Speaker:

Miss Weichen YAN
Ph.D. Candidate in Economics
Graduate School of Arts and Science
New York University

ABSTRACT

Setting the release date and advertising for a blockbuster movie are the most important decisions a studio makes in movie distribution. I propose a model which combines studios’ release date (entry) and advertising choices under incomplete information. Studios optimize by setting release dates followed by advertising budget, and have payoffs structurally determined and dependent on demand. I adopt an estimation method which accounts for advertising and choice set endogeneities, the latter leading to a selection bias if not corrected. Model estimates, in particular the effect of advertising, are significantly different from the traditional estimates. I show that ignoring advertising and/or choice set endogeneity significantly underestimates the impact of advertising on box office. In light of the recent Disney- Fox merger, I simulate how this event will impact the movie industry.

Speaker:

Mr. Woohyun CHOI
Ph.D. Candidate in Marketing
Graduate School of Business
Columbia University

ABSTRACT

We investigate the impact on the online advertising ecosystem of tracking consumers’ activities on the Internet. We also study the impact of regulations that, motivated by privacy concerns, endow consumers with the choice to have their online activity be tracked or not (e.g., the General Data Protection Regulation passed by the European Union in 2018). The consumers’ strategic decisions to (dis)allow advertisers from tracking their activities depend on two aspects of privacy: its intrinsic value (protect privacy for its own sake) and its instrumental value (compromise privacy if doing so indirectly leads to some utility-enhancing outcome). This opt-in decision impacts the precision of inferences by advertisers about how far down a consumer is in the “purchase funnel” for a product by virtue of ads shown previously. The structure of the purchase funnel creates an interdependence between the effectiveness of the sequence of ads shown, which in turn affects advertising strategies. For instance, we find that the intensity of advertising by advertisers is nonmonotonic in the effectiveness of ads. Consequently, consumers may opt-in to be tracked when ad effectiveness is intermediate. While privacy regulations generally increase consumer surplus, the implications for the ad network are mixed. Interestingly, the ad network’s prodddt may (i) be higher under endogenous tracking than under full tracking, and (ii) decrease as ads become more effective. We discuss managerial implications for advertisers as well as policy implications for regulators.

Marketing Seminar

Speaker:

Dr. Yunchuan (Frank) Liu
Associate Professor of Business Administration
College of Business
University of Illinois at Urbana-Champaign
 

Abstract:

We consider a firm consisting of two divisions, one responsible for designing and manufacturing new products and the other responsible for remanufacturing operations. The firm may either directly sell to the consumers both new and remanufactured products (direct selling) or sell through an independent retailer (indirect selling). Our paper demonstrates that an internally decentralized firm with separate manufacturing and remanufacturing divisions can benefit from indirect selling with higher firm profit, supply chain profit, total consumer demand than direct selling. Moreover, this structure also induces a remanufacturable product design. In contrast, an internally centralized firm in which the manufacturing and remanufacturing divisions are consolidated is intuitively better off by choosing direct selling than indirect selling. Furthermore, we show that, when the focal firm sells through an independent retailer, a decentralized binternal structure can result in higher supply chain profit than a centralized internal structure. We further investigate the case of dual dedicated channels and conclude that, while direct selling of remanufactured products and indirect selling of new products can better induce a remanufacturable product design and higher supply chain profit, it is not in the best interest of the firm in terms of total sales and firm profit.
 

Marketing Seminar

Speaker:

Dr. Yunchuan Liu
Associate Professor of Business Administration
College of Business
University of Illinois at Urbana-Champaign

Abstract:

We consider a firm consisting of two divisions, one responsible for designing and manufacturing new products and the other responsible for remanufacturing operations. The firm may either directly sell to the consumers both new and remanufactured products (direct selling) or sell through an independent retailer (indirect selling). Our paper demonstrates that an internally decentralized firm with separate manufacturing and remanufacturing divisions can benefit from indirect selling with higher firm profit, supply chain profit, total consumer demand than direct selling. Moreover, this structure also induces a remanufacturable product design. In contrast, an internally centralized firm in which the manufacturing and remanufacturing divisions are consolidated is intuitively better off by choosing direct selling than indirect selling. Furthermore, we show that, when the focal firm sells through an independent retailer, a decentralized internal structure can result in higher supply chain profit than a centralized internal structure. We further investigate the case of dual dedicated channels and conclude that, while direct selling of remanufactured products and indirect selling of new products can better induce a remanufacturable product design and higher supply chain profit, it is not in the best interest of the firm in terms of total sales and firm profit.

Marketing Seminar

Speaker:

Dr. Ashish KUMAR
Assistant Professor of Marketing
School of Business
Aalto University

Abstract:

Online shopping cart abandonment is a growing problem for e-commerce merchants worldwide as it causes a significant loss of their online revenue. The objective of this study is to examine the antecedents and recovery mechanism of online shopping cart abandonment. First, using a longitudinal data of consumers’ online orders, the authors show that cart characteristics, payment methods, marketing communications, situational factors, and consumer characteristics have significant effects on their online shopping cart abandonment behavior. In this regard, cart breadth, cart discount, delivery cost, the time gap between online orders, and morning time increase the likelihood of online shopping cart abandonment. On the other hand, cart depth, dynamically priced items in the cart, top-selling items in the cart, bank payment, cash on delivery payment method, email newsletters, and registered customers reduce the likelihood of online shopping cart abandonment. We find monetary value of cart has a nonlinear effect on the likelihood of online shopping cart abandonment. Second, for the same set of customers, we collect additional data from a marketing program intervention where we find that sending reminder emails reduces the rate of online shopping cart abandonment significantly. In fact, reminder emails lessen the probability of online shopping cart abandonment by as much as five percent, which is a significant recovery of lost online revenue in cart abandonment. Furthermore, we also report differential effects of reminder emails and antecedents on varying degree of cart recovery, such as full vs. major vs. minor recoveries. Based on these results, the study offers critical managerial insights to online retailers in addressing the issue of online shopping cart abandonment and recommends them to exploit reminder emails as a digital nudge in their repertoire of recommendation system.

Marketing Seminar

Speaker:

Dr. Leonard Lee
Associate Professor and Dean’s Chair
Department of Marketing, NUS Business School
National University of Singapore

Abstract:

Merely anticipating a future sad event may motivate consumers to “accumulate (i.e., bank) happiness” in order to enhance their ability to cope with the anticipated sadness later—a phenomenon that we call banking happiness. People bank happiness because of the lay theory that happiness is a resource that can be accumulated (i.e., banked) and consumed later. The present research documents three manifestations of this banking-happiness phenomenon: holding the happiness-is-bankable lay theory causes consumers who anticipate sadness (vs. a neutral mood) to (a) choose positive stimuli over non-positive stimuli when given the choice; (b) recall more positive (vs. negative) memories; and (c) engage with positive stimuli more deeply, thus achieving a greater boost in positive mood after exposure to these stimuli and responding less negatively to the anticipated sad event later. As a proactive mood-regulation strategy, banking happiness differs from reactive mood regulation. The strength of consumers’ lay beliefs in whether happiness is bankable as well as their dispositional future (vs. present) orientation predicts their tendency to bank happiness, but not their propensity to repair their negative moods after actually experiencing sadness.

Marketing Seminar

Speaker:

Dr. Guiyang Xiong
Assistant Professor of Marketing
Martin J. Whitman School of Management
Syracuse University

Abstract:

A revolutionary application of the virtual reality technology in online retailing, virtual fitting room (VFR), has attracted increasing attention of researchers and practitioners. However, it remains unclear whether and how VFR influences sales and post-sales outcomes based on the limited literature, and how its effects vary across customer groups and product types. Hence, retailers hesitate in adopting the technology due to concerns about its profit prospects. In this research, we conduct large-scale field experiments with real-world customer behavior data to test the causal effects of different VFR designs, and lab experiments to unveil the underlying theoretical mechanisms. We find that, although VFR can have a sizeable positive effect on sales, it can be counterproductive when used improperly. Specifically, personalized VFR may not increase sales if used in combination with conventional product visualizations because self-discrepancy becomes salient under this condition. Moreover, VFR significantly influences post-sales outcomes, i.e., it enhances customer satisfaction and reduces product return rate. Finally, the effects of VFR are conditional on certain customer characteristics and product types, implying the importance of precision targeting.

Marketing Seminar

Speaker:

Miss Ying BAO
Ph.D. Candidate in Marketing
Rotman School of Management
University of Toronto

Abstract:

Consumers often forget their past consumptions and incur overage charges. Technologies such as mobile applications have emerged to help consumers track their spending and eliminate overage charges. This paper is intended to examine the relation between consumer forgetfulness and overage charges as well as the implications of a lower consumption tracking cost due to technology improvements. To accomplish this, I develop a model of consumers who are forgetful about past usage and may be naïve about their forgetfulness.  In the model, a firm offers a service contract to consumers who will incur a penalty fee if they overuse the service prior to the end of the contract’s billing cycle.  Consumers who are forgetful, and naïve in the sense that they underestimate their forgetfulness ex-ante, will be more likely to incur such fees.  The model allows consumers the option of using a consumption tracking technology during the billing cycle at a cost; consumers who use the technology will be informed of their usage, so they can avoid penalty fees. In equilibrium, I show that decreases in the cost of tracking will improve consumer welfare, even if consumers never use the technology.  The intuition behind this result is that the firm will lower the penalty fee to disincentivize consumers from tracking their consumption.  Furthermore, I show that when consumers are heterogeneous in their levels of forgetfulness, decreases in the cost of tracking will reduce welfare for some consumers, while benefiting others. This is because the firm will design its contract to exploit some consumers and a lower tracking cost serves as a tool for the firm to discriminate between consumers. These results confirm the importance for the firms and regulators to consider consumers’ lack of sophistication towards their forgetfulness.

Marketing Seminar

Speaker:

Miss Chu Dang (Ivy)
Ph.D. Candidate in Marketing
CUHK Business School
The Chinese University of Hong Kong

Abstract:

Consumers’ valuation for privacy plays a crucial role in determining how much data a firm can collect to drive its managerial decisions. Meanwhile, previous literature that measures consumers’ dollar value for privacy often features small incentives to encourage data sharing. In this paper, we estimate consumers’ valuation for privacy by examining their data sharing decisions under a wide range of incentives, for customers of a microloan provider in Hong Kong. During the application process, the loan provider uses interest rate discounts to incentivize applicants to provide additional personal data. This percentage discount translates to dollar gains from 4,643 to 9,285 Hong Kong dollars (amount to 30 to 50 percent of their monthly salaries) for applicants who request different loan terms and expect different repayment behaviors. Using a structural model, we calculate the dollar price for personal data as a function of applicant risk type and the characteristics of the loan that they apply for. Despite the substantial benefits of sharing data, only 19 percent of applicants choose to share any optional personal data requested. In the counterfactual, we show how the incentive scheme can balance its role in collecting personal data to improve loan offering decisions and its role in screening applicants who accept the loan.

Marketing Seminar

Speaker:

Dr. Tuan Q. Phan
Associate Professor
NUS School of Computing

Abstract:

Flight delays are costly to passengers, the air travel industry, businesses, and the overall economy. Yet, there is little empirical evidence on how passengers behave and spend their time as a result of given time due to schedule disruptions. In this study, we use a large proprietary dataset on passengers’ indoor movements from a major airport and publicly available flight delay data to study how flyers spend their time due to flight delays. We find that, on average, for every ten minutes of delay, passengers spend twenty additional seconds near shops and 8 seconds near dining establishments. Furthermore, we find that passengers at lower rated airlines are more likely to spend time at dining establishment. Our findings can aid airlines and airports to better manage passengers satisfaction due to service disruptions.