate that the “mobility” type participants’ risk- the data collection process. First, careful experiment design and analysis permits
taking behavior depends on their states of privacy concern and are is sensitive in estimator de-biasing, provided that the focus is on intent-to-treat. Second,
risk-seeking related tasks (i.e., investment decisions), whereas the “stability” type stratified aggregation is generally useful when data is already generated, and is
participants are more sensitive in risk-aversion related task (i.e., insurance suitable for a wider range of analysis. We discuss potential complications for
decisions). inference when data is linked by a third party company. Our findings have
important implications for experiment design, cross-channel analysis, and data
2 - Examining the Cost of Over-solicitation in Direct Marketing linking practices.
Anita Luo, Georgia State University, Department of Marketing, 35
Broad Street NW, Atlanta, GA, 30303, United States, aluo@gsu.edu 2 - The Strategic Role of Featured Product Recommendations on
Online Retailers Competition
Consumer privacy related to direct marketing is an important topic that has
Skander Esseghaier, Associate Professor, ESADE Business School,
received attention from the public and business alike. Goodwin (1991) defines
consumer privacy based on control of information and control over unwanted Avda. Torre Blanca 59, Sant Cugat, Barcelona, 08172, Spain,
intrusion into the consumer’s environment, which includes unsolicited direct mail skander.esseghaier@esade.edu, Sofien Bahani
and telemarketing. Shiman (1996) suggested that the sheer volume of email Online retailers such as amazon.com and barnesandnoble.com make extensive
solicitations could cause consumer concerns as it could be over-used for its low use of product recommendations in categories such as books or movies, where
cost. Therefore, this research explores the issue of over-solicitation in direct they essentially carry the same assortment of products. Consumers in these
marketing and whether companies might actually incur financial loss as a results markets differ in their store preference (“loyal” vs. “switchers”) as well as in the
of perceived privacy intrusion. Although there is extensive literature that has strength of their product preference (“sure” vs. “unsure”). It is therefore puzzling
examined consumer privacy, no empirical studies have been conducted to that online retailers still rely on a traditional one-size-fits-all approach to product
examine the cost of over-solicitation in direct marketing. To address this issue, this recommendations, recommending the same “featured” product (e.g., “editor
study models the amount of direct mail sent, the number of emails sent, the spotlight pick” or “best seller of the month”) to all their customers in the category.
number of emails opened given emails sent, and the purchase amount jointly We examine the strategic implications of recommending a single featured product
through vine copula. The model is applied to a U.S. retailer selling multiple in the presence of such consumer heterogeneity. We show that such a
categories of home furnishing goods, which frequently sends out direct marketing recommendation approach enables differentiated retailers to mitigate the
communications to its customers. By examining how a high frequency of email intensity of price competition. Specifically, these recommendations steer store
and direct mail sent impacts customers’ purchase behavior, we are able to loyal consumers toward the featured product, increasing the size of store loyal
examine the cost of over-solicitation in direct marketing. This study provides purchasers (relative to switchers) in the featured product market. This, in turn,
empirical guidance to help companies examine their direct marketing programs so reduces a store’s incentive to compete aggressively for switchers in that market. In
they don’t waste valuable marketing resources and actually alienate their equilibrium, both stores feature the same product, compete less aggressively in
customers from over-solicitation. the featured product market, and generate higher profits. In an online context,
3 - How Dispersive Opinions Affect Evaluation: Edowment Effect however, stores have substantial information about their loyal customers and are
able to develop a preference-based approach to recommendations. Different
Guides Attribution Choice
consumers would be recommended different products that best match a store’s
Guangming Xie, Doctoral Candidate, Southwest Jiaotong information about their customers’ individual preference. Interestingly, we find
University, No. 111, North 1st section, Second Ring Road, that in a competitive context, such an approach may not benefit the stores. We
Chengdu, 610031, China, xieguangming@my.swjtu.edu.cn, show that even if it were costless for stores to develop such preference-based
Pei Hu, Yushi Jiang recommendation systems, they would be better off with a one-size-fits-all
approach, recommending the same featured product to all their loyal customers.
We show that the attribution choice of word-of-mouth (WOM) dispersion is
This result challenges the widely held belief that the more information a firm has
systematically influenced by the magnitude of endowment effect for the product
on its customers, the better off it would be.
or service: high endowment-effect results in greater weighting of reviewer-
related attribution (i.e., tastes, personalities, and individual styles) and reduced
weighting of product-related attribution (i.e., look, quality, and texture). Three
studies extend existing attribution-based approach to underscore the role of a
contextual variable (i.e., endowment effect). Individuals will be more likely to
choose a high-dispersion option over a low-dispersion one for a product or service
for which they exhibited a strong endowment effect. As an important implication
of our work, we also highlight a critical point that the mediating role of
attribution choice in the relationship between WOM dispersion and purchase
intention is moderated by the endowment effect. These findings reveal an
important boundary condition of traditional models of consumer attributional
inference and respond to the longstanding call for further exploration of the role
that social distributions play in consumer decision-making process.
106

3 - A Model of Brand Health 3 - The Effects of International Marketing Joint Venture Formations
M. Tolga Akcura, Ozyegin University, Istanbul, 34662, Turkey, in Emerging Markets on Consumer Brand Attitudes
tolga.akcura@ozyegin.edu.tr Mark Ratchford, Visiting Assistant Professor, Tulane University,
Peer influence, fast developing trends, social media (Instagram pictures/ stories, New Orleans, LA, United States, mratchford@tulane.edu,
facebook likes, tweeted moments, shared videos) are some of the emerging yet Kiran Pedada, Mayukh Dass
proven technologies that influence consumer behavior. Brand managers admit As part of their global growth strategy, multinational corporations headquartered
that the traditional approaches and brand health metrics are not suitable for the in developed markets (DMs) are increasingly expanding into emerging markets
fast-paced, technology-driven market places. Conducting annual brand audits are (EMs) such as India and China by forming international marketing joint ventures
increasingly seen as obsolete. Timely prescriptive actions carry utmost (IMJVs) with firms headquartered in EMs. Existing studies of IMJVs have
importance. Defining new brand metrics that can guide branding and marketing primarily focused on firm-level actions such as formations and dissolutions and
decisions is a priority for most marketers, but, still, there are limited options. This their antecedents and consequences. However, relatively little is known about the
research proposes a new approach to capture and model a brand’s health. A novel effects of these alliances on consumer attitudes and behaviors. In this paper, we
set of metrics are obtained from social media over multiple years. Brand health is examine the effects of DM-EM IMJV formations on consumer brand attitudes in
filtered from sales using Kalman Filtering that allows for structural breaks and an emerging market. Across three studies conducted in India, our findings suggest
differences between periods of strength and weakness using Gibbs sampling. The that the overall brand perception of the IMJV is largely driven by the brand
findings shed light on linking a brand’s long-term health, fast-paced fluctuations perception of the developed market partner firm. Moreover, we find that
in sales while providing meaningful managerial insights for day-to-day brand consumers form more favorable perceptions towards an IMJV when there is a fit
management decisions using big data. between the primary product categories of the developed and emerging market
brands. Furthermore, product category fit matters more (less) when the IMJV is
focusing on developing high (low) priced products. These findings will help both
n SD11 DM and EM firms make better IMJV partner selection and offering decisions.
4 - A Scale for Measuring the Country-of-origin Effect on Perceived
Room 606, Alter Hall Value in Services Industries
International Marketing Connie Chang, Associate Professor, Musashino University,
3-3-3 Ariake, Koto-ku, Tokyo, 135-8181, Japan,
Contributed Session
connie@musashino-u.ac.jp, Yu-Hsu Hsu
Chair: Connie Chang, Musashino University, 3-3-3 Ariake, This study aims to propose a scale for measuring the moderator effect of Country-
Koto-ku, Tokyo, 135-8181, Japan, connie@musashino-u.ac.jp of-Origin (COO) on customer-perceived value (CPV) in service industries by using
1 - Cross-national Factors that Affect Customer Satisfaction samples of consumers in Japan, Taiwan, China, the USA and the United
Seung Min Lee, Korea University Business School, Seoul, Korea, Kingdom. The merit in doing so is that our study is comprehensive because of the
Republic of, flyfar@korea.ac.kr, Jong Min Kim, Jeongsoo Han different hybrid service scenarios which contain different degree of service
characteristics respectively. Furthermore, previous COO studies have focused on
In order to understand the similarities and differences in customer’s perceived only one or two settings within a single country, the role of COO will be
satisfaction across countries, this research investigates cross-national determinants evaluated in a broader context in this study. The first study focuses on the effect
that influence customer satisfaction. Based on the cross-national determinants of country image on customer-perceived value and a financial product is selected
found, the authors further examine the differential impacts of these determinants to examine the relationship. In order to test the relationship between a country’s
on customer satisfaction. The authors conduct three empirical studies using an attributes and customer-perceived value, early childhood education programme is
online review dataset from the international booking agency. The first study chosen. The final study is to test the effect of COO on more intangible dominant
shows that life satisfaction and individualism are found to have significant product such as consultancy and advisory services. A mixed-method research
impacts on customer satisfaction. In the second study, the results show that approach will be employed in in all three studies. The results will yield theoretical
customers in countries with a lower level of life satisfaction express significantly contributions to International Marketing, Services Marketing and Modelling
greater inconsistency in customer satisfaction, given the same consumption literature. It will also contribute empirically to services companies which intend to
experience. The third study provides evidence that customers in countries with a improve their customer satisfaction and experience.
higher level of individualism show greater inconsistency in customer satisfaction,
as well as a greater affection level of customer satisfaction, given the same
consumption experience. These findings of our studies bring forward important
managerial implications for international marketing practitioners to segment their n SD12
global market.
2 - The Role of Moderately Congruent Brand Name and Country of
Sourcing in Product Evaluation Online Deception
Saurabh Bhattacharya, Lecturer, Newcastle University Business Contributed Session
School, 5 Barrack Road, Newcastle, NE4 9EL, United Kingdom,
Chair: Yegyu Han, Virginia Polytechnic Institute and State University,
saurabh.bhattacharya@ncl.ac.uk, Arpita Agnihotri
Blacksburg, VA, United States, yegyuhan@vt.edu
Firms often leverage foreign branding practices. Recent studies, however, suggest
1 - Linguistic Aspects of Authentic and Fictitious Product Reviews -
that when consumers perceive incongruence between the phonetics of a brand
name and its country of manufacturing (COM), the brand is negatively evaluated Combining Experimental and Text-analysis Approaches
especially for emerging market firms. These findings give rise to two further issues Ann Kronrod, Assistant Professor of Marketing, University of
to be explored. First, studies to date did not test the impact of brand name and Massachusetts-Lowell, Lowell, MA, United States,
COM congruence (or incongruence) when phonetics of a country are not very ann_kronrod@uml.edu, Jeffrey K. Lee, Ivan Gordeliy
well known among international consumers. For instance, German and French
Fraudulent user-generated content is harmful for both consumers and marketers
phonetics are well known in international communities, which is not the case
and increases uncertainty about consumption experiences and offerings. To
with Chinese or Indian phonetics. Second, with regards to COO cue, literature is
improve consumer experience online and increase consumer trust, marketers
primarily focused on how multiple COO cues influence brand dimension
need a robust method to identify potentially fictitious product reviews. Here, the
individually and do not consider the interaction among them. Given that country
authors address this need via a novel method leveraging linguistic theory,
of sourcing (COS), COM, and brand name are the most commonly used COO
experiment-driven data sampling, and automated text analysis on the language
cues by firms, it is vital to explore the interplay between these COO cues in
used in reviews. Relying on literature about the linguistics of experienced and
influencing product evaluation. Based on three experimental studies conducted
imagined events, the authors suggest that fictitious reviews include: (1) less past
across two European markets, our findings indicate that in the context of brands
tense, (2) less unique words, and (3) more abstract language. Testing these
from emerging markets (like India), for product categories where they have
predictions via automatic text analysis of authentic and fictitious reviews, the
positive product category micro image, a moderate congruency between brand
authors find that writers of fictitious reviews used significantly less unique
name and COM is positively evaluated in comparison to incongruence.
words and concrete nouns, but not significantly less past tense. They also find
Furthermore, COS moderates the impact of a brand name and COM congruency
experimentally that awareness of these linguistic aspects does not improve how
on product evaluation such that the impact of an incongruence on product
people write fictitious reviews. Similarly, awareness of these aspects did not
evaluation is lessened when COS is an emerging market. Managerial implications
improve the success rates of detecting fictitious reviews: participants became more
are discussed.
suspicious, labeling more reviews as fictitious, but overall their detection rates did
not improve. These findings offer insights to consumers and to managers of digital
platforms that depend on consumer trust and on an abundance of authentic user-
generated content. The results also suggest that some features are not easy to fake
when composing fictitious reviews, and demonstrate the advantages of using
automatic tools to detect potentially fraudulent online content. This work
provides the basis to develop practical methods for detecting deception in
consumer reviews.
107

2 - Role of Social Media in the Gaming Industry 2 - Information and Incentive in Freelance Contests
Elham Yazdani, University of Utah, David Eccles School of Haosheng Fan, Hong Kong University of Science and Technology,
Business, Salt Lake City, UT, 84112, United States, HKUST, Clear Water Bay, Kowloon, Hong Kong,
Elham.Yazdani@business.utah.edu, Shyam Gopinath hfanae@connect.ust.hk, Song Lin
Role of Social Media in the Gaming Industry Past research has looked at the Innovation is among the top priorities of many firms and organizations, and is
impact of WOM measures on different experiential products. Gaming has always critical for their success. Innovations are often procured through external sources.
been a popular part of the entertainment industry. In this research, we investigate Seeking external innovation or creativity is becoming more prevalent now
the impacts of different types of online social media on game sales. We also study because the costs of crowdsourcing are being significantly reduced by the
the role of price and seller’s reputation after controlling for factors such as Internet. One fundamental question in economics is how to design contracts or
shipping country and method of payment. Moreover, our unique dataset enables market mechanisms to motivate innovation. Innovations involve high risks and
us to understand how the impact of WOM measures on product sales is affected thus require innovators to make substantial effort to explore in risky directions
by the genre of game and its popularity. Although past research has looked at the that may yield little payoff. Contests have emerged as an important market design
general impact of WOM on sales, this research investigates a more comprehensive for firms to procure external innovations on online freelance platforms. In a
set of social media measures which enhances our understanding of this domain. typical contest, a firm seeking innovative output allows freelancers to submit one
Keyword: Online social media, user-generated content, word of mouth, internet or multiple solutions over a period of time. Winner will be rewarded with a prize
marketing, gaming industry Authors: Elham Yazdani, Shyam Gopinath Presenter: announced in advance. In this research, we focus on how firms should design
Elham Yazdani contests to motivate freelancers to be more innovative. Particularly, we propose to
investigate the important role information structure can play in motivating
3 - Voice and Reflectivity as Drivers of Consumer Relationships with innovation in contests. On one hand, firms can provide interim feedback to
Smart Agents freelancers, who can decide whether to improve on existing solutions or explore a
Yegyu Han, Virginia Tech, Blacksburg, VA, United States, different direction. On the other hand, whether freelancers can observe the
yegyuhan@vt.edu, Dipankar Chakravarti outputs of competitors can influence their decision to participate and the effort
they expend. Free riding may become an issue when outputs are publicly
Smart agents like IBM’s Watson and Amazon’s Echo are rapidly integrating into
observable. Our research first contributes to literature on motivating innovation
consumer households. Skill software and agents are moving consumers closer to
studying the tension between exploitation and exploration. Our research
an IoT world in which they develop relationships with smart agents and rely on
examines the tension in a more general setting where freelancers can exploit
them for performing chores, getting advice, and managing aspects of their daily
competing submissions as well, if competing submissions are observable. This
lives (Hoffman and Novak 2017). Voice and speech characteristics critically
research also contributes to literature on optimal contest design by investigating
influence consumers’ perceptions of (and relationships with) smart agents
the effect of observing competing submission and interim feedback provision.
(Schroeder and Epley 2016).We report two studies (set in a financial advising
scenario) examining how features of vocal expressions and reflectivity (training)
of smart agents lead to differential relationship outcomes. Study 1 compares
trustworthiness, liking, and persuasion outcomes for a smart agent advisor versus
a human advisor. Reflectivity is manipulated by the presence/absence of training
n SD14
(on personal risk orientation). We argue that consumers view smart agents Room 607, Alter Hall
(versus human advisors) as less contaminated by self-interest. Hence, given self-
relevance towards a trained smart agent leads consumers to evaluate it as more Marketing Strategy - Market Responses
trustworthy and likable. Thus, with high reflectivity (training present), persuasion Contributed Session
(advice taking) is higher for the smart agent versus the trained human advisor.
The effect reverses when reflectivity is low.Study 2 compares smart agents that Chair: Akihiro Inoue, Keio University, 6-22, Suzuhara, Itami-City,
differ on vocal expressions (rational/emotional). Since rational expressions are 664-0882, Japan, ainoue@kbs.keio.ac.jp
seen as more informative and factual, a recommendation delivered in the former 1 - Negative Publicity and its Dynamic Impact on Company Sales
mode is more persuasive. However, the effect reverses with reflectivity training
and Stock Price: Perspectives of Customers and Investors
because emotional expressions increase intimacy and anthropomorphism.
Consumers are more likely to follow the advice because they infer that it meets Jung Ah Han, Drexel University, Philadelphia, PA, 19104,
their needs better. United States, jh3299@drexel.edu, Bang Jeon, Rolph Anderson
This study reveals that the dynamic impact of negative publicity to customers may
not be as harmful as to investors of the firm. When firms are faced with negative
n SD13 publicity, management tries to suppress it to help prevent any detrimental impact
on the firm’s sales and stock market price. However, in the marketing literature,
Room 746, Alter Hall whether the impact of negative information is beneficial or harmful to the firm is
inconclusive, depending on the brand name value and the nature of negative
New Products and Innovation 5 publicity, among others. Applying time series econometric analysis to firm-level,
survey and financial data for global car makers, we find that the impacts of
Contributed Session negative information are dynamically changing over time, and negative publicity
Chair: Haosheng Fan, Hong Kong University of Science and affects very differently customers vs. investors of the firm. From a customer’s
Technology, HKUST, Clear Water Bay, Kowloon, Hong Kong, perspective, negative publicity has no significant effect on sales partly because
hfanae@connect.ust.hk negative publicity may be both harmful and beneficial to the firm through the
awareness effect, i.e., consumers become more aware of the product in the
1 - The Creative Performance of Serial Ideators in Idea Contests marketplace. In contrast, while investors’ initial response to negative publicity
Tojin Eapen, PhD Candidate in Marketing, UNC Kenan-Flagler, about a company may depress its stock market price, our results reveal that in
Chapel Hill, NC, 27514, United States, Tojin_Eapen@kenan- fifty weeks or less, the company’s stock price tends to return to its previous value
flagler.unc.edu, Rajdeep Grewal thereby indicating that the negative impact of negative publicity on stock price
tends not to be long-lasting. The main findings of our study suggest that when
Idea-generation is a vital input to several key marketing activities such as new firms are faced with negative publicity, firms should focus their attention more on
product development and advertising. It is increasingly common to find firms their investor relations over consumer relations for a considerable time period
employing idea contests and other open innovation models to source ideas. Of until the long-term impact of the negative publicity subsides.
recent interest has been the role of creativity in this process. A key assumption in
previous studies is that individual creativity does not change over time as a result
of participation in such contests. In the context of idea contests, it is also relevant
to ask whether the nature of contests shape individual creativity over time. Of
particular interest is the performance of serial ideators - individuals who
contribute multiple ideas in such settings. The authors analyze how creativity of
ideas generated by serial ideators is shaped by diverse participation on an open
innovation platform. The authors use a large individual-level data set with 12,200
ideas that features 7,841 ideators across 47 contests to assess serial creative
performance. The study employs a Bayesian growth curve model to measure
changes in individual-level creativity over time. The authors model idea creativity
as a multi-dimensional construct and utilize natural language processing and
semantic analysis to evaluate componential dimensions of idea creativity over
time. Results suggest that participating in diverse contests can improve creative
performance of serial ideators. We also explore the implication of these results in
the design of idea contests and open innovation platforms.
108

2 - Stock Market Response to Disclosure and Surprises in
Marketing Metrics n SD15
Ankit Anand, Georgia State University, 3348 Peachtree Rd, NE, Room 603, Alter Hall
Suite 204, Atlanta, GA, 30326, United States, aanand2@gsu.edu,
V. Kumar CB – Affecting Consumer Preferences
Firms face the challenge whether to disclose their industry-specific marketing Contributed Session
outcomes during quarterly earnings announcements or not. Voluntary disclosure Chair: Sarang Go, Seoul National University, Sinlim, Seoul, 135010,
of marketing metrics may reduce information asymmetry and conflict of interest Korea, Republic of, klover83@gmail.com
among managers and shareholders while at the same such disclosures are
associated with higher proprietary costs and higher market expectations. Drawing 1 - Exploring Consumer Evaluations of Really New Products
on the efficient market hypothesis and market-based assets, we argue that firms Akihiro Nishimoto, Kwansei Gakuin University, 1-155,
disclosing marketing metrics, in addition to financial metrics, entertain higher Ichiban-Cho, Uegahara, Nishinomiya, 662-8501, Japan,
stock market returns compared to firms that do not disclose such metrics. Once anishimoto@kwansei.ac.jp
managers start disclosing marketing metrics, then analysts also start forecasting
their estimates leading to a market expectation about these metrics similar to the There are many really new products which have completely differences for the
case of financial metrics. Finance literature has found that beating market existing products in various industries. Especially we can often see that digital
expectations of financial metrics (e.g., earnings per share) acts as good news to technologies enhance the consumers’ evaluations for such products recently. This
the stock market and the market rewards such firms leading to a higher abnormal study examines the success factors which they tend to reflect more favorably on
return. Similarly, we argue that beating market expectations of marketing metrics them. In this study, favorable consumers’ evaluation of the really new products is
also lead to a higher abnormal return; however, the impact is different in short vs. considered whether they can make sense of an extremely incongruent elements.
long-run. Drawing on investor underreaction theory and market-based assets, we That is, it is the extent to which their schema consistent with that products based
argue that the immediate returns of marketing metric surprise are lower than eps on features and categories. In this research field, it has been considered that
surprise whereas the long-term returns of marketing metric surprise are higher moderately incongruent with their associated category schemas are expected
than eps surprise. We also investigate the effect of marketing metric surprise on stimulate processing that leads to a more favorable evaluation relative to products
stock market returns for different types of metrics - product vs. customer, firm, that are either congruent or extremely incongruent (e.g. Meyers-Levy and Tybout
analyst, and industry related boundary conditions. We test our claims using 1989). Nowadays, it has been examined that what kind of an element or
robust econometric techniques on S&P 1500 firms consisting of firms disclosing conjunctive enablers induce moderate incongruity (e.g. Noseworthy et al. 2017).
industry-specific marketing metrics and non-disclosing firms. This study conducts three experiments to investigate what kind of an element or
conjunctive enablers induce moderate incongruity. Its findings would be able to
3 - An Approach to Product-development Strategy Taking into help marketers successfully introduce incongruent new products.
Account the Short-term Profit and the Mid-term Corporate 2 - Modeling Decision Procrastination as an Indicator of
Strategy using Sensitivity Engineering Choice Uncertainty
Akihiro Inoue, Professor, Keio University, Keio Business School, Gilles Laurent, Professor, INSEEC, 13 Avenue De Poitou,
4-1-1 Hiyoshi, Kohoku-ku, Yokohama-City, 223-8526, Japan, Sceaux, 92330, France, glaurent@inseec.com,
ainoue@kbs.keio.ac.jp, Hidenori NANJO Raphaëlle Lambert-Pandraud, David Dubois
In product development strategy, it is important to maximize the profit but
Consider a choice situation in which you will have to announce your choice at a
sometimes marketing managers run across the trade-off between the short-term
pre-specified future deadline. Do you prefer to wait till the last minute to make
profit and the mid- or long-term corporate strategy. In this study, we propose an
your decision, or will you decide earlier? For example, in a restaurant, after
approach that allows marketing managers to design product-development
reading the menu, do you decide immediately what you will eat, or do you keep
strategy that maximizes the short-term profit while integrating the mid- or long-
your decision open till the waiter comes to take your order? Hesitating till the last
term corporate strategy using the hierarchical modeling. We applied the approach
minute is an indicator of uncertainty. Equally, an early decision is a manifestation
to the two Japanese luxury-cosmetic companies. Both companies mention the
of certainty. We propose a model in which the decision-maker has to choose
aesthetic strategy and technology strategy in their mid-term corporate strategies
between two options (say, two entrées) with random values associated with each
in different ways. We explicitly incorporated the several aspects of the aesthetic
value. As time passes before you have to announce your choice, new information
strategy using the kansei (sensitivity) engineering, as well as the technology
becomes available and changes the parameters of the two value distributions. In
strategy.
some cases, this additional information will lead to an early decision (before the
We collected the data from the 450 Japanese female samples with some screening deadline); in other cases, the decision will be made only at the deadline. To test
conditions that satisfy the requirements to be the potential customers for the the model, we build on past work on attitude certainty to develop hypotheses
luxury cosmetics. We develop a hierarchical conjoint model where the basic regarding two determinants of decision timing, consumer age and repeat behavior
attributes are used for the base model and the aspects derived from the kansei (e.g., choosing a well-known entrée). We have access to very large samples of
(sensitivity) engineering are specified for the hyper model and apply the model to voters at a future election, collected over the last months before a presidential
the data, using the MCMC. We derived some implications where the short-term election, in which respondents indicate whether they have already made a
profit and the mid-term aesthetic and technology strategies are consistent but also decision and whether their decision is final. We use the model to check the
found some implications where they are not consistent. We show the details in impact of the two determinants. Managerial implications result from the
presentation and also propose some modification in aesthetic and technology identification of consumers more subject to procrastination, and therefore more
strategies from the view point of the kansei (sensitivity) engineering. susceptible to the impact of additional information.
3 - Expected Utility of Sports Spectators; Close or Lopsided Match
Sarang Go, Seoul National University, Sinlim, Seoul, 135010,
Korea, Republic of, klover83@gmail.com, Youseok Lee,
Junhee Seok, Byungdo Kim
People want to watch a sports game which cannot anticipate the result until the
end of the game. Sometimes, however, excessive tension of contest lowers the
interest of audience. Vast amount of existing researches have focused on finding
explanation about what makes a difference of the preference level of suspense
among sports fans and where is the optimal level of suspense. We apply Expected
Utility Theory and Prospect theory to illustrate the expected utility of sports
spectators. According to our findings, if someone someone who is satisfied more
when the cheering team wins, he or she may prefer lopsided match than close
match. And fans who support winning team, which means team which wins
often, prefer lopsided match to close match because they forecast their team will
win more than fans who support losing team, which means team which loses
often. We manipulate the level of satisfaction when the cheering team wins (S)
and subjective forecasted probability of win before the game (Q) of respondents
and measure the utility of them toward difference game aspect (P) to verify our
hypothesis. This study was carried out to investigate how the satisfaction of sports
spectators will change according to the change of the game aspect. In particular,
research model was set up using the Expected Utility Theory and Prospect
Theoryof economics. The use of economics models to explain sports consumer
behavior is different from that of previous studies, and consumers’ prior
expectations can affect the current game viewing based on Prospect Theory is
another contribution of this research.
109

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n TD12 3 - Repelling Invaders: The Effect of Incumbents’ Marketing

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n TD15 4 - Package Downsizing and Consumer (In)Attention

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n FA15 4 - Catching the Health Wagon: Consumers` Strategies of Control in

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