Publications

When do brands get credit for contributing to the greater good? Prior research has shown that consumers reward brands for prosocial initiatives (e.g., corporate philanthropy, social responsibility, cause marketing) in line with the perceived purity of their motives. We report four experiments demonstrating that consumers interpret the order in which brands launch prosocial initiatives as a signal of their underlying motivations for doing good. Whereas prosocial first movers appear to care genuinely about the causes they support, prosocial followers (i.e., those that imitate the prosocial actions of other brands) typically seem to have more selfish intentions, even if their initiatives have an equal or greater social impact. This discrepancy in perceived motives, in turn, serves as an additional source of first mover preference, above and beyond previously studied first mover effects and unique to greater good marketing contexts. It also leads consumers to reward followers for launching more original prosocial initiatives, even if these seem less impactful for society. These findings bridge literatures on prosocial behavior and entry order, and they offer practical insight for brands looking to combine profits and purpose.

Accurately estimating the size of the undocumented immigrant population is a critical component of assessing the health and security risks of undocumented immigration to the United States. To provide one such estimate, we use data from the Mexican Migration Project (MMP), a study that includes samples of undocumented Mexican immigrants to the United States after their return to Mexico. Of particular interest are the departure and return dates of a sampled migrant's most recent sojourn in the United States, and the total number of such journeys undertaken by that migrant household, for these data enable the construction of data-driven undocumented immigration models. However, such data are subject to an extreme physical bias, for to be included in such a sample, a migrant must have returned to Mexico by the time of the survey, excluding those undocumented immigrants still in the United States. In our analysis, we account for this bias by jointly modeling trip timing and duration to produce the likelihood of observing the data in such a “snapshot” sample. Our analysis characterizes undocumented migration flows including single-visit migrants, repeat visitors, and “retirement” from circular migration. Starting with 1987, we apply our models to 30 annual random snapshot surveys of returned undocumented Mexican migrants accounting for undocumented Mexican migration from 1980 to 2016. Scaling to population quantities and supplementing our analysis of southern border crossings with estimates of visa overstays, we produce lower bounds on the total number of undocumented immigrants that are much larger than conventional estimates based on U.S.-based census-linked surveys, and broadly consistent with the more recent estimates reported by Fazel-Zarandi, Feinstein, and Kaplan.

Ten years after the Federal Reserve’s crisis-era bank stress test, it is time to recalibrate the stress tests for “peacetime.” Outside of a crisis, supervisors should tailor stress tests to focus on their comparative advantages by taking a macroprudential focus, with severe scenarios that enable them to learn about emerging risks in both traditional and shadow banking sectors. In peacetime, also, supervisors should emphasize risk- management practices and be wary of forcing rapid changes in capital levels for individual banks, while linking stress-test results with countercyclical capital buffers across the system.

The mere fact that consumers are targeted by advertisements can affect their inference about the expected utility of a product. We build a micromodel where multiple firms compete through targeted advertising. Consumers make inferences from targeted advertising about their potential match values for the product category, as well as the advertising firm’s unobserved quality. We show that in equilibrium, upon being targeted by a firm, consumers make more positive inferences about the product category and the firm’s quality. With such improved beliefs, a targeted consumer is more likely to engage in a costly search throughout the category. We find that the increase in consumer search creates an advertising spillover beyond the level of the mere awareness effects of advertising and that firms’ equilibrium level of targeted advertising can be nonmonotonic in targeting accuracy. Additionally, we show that sometimes it can be optimal for firms to relinquish customer data and instead engage in nontargeted advertising. The results provide insights into the tradeoffs between advertising reach and targeting accuracy.

The mere fact that consumers are targeted by advertisements can affect their in- ference about the expected utility of a product. We build a micromodel where multiple firms compete through targeted advertising. Consumers make inferences from targeted ad- vertising about their potential match values for the product category, as well as the adver- tising firm’s unobserved quality. We show that in equilibrium, upon being targeted by a firm, consumers make more positive inferences about the product category and the firm’s quality. With such improved beliefs, a targeted consumer is more likely to engage in a cost- ly search throughout the category. We find that the increase in consumer search creates an advertising spillover beyond the level of the mere awareness effects of advertising and that firms’ equilibrium level of targeted advertising can be nonmonotonic in targeting accuracy. Additionally, we show that sometimes it can be optimal for firms to relinquish customer data and instead engage in nontargeted advertising. The results provide insights into the tradeoffs between advertising reach and targeting accuracy.

The effect of changes in market interest rates on bank lending rates will depend on the regulatory
environment and the structure of banking markets. A new, consistent measure of the average
interest rate charged on new bank loans since the late 1930s shows a sharp change in the
behavior of bank business loan rates around 1970. Before that time, loan rates reacted only
sluggishly to changes in short-term market rates. By contrast, by the mid-1980s loan rates moved
essentially one-for-one with short-term market rates. The 1970s represent a transitional phase. I
explain the earlier muted response of loan rates to market rates as the result of an implicit
contract between banks and their borrowers that helped to smooth their profitability. This model
also shows how changes in the regulatory and banking environment, including the gradual
erosion of Regulation Q limits on deposit interest rates and increased access to short-term capital
markets by businesses between the late 1960s and the early 1980s undermined this implicit
contract, leading to loan pricing that followed market rates closely. A range of empirical and
narrative evidence from before, during, and after the change in loan rate behavior supports this
explanation.

Technological innovations are creating new products, services, and markets that satisfy enduring consumer needs. These technological innovations create value for consumers and firms in many ways, but they also disrupt psychological ownership––the feeling that a thing is “MINE.” The authors describe two key dimensions of this technology-driven evolution of consumption pertaining to psychological ownership: (1) replacing legal ownership of private goods with legal access rights to goods and services owned and used by others and (2) replacing “solid” material goods with “liquid” experiential goods. They propose that these consumption changes can have three effects on psychological ownership: they can threaten it, cause it to transfer to other targets, and create new opportunities to preserve it. These changes and their effects are organized in a framework and examined across three macro trends in marketing: (1) growth of the sharing economy, (2) digitization of goods and services, and (3) expansion of personal data. This psychological ownership framework generates future research opportunities and actionable marketing strategies for firms aiming to preserve the positive consequences of psychological ownership and navigate cases for which it is a liability.

University students have been particularly affected by the COVID-19 pandemic. We present results from the first wave of the Global COVID-19 Student Survey, which was administered at 28 universities in the United States, Spain, Australia, Sweden, Austria, Italy, and Mexico between April and October 2020. The survey addresses contemporaneous outcomes and future expectations regarding three fundamental aspects of students’ lives in the pandemic: the labor market, education, and health. We document the differential responses of students as a function of their country of residence, parental income, gender, and for the US their race.