Economics Insights @ CBS

Returns policies are usually thought of as being a way to insure retailers against excess inventory. The work of Pellegrini (1986), Chu (1993), Lin (1993) and Padmanabhan and Png (1997) highlights the fact that there is considerably more to returns policies than just a mechanism for insurance. Our work identifies a heretofore undocumented rationale for returns policy: its role in learning the demand for a new product. The model of manufacturer?retailer interaction assumes that the demand is uncertain but correlated across time periods.

In an empirical study using five real-world creative teams from an advertising agency, participants were given a strategic brief for a new beverage product and asked to design the layout for a print ad. Think-aloud concurrent protocols obtained from each teams copywriter, art director, and the two working together were analyzed to examine the creative process and its relationship to the created advertisement. Interpretive analyses of the protocols reveal that the teams access culturally available plot patterns but in different ways.

Permission marketing requires consumers' consent before a Web site can track them with cookies, or send them marketing email, or sell their data to another company. Yet a study by Cyber Dialogue found that 69% of U.S. Internet users did not know they had given their consent to be included on email distribution lists. Here's how it's done: Using the right combination of question framing and default answer, an online organization can almost guarantee it will get the consent of nearly every visitor to its site.