Marketing

Paper presenting the relationship between economic theory and the financial results of marketing activities.  Included empirical findings based on company data.

Media firms compete in two connected markets. They face rivalry for the sale of content to consumers, and at the same time, they compete for advertisers seeking access to the attention of these consumers. We explore the implications of such two-sided competition on the actions and source of profits of media firms. One main conclusion we reach is that media firms may charge higher content prices in a duopoly than in a monopoly.

Many new products (e.g., PDA phones) share features with multiple categories, but are also significantly different from each of these categories. When consumers encounter such a product, they may create a new subcategory (e.g., smart phones) to accommodate it. In such situations, consumers must decide where to position the new subcategory. We develop the Category Activation Model (CAM) to predict where within a category structure consumers are likely to position a subcategory that they have created to accommodate a new product that could potentially belong to multiple product categories.

Product and waste take-back is becoming more regulated by countries to protect the environment. Such regulation puts an economic burden on firms, while creating fairness concerns and potentially even missing its primary target: environmental benefits. This research discusses the economic and environmental impacts of extended producer responsibility type of legislation and identifies efficiency conditions.

Over the past few years, firms in the travel and entertainment industries have begun using novel sales strategies for revenue management. In this chapter, we study a selling strategy called opaque selling, in which firms guarantee one of several fully specified products, but hide the identity of the product that the consumer will actually obtain until after the purchase is completed. Several firms such as Hotwire, Priceline, and Mystery Flights engage in opaque selling of travel products. The academic literature in this area is recent and evolving.

Nearly every decision a person makes is restricted in some way. While we are painfully aware of some of these restrictions, others go largely undetected. This paper presents a conceptual framework for understanding how restrictions interact with situational and individual characteristics, as well as goals to influence behavior. Implications for overlooked research opportunities in choice modeling are presented and discussed.

This research examines how the reliance on emotional feelings as a heuristic influences the proposal of offers in negotiations. Results from three experiments based on the classic ultimatum game show that, compared to proposers who do not rely on their feelings, proposers who rely on their feelings make less generous offers in the standard ultimatum game, more generous offers in a variant of the game allowing responders to make counteroffers, and less generous offers in the dictator game where no responses are allowed.

We develop a model of customer channel migration and apply it to a retailer that markets over the Web and through catalogs. The model (1) identifies the key phenomena required to analyze customer migration, (2) shows how these phenomena can be modeled, and (3) develops an approach for estimating the model. The methodology is unique in its ability to accommodate heterogeneous customer responses to a large number of distinct marketing communications in a dynamic context.

This research models the dynamics of customer relationships using typical transaction data. Our proposed model permits not only capturing the dynamics of customer relationships but also incorporating the effect of the sequence of customer-firm encounters on the dynamics of customer relationships and the subsequent buying behavior. Our approach to modeling relationship dynamics is structurally different from existing approaches.