Conference Sessions - Jesse H. Jones Graduate School of ...

■ FA07
Founders I
Panel Session: Cases? Projects? Simulations? Problem
Sets? What’s the Best Way to Teach Marketing Science?
Cluster: Special Sessions
Invited Session
Chair: Gary Lilien, Pennsylvania State University, 484 Business Building,
University Park, PA, United States of America, GLilien@psu.edu
Co-Chair: Arvind Rangaswamy, Pennsylvania State University, University
Park, PA, United States of America, arvindr@psu.edu
1 - Cases? Projects? Simulations? Problem Sets? What’s the Best Way
to Teach Marketing Science?
Moderators: Gary Lilien and Arvind Rangaswamy,
Panelists: Dominique Hanssens, Ujwal
Kayande, Charlotte Mason, Arnaud De Bruyn,
Many of us have struggled to find the best way to teach our specialty, marketing
science. Should we use traditional lectures and problem sets? What about cases?
What about simulations? What about projects? And what role should generalized or
specialized software play? In this special session, each panelist will provide an brief
overview of what he or she has been doing in the MBA/EMBA classroom, sharing
what has worked, what has not and what developments he or she sees that the
marketing science community should be aware of. We will then open the discussion
up to the audience to share their experiences and ask questions of the panelists.
■ FA08
Founders II
The Long Run Consequences of Short Run Decisions I
Cluster: Special Sessions
Invited Session
Chair: K. Sudhir, Yale School of Management, Yale School of Management,
New Haven, CT, United States of America, k.sudhir@yale.edu
Chair: Ahmed Khwaja, Assistant Professor, Yale University, New Haven,
CT, United States of America, ahmed.khwaja@yale.edu
1 - Taste and Health: Balancing and Highlighting in Choices Across
Complementary Categories
Hai Che, University of Southern California, Los Angeles, CA, United
States of America, haiche@marshall.usc.edu, Botao Yang, K. Sudhir
Behavioral research using laboratory experiments suggests that some consumers
“balance” healthy versus tasty choices across complementary categories when having
a meal, while others “highlight” one attribute such as taste or health across both
categories. To-date, there has been little empirical research using field data. We
therefore examine consumers’ choices of tasty versus healthy foods across
complementary food categories in grocery stores to identify evidence of such behavior
in a field setting. Given only purchase data, we impute household inventory based on
past purchases and study how the inventory of “tasty” or “healthy” foods in one
category affects the choice of tasty or healthy foods in a complementary category. We
find evidence of both highlighting and balancing consumer segments. Thus far the
literature on cross-category choices has found that customers tend to have positive
correlation in preferences for attributes across categories (i.e., a price or feature
sensitive customer tends to be price or feature sensitive across categories). This is
because existing models do not allow for heterogeneity in correlations for preferences
across categories. Our modeling approach allows for heterogeneity in correlations for
attribute preferences; thus allowing us to uncover evidence of balancing between
attributes across categories using field data.
2 - Information Acquisition and Ex-ante Moral Hazard
Jian Ni, Johns Hopkins University, Baltimore, MD,
United States of America, jni@jhu.edu, Nitin Mehta
In contractual markets like insurance or credit, it is the firm’s interest that the
consumer engages frequently in information acquisition, but the consumer may not
have the incentive to do so. We use the health insurance market as the example,
more particularly chronic illnesses (e.g., prostate cancer). For such illnesses, the cost
of treatments increases significantly with the severity of the illness. Thus it is in the
insurer’s interest that consumers get regular diagnostic checkups before and after they
are diagnosed with the illness (regular checkups from early detection of the illness
result in low treatment costs in the future; and regular checkups after the diagnosis of
the illness result in the consumer to consume the ‘right’ treatment that is specific to
the stage of his illness, which consequently leads to lower cost of treatments in the
future). However, consumers may not have the incentive to go for regular checkups
if their monetary (out of pocket expenses for getting checkups) or non monetary
costs (time and effort) are high. The questions that we address are: (i) what is the
impact of consumer’ information acquisition behavior (how regularly they go for
checkups) on the firm’s (insurance company’s) long term profits? (ii) What are the
magnitudes of monetary and non-monetary costs of information acquisition, and
how do they vary over types of contracts (insurance plans) and consumer
demographics? (iii) What strategies can firms employ in terms of communication
tactics and contract design to reduce consumers’ monetary and non-monetary costs,
so that they engage in information acquisition on a more frequent basis?
39
MARKETING SCIENCE CONFERENCE – 2011 FA09
3 - Changing the Tone: The Dynamics of Political Advertising over
the Election Cycle
Ron Shachar, Arison School of Business, The Interdisciplinary Center,
Herzliya, Israel, shachar@duke.edu, Paul Ellickson,
Mitch Lovett
This paper empirically investigates the dynamic incentives determining when and
how much to advertise, along with the optimal choice of tone. We focus on political
advertising in closely contested U.S. congressional races. In particular, we investigate
the tendency for close races to become more negative as election day gets closer and
establish that candidates generally match on the tone of their advertising with a
tendency to match more on the negative than positive. We offer an explanation for
the tendency to go negative that suggests negativity in close races is not a foregone
conclusion. We examine empirically the dynamic implications associated with
changing the volume and tone of advertising over an election cycle. To do so, we
propose and estimate a strategic model of sequential decision-making in which
candidates react to the arrival of new information as well as the strategic actions of
their rivals in forming an optimal advertising policy. We estimate the structural
parameters of the model using a full solution approach, characterized by a system of
sequential decision problems with mixed controls. We use the structural estimates
from the model to investigate the degree to which government policy can impact the
equilibrium tone of the race, thereby altering the tone of political discourse.
4 - A Dynamic Model of Thirst and Beverage Consumption
Ahmed Khwaja, Assistant Professor, Yale University, New Haven, CT,
United States of America, ahmed.khwaja@yale.edu,
K. Sudhir, Guofang Huang
The physical need to consume beverages due to thirst occurs several times a day.
Apart from satisfying the physical thirst need, beverages also satisfy a variety of other
short term needs such as “quick pickup,” “refreshing fun” etc. Given the frequency
with which beverages are consumed, they also have significant long-term health
consequences. The goal of the paper is to build and estimate an “as-if” model of thirst
and beverage consumption that helps understand the consumer tradeoff between the
short-run needs and their long-term consequences. Researchers rarely have
consumption data, hence they make inferences about consumer’s utility from
consumption thorough purchase data. Here we exploit a rare dataset with
information not only what a consumer consumed in every two hour period, but also
the context, moods and stated objectives captured in real time over a period of two
weeks. This allows us to understand how consumers trade-off long-term and shortterm
needs in routine consumption. Our modeling framework can be useful in
studying a variety of health-related issues such as obesity, cancer etc., which are
significantly affected by routine consumer short-run choices of food, beverages and
cigarettes etc.
■ FA09
Founders III
Retailing II: General
Contributed Session
Chair: Manish Gangwar, Assistant Professor, Indian School of Business, ISB
Campus, AC2-L1-2113, Gachibowli, Hyderabad, AP, 500032, India,
manish_gangwar@isb.edu
1 - The Impact of Retailers’ Corporate Social Responsibility on Price
Fairness Perceptions and Loyalty
Kusum Ailawadi, Charles Jordan 1911 TU’12 Professor of Marketing,
Tuck School at Dartmouth, Dartmouth College,
100 Tuck Hall, Hanover, NH, 03755, United States of America,
kusum.ailawadi@dartmouth.edu, Jackie Luan, Scott Neslin,
Gail Taylor
We study the effect of four key dimensions of Corporate Social Responsibility in the
grocery retail industry on consumers’ perceptions of the fairness of retailers’ prices
and their attitudinal and behavioral loyalty towards those retailers. Our model
controls for other key drivers of retail store patronage and for heterogeneity in CSR
response, and we estimate it using data on consumers’ shopping behavior and their
perceptions of the retailers they patronize. We model price fairness as a (partial)
mediator of the CSR-loyalty relationship. CSR may affect price fairness directly
whereby a high price is perceived as more acceptable if part of the value from the
consumer-firm exchange is seen as benefiting society. It may also affect price fairness
indirectly through cost and profit judgments whereby consumers associate CSR with
higher costs or/and lower profit for the retailer. We estimate these direct and indirect
effects and quantify the net impact of retailers’ CSR on consumer loyalty. Among the
four CSR dimensions in our study, we find that environmental friendliness has the
weakest effect on both price fairness and behavioral loyalty. Local product sourcing,
from which consumers personally benefit in their exchange with the retailer, has the
strongest direct effect on behavioral loyalty, though it delivers no added boost
through price fairness. The remaining two CSR dimensions, fair treatment of
employees and community support, have intermediate direct effects on behavioral
loyalty and the indirect effects through price fairness account for approximately 10%
of the total effect.