On Brand
The Upside of Negative: Social Distance in Online Reviews of Identity-Relevant Brands
Nailya Ordabayeva, Lisa Cavanaugh & Darren Dahl
Journal of Marketing, forthcoming
Abstract:
Conventional wisdom in marketing emphasizes the detrimental effects of negative online reviews for brands. An important question is whether some firms could more effectively manage negative reviews to improve brand preference and outcomes. To address this question, our research examines how customers respond to online reviews of identity-relevant brands in particular, which have been overlooked in the online reviews literature. Eight studies (field data and experiments featuring consequential and hypothetical behaviors) show that negative online reviews may not be so detrimental for identity-relevant brands, especially when those reviews originate from socially distant (but not socially close) reviewers. This occurs because a negative review of an identity-relevant brand can pose a threat to a customer's identity, prompting the customer to strengthen their relationship with the identity-relevant brand. To document the underlying process, we show that this effect does not emerge when the review is positive or the brand is identity-irrelevant. Importantly, we identify circumstances when negative reviews can actually produce positive outcomes (higher preference) for identity-relevant brands over no reviews or even positive reviews. By demonstrating the upside of negative reviews for identity-relevant brands, our findings have important implications for marketing theory and practice.
Losing More than Money: Organizations' Prosocial Actions Appear Less Authentic When Their Resources are Declining
Arthur Jago, Nathanael Fast & Jeffrey Pfeffer
Journal of Business Ethics, January 2022, Pages 413-425
Abstract:
Companies often benefit from others' attributions of moral conviction for prosocial behavior, for example, attributions that a company has a sincere moral desire to improve the environment when behaving sustainably. Across four studies, we explored how organizations' changing resource positions influenced people's attributions for the motivations underlying prosocial organizational behaviors. Observers attributed less moral conviction following prosocial behavior when they believed an organization was losing (vs. gaining) economic resources (Studies 1 and 2). This effect was primarily a "penalty" assessed against organizations that were losing resources, as opposed to a "reward" given to organizations gaining resources (Study 3). Finally, we found that this effect occurred because people perceive organizations that are losing resources as more situationally constrained, leading them to attribute less dispositional moral conviction (Study 4). We discuss theoretical and practical implications stemming from how changes in resource access can lead people to be more skeptical of organizations' motivations following prosocial behavior.
Unintentional Inception: When a Premium Is Offered to Unintentional Creations|
Alexander Fulmer & Taly Reich
Personality and Social Psychology Bulletin, forthcoming
Abstract:
Creations can be fundamentally intended or unintended from their outset. Past work has focused on intentional creations, finding that people place a premium on effort. We examine the role of unintentionality in the inception of creations in six studies using a variety of stimuli (N = 1,965), finding that people offer a premium to unintentional creations versus otherwise identical intentional creations. We demonstrate that the unintentionality involved in the inception of a creation results in greater downward counterfactual thought about how the unintentional creation may have never been created at all, and this in turn heightens perceptions that the creation was a product of fate, causing people to place a premium on such creations. We provide evidence for this causal pathway using a combination of mediation and moderation approaches. Further, we illuminate that this premium is not offered when a negative outcome is ascribed to an unintentional creation.
Platforms, Power, and Promotion: Evidence from Spotify Playlists
Luis Aguiar & Joel Waldfogel
Journal of Industrial Economics, September 2021, Pages 653-691
Abstract:
Many online markets are dominated by a handful of platforms, raising concerns about the exercise of market power in the digital age. Spotify has emerged as the leading interactive music streaming platform, and we assess its power by measuring the impact of its promotion decisions - via platform-operated playlists - on the success of songs and artists. We employ discontinuity and instrumental variables identification approaches and find large and significant effects of playlist inclusion on success. Our results provide direct evidence of a prominent platform's power and suggest a need for continued scrutiny of how platforms exercise their power.
The Fickle Crowd: Reinforcement and Contradiction of Quality Evaluations in Cultural Markets
Minjae Kim & Daniel DellaPosta
Organization Science, forthcoming
Abstract:
We clarify conditions under which two seemingly contradictory yet widely observed tendencies occur in cultural markets where amateur connoisseurs evaluate products - reinforcement of previous consensus and contradiction of that same consensus. We start from prior work's insight that achieving "distinction" requires that evaluators display tastes demonstrating higher skills of discernment and standards that are acknowledged as legitimate by others. Based on this, we argue that evaluators reinforce prior evaluations of products to demonstrate that they share the same quality standards as their peers, but they selectively contradict prior evaluations by downgrading widely acclaimed products, because doing the latter makes the evaluator appear to have even more sophisticated tastes than their peers. We test this account using 1.66 million reviews from an online platform where amateur connoisseurs publicly evaluate beers. Our analyses support an endogenous model explaining why and when evaluators may contradict existing evaluations even though a group plausibly sharing the same quality standards may have established such evaluations in the first place.
The More You Ask, the Less You Get: When Additional Questions Hurt External Validity
Ye Li et al.
Journal of Marketing Research, forthcoming
Abstract:
Researchers and practitioners in marketing, economics, and public policy often use preference elicitation tasks to forecast real-world behaviors. These tasks typically ask a series of similarly-structured questions. The authors posit that every time a respondent answers an additional elicitation question, two things happen: (1) they provide information about some parameter(s) of interest, such as their time preference or the partworth for a product attribute, and (2) the respondent increasingly adapts to the task - i.e., using task-specific decision processes specialized for this task that may or may not apply to other tasks. Importantly, adaptation comes at the cost of potential mismatch between the task-specific decision process and real-world processes that generate the target behaviors, such that asking more questions can reduce external validity. The authors used mouse- and eye-tracking to trace decision processes in time preference measurement and conjoint choice tasks: Respondents increasingly relied on task-specific decision processes as more questions were asked, leading to reduced external validity for both related tasks and real-world behaviors. Importantly, the external validity of measured preferences peaked after as few as seven questions in both types of tasks. When measuring preferences, less can be more.
Auctions for Charity: The Curse of the Familiar
Jeffrey Carpenter, Damian Damianov & Peter Hans Matthews
International Economic Review, forthcoming
Abstract:
Auctions and raffles are commonly used to fund public goods. We run fundraising events in the field at the meetings of a well-known service organization across the United States to examine the fundraising properties of five mechanisms: one that is common in the literature, two that are familiar to practitioners in the field, and two that are new. Consistent with a novel model assuming independent private attachments to the charity, we find large differences in performance between the two most familiar formats, but these disparities are dwarfed by the differentials achieved using the new and less common formats.
How Do Financial Constraints Affect Product Pricing? Evidence from Weather and Life Insurance Premiums
Shan Ge
Journal of Finance, February 2022, Pages 449-503
Abstract:
I identify the effects of financial constraints on firms' product pricing decisions, using insurance groups containing both life and property & casualty (P&C) divisions. Following P&C divisions' losses, life divisions change prices in a manner that can generate more immediate financial resources: premiums fall (rise) for life policies that immediately increase (decrease) insurers' financial resources. Premiums change more in groups that are more constrained. Life divisions increase transfers to P&C divisions, suggesting P&C divisions' shocks are transmitted to life divisions. Results hold when instrumenting for P&C divisions' losses with exposure to unusual weather damages, implying that the effects are causal.