Yale Marketing Seminar

The Yale Marketing Seminar Series presents recent research papers in marketing. The goal is to bring researchers from other universities to the Yale campus to stimulate exchange of ideas and deepen understanding of marketing trends. These seminars are geared towards faculty and PhD students interested in marketing.

Friday Series 11:30 a.m.-1:00 p.m., Edward P. Evans Hall, 165 Whitney Avenue, New Haven, CT, Isaacson Classroom 4210.
This seminar series is organized by Assistant Professor of Marketing Aniko Oery. Lunch is provided. 

Spring 2017

February 3

Eli Seminar

Jing Li (Harvard University – Job Market Candidate)
Paper: Compatibility and Investment in the U.S. Electric Vehicle Market
Competing standards often proliferate in the early years of product markets, potentially leading to socially inefficient investment. This paper studies the effect of compatibility in the U.S. electric vehicle market, which has grown ten-fold in its first five years but has three incompatible standards for charging stations. I develop and estimate a structural model of consumer vehicle choice and car manufacturer investment that demonstrates the ambiguous impact of mandating compatibility standards on market outcomes and welfare. Firms under incompatible standards may make investments in charging stations that primarily steal business from rivals and do not generate social benefits sufficient to justify their costs. But compatibility may lead to underinvestment since the benefits from one firm's investments spill over to other firms. I estimate my model using U.S. data from 2011 to 2015 on vehicle registrations and charging station investment and identify demand elasticities with variation in federal and state subsidy policies. Counterfactual simulations show that mandating compatibility in charging standards would decrease duplicative investment in charging stations by car manufacturers and increase the size of the electric vehicle market.

February 13 (Monday, Gould Classroom 4220)

Eli Seminar

Katalin Springel (UC Berkeley – Job Market Candidate)
Paper: "Network Externality and Subsidy Structure in Two-Sided Markets: Evidence from Electric Vehicle Incentives"
In an effort to combat global warming and reduce emissions, governments across the world are implementing increasingly diverse incentives to expand the proportion of electric vehicles on the roads. Many of these policies provide financial support to lower the high upfront costs consumers face and build up the infrastructure of charging stations. There is little guidance theoretically and empirically on which governmental efforts work best to advance electric vehicle sales. I model the electric vehicle sector as a two-sided market with network externalities to show that subsidies are non-neutral and to determine which side of the market is more efficient to subsidize depending on key vehicle demand and charging station supply primitives. I use new, large-scale vehicle registry data from Norway to empirically estimate the impact that different subsidies have on electric vehicle adoption when network externalities are present. I present descriptive evidence to show that electric vehicle purchases are positively related to both consumer price and charging station subsidies. I then estimate a structural model of consumer vehicle choice and charging station entry, which incorporates flexible substitution patterns and allows me to analyze out-of-sample predictions of electric vehicle sales. In particular, the counterfactuals compare the impact of direct purchasing price subsidies to the impact of charging station subsidies. I find that between 2010 and 2015 every 100 million Norwegian kroner spent on station subsidies alone resulted in 835 additional electric vehicle purchases compared to a counterfactual in which there are no subsidies on either side of the market. The same amount spent on price subsidies led to only an additional 387 electric vehicles being sold compared to a simulated scenario where there were no EV incentives. However, the relation inverts with increased spending, as the impact of station subsidies on electric vehicle purchases tapers off faster.

February 15 (Wednesday, Attwood Classroom 4230)

Paul Ellickson (University of Rochester)
Paper: Private Labels and Retailer Profitability: Bilateral Bargaining in the Grocery Channel
We examine the role of store branded ``private label'' products in determining the bargaining leverage between retailers and manufacturers in the brew-at-home coffee category. Exploiting a novel setting in which the dominant, single-serve technology was protected by a patent preventing private label entry, we develop a structural model of demand and supply-side bargaining and seek to quantify the impact of private labels on bargaining outcomes. We find that, while bargaining parameters are relatively symmetric across retailers and manufacturers, the addition of private labels alters bargaining leverage by improving the disagreement payoffs of the retailers (relative to the manufacturers), thereby shifting bargaining outcomes in the retailer's favor.

February 24

Kristin Diehl (University of Southern California)
Paper: Savoring an Upcoming Experience Affects Ongoing and Remembered Consumption Enjoyment
 Five studies, using diverse methodologies, distinct consumption experiences, and different manipulations, demonstrate the novel finding that savoring an upcoming consumption experience heightens enjoyment of the experience both as it unfolds in real time (ongoing enjoyment) and how it is remembered (remembered enjoyment). Our theory predicts that the process of savoring an upcoming experience creates affective memory traces that are reactivated and integrated into the actual and remembered consumption experience. Consistent with this theorizing, factors that interfere with consumers’ motivation, ability, or opportunity to form or retrieve affective memory traces of savoring an upcoming experience limit the effect of savoring on ongoing and remembered consumption enjoyment. Affective expectations, moods, imagery, and mindsets do not explain the observed findings.

March 3

Rebecca Hamilton (Georgetown University)
Paper: Learning that You Can’t Always Get What You Want: The Effect of Childhood Socioeconomic Status on Decision Making Resilience
Much of the literature on consumer decision making has focused on choice, implicitly assuming that consumers will be able to obtain what they choose. However, the options consumers choose are not always available to them, either due to limited availability of the options or to consumers’ limited resources. In this research, we examine the impact of childhood socioeconomic status on consumers’ responses to choice restriction. Building on prior work showing that perceived agency and effective coping strategies may differ by socioeconomic status, we hypothesize that consumers socialized in low socioeconomic status environments will be more likely to exhibit two adaptive strategies in response to two different forms of choice restriction. In three studies in which participants encountered unavailability of their chosen alternative, we find that participants of various ages with low (vs. high) childhood socioeconomic status display greater persistence in waiting for their initial choices yet greater willingness to shift when the alternative they have chosen is clearly unattainable. We discuss the theoretical implications of these results and how they contribute to a deeper understanding of the long-term effects of socioeconomic status on consumer behavior.

March 10

Kanishka Misra (University of California, San Diego)
Paper: TBA
Abstract forthcoming

April 7

Selman Erol (University of Pennsylvania – Ph.D. Expected May 2017)
Paper: TBA
Abstract forthcoming

April 21

Derek Rucker (Northwestern University)
Paper: TBA
Abstract forthcoming

Fall 2016

August 24 (Wednesday, Nooyi Classroom 2230)

Jeff Galak (Carnegie Mellon)
Paper: (The Beginnings of) Understanding Sentimental Value
Sentimental value, or the value derived from associations with significant others or events in ones life, is prevalent, important, and, yet, under-researched. I present a broad overview of a new research program designed to define this construct, begin to understand its antecedents, and demonstrate some important consequences for individuals and for firms.

September 9

Jan Van Mieghem  (Northwestern)
Paper: Collaboration and Multitasking in Processing Networks: Humans versus Machines
One of the fundamental questions in operations is to determine the maximal throughput or productivity of a process. Does it matter whether humans or machines execute the various steps in the process? If so, how do we incorporate this difference in our planning and performance evaluation? We propose some answers by discussing two examples: a theoretical analysis and an empirical study.

September 23

Rosanna Smith (Yale Doctoral Student)
Paper: “The Curse of the Original: When Product Enhancements Undermine Authenticity and Value”
Companies often introduce enhancements to their products in order to both stay relevant and increase product appeal. However, companies with iconic status (e.g., Converse, Levi’s, Coca-Cola) are often confronted with a unique challenge: When they introduce product enhancements, even those that unequivocally improve functionality or quality, they may encounter fierce consumer backlash. In the present studies, we identify cases in which product enhancements can backfire and decrease consumer interest. We draw on the concept of authenticity and propose that product enhancements in these cases may be seen as a violation of the original vision for the product and, therefore, may be perceived as less authentic. Across four studies, we document this “curse of the original” as well as its associated psychological mechanisms and boundary conditions.

Paper: ““Closer to the Creator: Temporal Contagion Explains the Preference for Earlier Serial Numbers”
Consumers demonstrate a robust preference for items with earlier serial numbers (e.g., No. 3/100) over otherwise identical items with later serial numbers (e.g., No. 97/100) in a limited edition set. This preference arises from the perception that items with earlier serial numbers are temporally closer to the origin (e.g., the designer or artist who produced it). In turn, beliefs in contagion (the notion that objects may acquire a special essence from their past) lead consumers to view these items as possessing more of a valued essence. Using an archival data set and five lab experiments, the authors find the preference for items with earlier serial numbers holds across multiple consumer domains including recorded music, art, and apparel. Further, this preference appears to be independent from inferences about the quality of the item, salience of the number, or beliefs about market value. Finally, when serial numbers no longer reflect beliefs about proximity to the origin, the preference for items with earlier serial numbers is attenuated. The authors conclude by demonstrating boundary conditions of this preference in the context of common marketing practices.

October 7 (Noon – 1:30 PM, Attwood Classroom 4230)

Eli Seminar

Jia Liu (Columbia University)
Paper: A Semantic Approach for Estimating Consumer Content Preferences from Online Search Queries
We develop an innovative topic model, Hierarchically Dual Latent Dirichlet Allocation (HDLDA), which not only identifies topics in search queries and webpages, but also how the topics in search queries relate to the topics in the corresponding top search results. Using the output from HDLDA, a consumer’s content preferences may be estimated on the fly based on their search queries. We validate our proposed approach across different product categories using an experiment in which we observe participants’ content preferences, the queries they formulate, and their browsing behavior.  Our results suggest that our approach can help firms extract and understand the preferences revealed by consumers through their search queries, which in turn may be used to optimize the production and promotion of online content.

October 21

Joe Alba (University of Florida)
Paper: Belief in Free Will: Implications for Practice and Policy
The conviction one holds about free will serves as a foundation for the views one holds about the consumption activities of other consumers, the nature of social support systems, and the constraints that should or should not be placed on industry. Across multiple paradigms and contexts, we assess people’s beliefs about the control consumers have over consumption activities in the face of various constraints on agency. We find that beliefs regarding personal discretion are robust and resilient, consistent with our finding that free will is viewed as noncorporeal. Nonetheless, we also find that these beliefs are not monolithic but vary as a function of identifiable differences across individuals and the perceived cause of behavior, particularly with regard to physical causation. Taken together, the results support the general wisdom of libertarian paternalism as a framework for public policy but also point to current and emerging situations in which policy makers might be granted greater latitude.

October 28

Tony Ke (MIT)
Paper: Optimal Learning before Choice
A Bayesian decision maker is choosing among multiple alternatives with uncertain payoffs and an outside option with known payoff. Before deciding which one to adopt, the decision maker can purchase sequentially multiple informative signals on each of the available alternatives. To maximize the expected payoff, the decision maker solves the problem of optimal dynamic allocation of learning efforts as well as optimal stopping of the learning process. We show that the optimal learning strategy is of the type of consider-then-decide. The decision maker considers an alternative for learning or adoption if and only if the expected payoff of the alternative is above a threshold. Given several alternatives in the decision maker's consideration set, we find that sometimes, it is optimal for him to learn information from an alternative that does not have the highest expected payoff, given all other characteristics of all the alternatives being the same. If the decision maker subsequently receives enough positive informative signals, the decision maker will switch to learning the better alternative; otherwise the decision maker will rule out this alternative from consideration and adopt the currently most preferred alternative. We find that this strategy works because it minimizes the decision maker's learning efforts. It becomes the optimal strategy when the outside option is weak, and the decision maker's beliefs about the different alternatives are in an intermediate range.

November 4

Christopher Hsee (University of Chicago)
Paper: TBA
Abstract forthcoming.

November 18 (Noon – 1:30 PM)

Scott Schriver (Columbia University)
Paper: Optimizing Content and Pricing Strategies for Digital Video Games

The video game industry has experienced a wave of disruption as consumers rapidly shift to acquiring and consuming content through digital channels.  Incumbent game publishers have struggled to adapt their content and pricing strategies to shifting consumption patterns and increased competition from low cost independent suppliers. Recently, game publishers have pursued new business models that feature downloadable content (DLC) services offered in conjunction with or as a replacement for traditional physical media. While service-based models can potentially extract additional surplus from the market by allowing for more customized content bundles and pricing than with physically distributed media, exploiting these opportunities poses a  challenge to firms who must attempt to optimize their offerings over a formidably complex decision space.

In this paper, we develop a structural framework to facilitate the recovery of consumer preferences for game content and the optimization of firm content/price strategies.  Our approach is to leverage rich covariation in observed content consumption and DLC service subscriptions to infer consumer content valuations and price sensitivities. We devise a joint model of video game activity and demand for downloadable content, where consumers sequentially make (discrete) DLC subscription choices followed by (continuous) choices of how much to play.  Our model accounts for forward-looking consumer expectations about declining content prices and attendant concerns for dynamic selection bias in our demand estimates.  We document evidence of heterogeneous preferences for content and significant effects of DLC availability on game usage.  Our counterfactual experiments suggest that compressing the DLC release cycle and moving to a recurring fee structure are both viable ways to increase revenues.

December 2

Drazen Prelec (MIT)
Paper: Aggregating information: The meta-prediction approach
The twin problems of eliciting and aggregating information arise at many levels, including the social (wisdom-of-the-crowd) and the neural (ensemble voting). The first, elicitation problem involves crafting incentives that ensure that incoming signals are honestly reported; the second, aggregation problem involves selecting the best value from a distribution of reported values.  Current aggregation methods take as input individuals' beliefs about the right answer, expressed with votes or, more precisely, with probabilities. However, one can show that any belief-based algorithm can be defeated by even simple problems. An alternative approach that is guaranteed to work in theory, assumes that individuals with different opinions share an implicit possible worlds model whose parameters are unknown, but which can be estimated from their predictions of the opinion distribution. Using this additional information, Bayes' rule selects individuals who would be least surprised by known evidence. Their answer defines the best estimate for the group. I will review some old and some new evidence bearing on this approach, and discuss extensions to market research. 

December 9

Sunita Sah (Cornell University)
Paper: Conflict of Interest Disclosure and Appropriate Restraint: The Power of Professional Norms
Conflicts of interest present an incentive for professionals to give biased advice. Disclosing, or informing consumers about, the conflict is a popular solution for managing such conflicts. Prior research, however, has found that advisors who disclose their conflicts give more biased advice. Across three experiments, using monetary incentives to create real conflicts of interest, I show that disclosure can cause advisors to significantly decrease or increase bias in advice based on the context in which the advice is provided. Drawing from norm focus theory and the logic of appropriateness literature, this investigation examines how professional norms cause advisors to either succumb to bias (by believing that disclosure absolves them of their responsibility—caveat emptor) or restrain from bias (by reminding advisors of their responsibility towards advisees). Professional norms significantly alter how disclosure affects advisors—increasing bias in advice in business settings but decreasing bias in medical settings. These findings not only disconfirm previous assumptions regarding conflict of interest disclosures but also highlight the importance of context when understanding the potential and pitfalls of disclosure. 

December 16

Przemek Jeziorski  (UC Berkeley)
Paper: Adverse Selection and Moral Hazard in a Dynamic Model of Auto Insurance
We measure risk-related private information and investigate its importance in a setting where individuals are able to modify risk ex-ante through costly effort. Our analysis is based on a model of endogenous risk production and contract choice. It exploits data from multiple years of contract choices and claims by customers of a major Portuguese auto insurance company. We additionally use our framework to investigate the relative effectiveness of dynamic versus static contract features in incentivizing effort and inducing sorting on private risks, as well as to assess the welfare costs of mandatory liability insurance.