Marketing - HKU Business School

29 January

Deceptive Reviews Destroy Value

SPEAKER

Professor Marc Fischer
Chair in Marketing Science and Analytics
Co-editor Journal of Marketing
University of Cologne

ABSTRACT

Deceptive reviews are a widespread phenomenon on Amazon.com, Yelp.com, and other platforms, attracting the interest of researchers from many different fields. Prior research has largely focused on the effects at the disaggregate level of players such as Amazon retailers who commit review fraud. The authors extend this perspective to the aggregate level of publicly listed firms whose products might be unintentionally affected by review fraud initiated by independent Amazon retailers to promote their own business. They explore whether deceptive product reviews on Amazon.com accumulate to an effect substantial enough to influence value creation for the brand-owning firms. The analysis uses more than 14 million online reviews associated with ca. 650,000 products sold by 288 publicly listed firms via Amazon in the years 2004–2018. The authors find evidence of a destroyed value of US$ 161m per firm and quarter, which shows for the first time that deceptive review activity imposes substantial costs on firms and the economy as a whole.

09 January

The Slang Paradox: Connecting or Disconnecting with Consumers?

SPEAKER

Professor Alice Wang
John F. Murray Fellow and Professor of Marketing
Henry B. Tippie Research Fellow
Tippie College of Business
University of Iowa

ABSTRACT

Many brands use slang in their marketing communications to connect with consumers. However, through analyses of two Twitter datasets and seven experiments (four in the Web Appendix), the authors find that the use of slang in marketing communications could have unintended negative consequences for brands. They theorize and demonstrate that slang use in marketing communications can be perceived as inauthentic because such messages violate consumer expectations, leading to less favorable brand perceptions. To refine this understanding, the authors test conditions under which slang use aligns more with consumer expectations and is therefore perceived as less inauthentic. Specifically, they find that source characteristics play an important role. First, they show that brand personality impacts this process: Consumers have less favorable attitudes when sincere brands use slang, but not when exciting brands use slang. Second, when influencers (instead of brands themselves) publish brand messages, the negative effect of slang disappears. In addition to contributing new theoretical insights, this research provides practical guidance on effective social media engagement strategies by identifying conditions when slang use is perceived as inappropriate or not in marketing communications.

28 November

How Inequality of Romantic Partners’ Incomes Influences Joint Spending

SPEAKER

Professor Rebecca W. Hamilton
Michael G. and Robin Psaros Chair in Business Administration
Professor of Marketing
McDonough School of Business
Georgetown University

ABSTRACT

We examine the impact of within-household income inequality on the joint spending decisions of romantic partners. Across five studies examining both real spending data and willingness to pay, we demonstrate that within-household income inequality, moderated by total household income, significantly influences the couple’s perceived household financial well-being and joint spending decisions. For couples with relatively high household income, greater within-household income inequality induces a promotion orientation, increasing salience of the higher of the two incomes, which further increases feelings of household financial well-being and spending on joint consumption. However, for couples with relatively low household income, income inequality induces a prevention orientation, increasing salience of the lower of the two incomes, which further decreases perceived household financial well-being and spending. Illustrating this mechanism, shifting couples’ attention to their total household income prior to making spending decisions attenuates the effect. Our findings demonstrate that within-household income inequality can influence perceived financial well-being as a household and impact spending decisions, leading couples to spend more or less than they would if they were focusing on their economic ability to pay.

28 October

Experiences Require Appraisal to Overcome Expectations

SPEAKER

Professor Nathan Novemsky
Professor of Marketing
Yale School of Management
Yale University

ABSTRACT

Beliefs and attitudes about products and brands are presumed to be influenced by experiences with relevant products. In this research, we examine whether and under which circumstances this presumption is correct. In a series of laboratory and field experiments, we show that when belief and experience diverge, experience induces belief updating only when people are nudged to appraise the experience at the time of consumption. Contrary to lay beliefs, surprisingly good and surprisingly bad product experiences have no reliable effect on beliefs and choices when there is no prompt to appraise the experience while it is happening. When there is such a prompt, beliefs and choices shift in the direction consistent with the surprising experience both immediately and several days later. We suggest these results arise because effortful propositional thinking is required to change explicit beliefs (Associative–Propositional Evaluation Model, Gawronski and Bodenhausen, 2006). Our studies suggest that in many experiences, consumers do not expend the effort to articulate their momentary evaluations and therefore, do not update their prior beliefs.

24 October

Pricing the Right to Renege in Search Markets: Evidence from Trucking

SPEAKER

Professor Richard Faltings
Assistant Professor of Marketing
Rady School of Management
University of California, San Diego

ABSTRACT

In many markets, advance interim contracts include an explicit right to renege, granting one party the option to switch to more efficient matches that emerge later in the search process. This paper studies the formation and welfare implications of such interim contracts, leveraging novel data from a brokerage firm in the trucking industry. The broker allocates advance contracts on shipments to carriers through a dynamic auction mechanism and penalizes cancellations through a reputational mechanism. I develop a theoretical model linking the carrier’s bidding problem to the firm’s cancellation penalties through a dynamic job-search problem and structurally estimate the model from rich data on bids and cancellations. In counterfactual simulations, I show that the firm is incentivized to lower cancellation penalties as the option value of the right to renege is priced into carrier bids. The results rationalize the large degree of contractual flexibility observed in the trucking industry as an efficient market outcome rather than one constrained by limited contractual enforcement.

17 October

Beauty Work for the Female Gaze: Why Women Prefer Wearing Beauty Products for Female Audiences

SPEAKER

Professor Rosanna Smith
Associate Professor of Marketing
John. M. Jones Faculty Fellow
Gies College of Business
University of Illinois at Urbana-Champaign

ABSTRACT

Female consumers routinely engage in beauty work, employing products and services to enhance their appearance. Existing research suggests that women perform beauty work to appeal to others—in particular, the “male gaze” (i.e., a male audience). To counter this perception, marketers increasingly reframe beauty work as a tool for the self rather than for others. This article examines a novel positioning that does not ignore beauty work’s public function—framing women’s beauty work as for a female audience. Across a pilot test, five preregistered experiments, and an analysis of positive WOM in sorority rush TikTok videos (N = 9,090), results reveal that a female (vs. male) audience framing of beauty work enhances women’s beauty work consumption. This is because female audiences decrease women’s concern that their beauty work will lead them to be dehumanized while also increasing beliefs that their beauty work will be appreciated. This preference holds when accounting for social desirability and mating motives and is moderated by whether beauty work appreciation is seen as innate (vs. learned). This work has both theoretical and managerial implications, revealing that women’s beauty work extends beyond sexual competition to encompass more positive, affiliative functions.

21 August

“Word-of-AI” and Matching Quality: Evidence from a Natural Experiment on Online Review Platforms

SPEAKER

Professor Xitong Li
Professor of Information Systems
Department of Information Systems and Operations Management
HEC Paris

ABSTRACT

Many online platforms have recently integrated generative AI (GAI) generated content, yet its impact on the platform ecosystem requires careful investigation. By leveraging a unique policy of a leading online review platform that introduces GAI reviews summary (GAIRS), this study examines how GAIRS can affect the matching quality of online consumers purchasing products or services. Constructing a unique panel dataset of online reviews for a set of hotels on both TripAdvisor and Expedia, we apply a cross-platform difference-in-differences approach to estimate the impact of GAIRS. Our findings elucidate the positive effects of GAIRS on matching quality, manifested by increased consumer rating and decreased rating dispersion. This effect is driven by a decrease in unsatisfactory consumer experiences. Exploring potential mechanisms, we show that the positive effect of GAIRS on matching quality is more prominent in hotels with high uncertainty and when GAIRS is generated from a larger number of reviews, contains more content, or exhibits greater readability. We also present direct evidence supporting our mechanism by showing that the consumer reviews post-GAIRS display greater certainty and assertiveness in their content. Our further analyses rule out an alternative explanation for GAIRS’s role being a form of top review, by showing evidence for the performance of solicited reviews, the absence of consumer imitation from GAIRS, and improvements in hotel performance. Finally, we employ transfer deep learning to further demonstrate that GAIRS can reduce uncertainty. Additionally, we find that improvements in experiential dimensions including rooms, value, noise level, and service drive the decline in unsatisfactory consumer experiences. This research highlights the potential of GAIRS, as a recent GAI-empowered application in online platforms, in improving matching between online consumers and products, thereby contributing to the expanding discourse on the impacts of GAI in online markets.

12 August

How Ideological Beliefs About Social Hierarchies Shape Self-Interested Beliefs and Responses to Scarce Goods

SPEAKER

Professor Tanya Chartrand
Roy J. Bostock Marketing Professor
Professor of Psychology and Neuroscience
The Fuqua School of Business
Duke University

ABSTRACT

We propose that theories of ideological beliefs can provide insight into how consumers respond to scarcity; namely, through other-oriented processes that are less explored in the scarcity literature. We predict that consumers who reject (vs. endorse) social hierarchy will take smaller (larger) quantities of scarce goods due to their higher (lower) empathic concern for other shoppers. Support is found using actual and hypothetical choices/behavior, and across numerous contexts and scarce goods. Theory-relevant boundary conditions are also identified: those who reject hierarchy respond with less empathic concern and are more willing to take scarce goods when (1) the product satisfies less (vs. more) important needs (e.g., indulgences vs. necessities), (2) others’ consumption goals are less important than one’s own, and when (3) buying larger quantities only benefits others. By bridging two burgeoning areas of research, the results shed light on behaviors and contexts that are rarely explored in the scarcity literature and demonstrate the relevance of other-oriented processes in understanding consumer responses to product scarcity.

12 August

Consumers’ Self-Deceptive Response to the Debunking of Misleading Product Claims

SPEAKER

Professor Vincent Mak
Professor of Marketing and Decision Sciences
Cambridge Judge Business School
University of Cambridge

ABSTRACT

To address misleading product claims, policy makers may use measures such as issuing public debunking statements to help consumers update their beliefs. This research explores a factor that can hinder the effectiveness of such measures. We propose that a prior purchase from a seller can make consumers resistant to update their beliefs upon receiving new, debunking information about the seller’s product claims. Such resistance stems from a motivated beliefs effect – a desire to maintain self-confidence regarding the prior purchase choice based on the product claim. Importantly, the resulting belief distortion could lead to increased likelihood to repurchase from the debunked seller. To proceed, we first obtain testable propositions from the analysis of a behavioral economic model of motivated beliefs. We then tested our propositions in three pre-registered Prolific experiments in greenwashing contexts (N = 2,475). The experiments provided evidence of the motivated beliefs effect while controlling for initial preferences. Furthermore, a high perceived premium expense regarding the prior purchase can accentuate the self-deception. We also obtain evidence that a refund manipulation and the offering of self-confidence-supporting advice can mitigate the effect. Our findings contribute to research on misleading product claims and consumer self-deception, with relevant managerial implications.

19 May

Brand Name Disfluency Effects

SPEAKER

Professor Shi Zhang
Associate Professor of Marketing
Anderson School of Management
University of California, Los Angeles

ABSTRACT

We study the established dual impact of brand name fluency, the positive effect of fluency and negative effect of disfluency, by challenging the findings and demonstrating positive effects of disfluency and their underlying mechanisms. We introduce an innovative method using the event-related potential (ERP) experimental paradigm to assess the brand name fluency/disfluency on product evaluations, capturing both behavioral responses and neural data. Further, we support the above lab findings with an online field study correlating brand name fluency/disfluency with actual product sales.