In Demand
Reputation Inflation
Apostolos Filippas, John Horton & Joseph Golden
Marketing Science, forthcoming
Abstract:
We show that average buyer ratings of sellers have grown substantially more positive over time in five online marketplaces. Although this increase could by explained by (i) marketplace improvements that increased rater satisfaction, it could also be caused by (ii) "reputation inflation," with raters giving higher ratings without being more satisfied. We present a method to decompose the growth in average ratings into components attributable to these two reasons. Using this method in one marketplace where we have extensive transaction-level data, we find that much of the observed increase in ratings is attributable to reputation inflation. We discuss the negative informational implications of reputation inflation and consider the likely causes.
The Pursuit of Meaning and the Preference for Less Expensive Options
Nicole Mead & Lawrence Williams
Journal of Consumer Research, forthcoming
Abstract:
Finding meaning in life is a fundamental human motivation. Along with pleasure, meaning is a pillar of happiness and well-being. Yet, despite the centrality of this motive, and despite firms' attempts to appeal to this motive, scant research has investigated how the pursuit of meaning influences consumer choice, especially in comparison to the study of pleasure. While previous perspectives would suggest that the pursuit of meaning tilts consumers toward high-quality products, we predicted and found the opposite. As compared to a pleasure or (no goal) baseline condition, 6 studies demonstrate that the pursuit of meaning causes people to consider how they can otherwise use their money (opportunity costs) which in turn leads to a preference for less expensive goods. This effect is robust across multiple product categories and usage situations, including both experiential and material purchases, and is obtained even when the more expensive product is perceived to deliver greater meaning. For participants pursuing meaning, making opportunity costs salient has no effect on their choices, and encouraging opportunity cost neglect increases their willingness to pay for a more expensive item. This research thus provides an initial answer as to how the pursuit of meaning shapes consumer choice processes and preferences.
A "Sideways" Supply Response in California Winegrapes
Sarah Consoli et al.
Journal of Wine Economics, February 2022, Pages 42-63
Abstract:
This paper explores growers' supply response to the 2005 "Sideways effect" demand shock (Cuellar, Karnowsky, and Acosta, 2009) triggered by the 2004 release of the movie Sideways. We use a modified difference-in-difference approach to evaluate the supply response in California and regional supply response differences within California. We use U.S. Department of Agriculture data for the period 1999-2012 and find evidence of a supply response in the post-release period that is consistent with the "Sideways effect" on wine demand. The positive supply response for Pinot Noir is stronger than the negative response for Merlot and concentrated in lower value Central Valley vineyards.
Do Fans Impact Sports Outcomes? A COVID-19 Natural Experiment
Jeffrey Cross & Richard Uhrig
Journal of Sports Economics, forthcoming
Abstract:
This paper studies the effect of fan attendance on home field advantage in top European soccer leagues. We exploit exogenous variation in the level of fan attendance driven by COVID-19 mitigation policies and find that the home field advantage, as measured by home minus away (expected) goals, is reduced by more than 50% across the English Premier League, German Bundesliga, Italian Serie A, and Spanish La Liga. This leads to a decrease in probability for a home win, indicating that these goals are pivotal with respect to match outcomes.
Get Your Science out of Here: When Does Invoking Science in the Marketing of Consumer Products Backfire?
Aviva Philipp-Muller, John Costello & Rebecca Walker Reczek
Journal of Consumer Research, forthcoming
Abstract:
In this research, we propose that although consumers view the scientific process as competent, they also perceive it as cold. Across ten experimental studies, we demonstrate that these lay beliefs impact consumers' reactions to marketers touting the science behind their brands. Specifically, since hedonic attributes are associated with warmth, the coldness associated with science is conceptually disfluent with the anticipated warmth of hedonic products and attributes, reducing product valuation. In contrast, when products are positioned as utilitarian, invoking science in marketing appeals has a positive effect, as the perceived competence of the scientific process is more compatible with the competence associated with utilitarian products. We further demonstrate that when the necessity of science to create a hedonic product is made salient and thus more fluent, this backfire effect is attenuated. Finally, we identify three theoretically and practically relevant individual differences (endorsement of the lay belief, trust in scientists, and whether the consumer works in a STEM field) that moderate the backfire effect of pairing science with hedonically positioned products.
The Importance of Selling Formats: When Integrating Purchase and Quantity Decisions Increases Sales
Kristen Duke & On Amir
Marketing Science, forthcoming
Abstract:
Customers must often decide on the quantity to purchase in addition to whether to purchase. The current research introduces and compares the quantity-sequential selling format, in which shoppers resolve the purchase and quantity decisions separately, with the quantity-integrated selling format, where shoppers simultaneously consider whether and how many to buy. Although retailers often use the sequential format, we demonstrate that the integrated format can increase purchase rates. A field experiment conducted with a large technology firm found that quantity integration yielded considerably higher sales, amounting to an increase of more than $1 million in annual revenue. To demonstrate robustness and explore various contributing mechanisms, a series of laboratory experiments test and control for different elements of the selling formats. The results suggest that quantity integration can change the psychology of making a purchase: the integrated format anchors customers later in the decision-making funnel than the sequential format and additional implementation elements (e.g., the specific call-to-action used) may contribute to an increased effect. More broadly, this work sheds light on mechanisms underlying the influence of selling formats and the importance of how everyday choices are structured.