Word of Mouth
Authentic First Impressions Relate to Interpersonal, Social, and Entrepreneurial Success
David Markowitz et al.
Social Psychological and Personality Science, forthcoming
Abstract:
This article examines how verbal authenticity influences person perception. Our work combines human judgments and natural language processing to suggest verbal authenticity is a positive predictor of interpersonal interest (Study 1: 294 dyadic conversations), engagement with speeches (Study 2: 2,655 TED talks), entrepreneurial success (Study 3: 478 Shark Tank pitches), and social media engagements (Studies 4a–c; N = 387,039 Tweets). We find that communicating authenticity is associated with increased interest in and perceived connection to another person, more comments and views for TED talks, receiving a financial investment from investors, and more social media likes and retweets. Our work is among the first to evaluate how authenticity relates to person perception and manifests naturally using verbal data.
The Economics of Content Moderation: Theory and Experimental Evidence from Hate Speech on Twitter
Rafael Jiménez Durán
University of Chicago Working Paper, February 2022
Abstract:
Social media platforms ban users and remove posts to moderate their content. This "speech policing" remains controversial because little is known about its consequences and the costs and benefits for different individuals. I conduct two field experiments on Twitter to examine the effect of moderating hate speech on user behavior and welfare. Randomly reporting posts for violating the rules against hateful conduct increases the likelihood that Twitter removes them. Reporting does not affect the activity on the platform of the posts' authors or their likelihood of reposting hate, but it does increase the activity of those attacked by the posts. These results are consistent with a model in which content moderation is a quality decision for platforms that increases user engagement and hence advertising revenue. The second experiment shows that changing users' perceived content removal does not change their willingness to pause using social media, a measure of consumer surplus. My results imply that content moderation does not necessarily moderate users, but it marginally increases advertising revenue. It can be consistent with both profit- and welfare-maximization if out-of-platform externalities are small.
Investigating the Pink Tax: Evidence Against a Systematic Price Premium for Women in CPG
Sarah Moshary, Anna Tuchman & Natasha Bhatia
University of Chicago Working Paper, December 2021
Abstract:
This paper provides evidence on price disparities for personal care products targeted at different genders using a national dataset of grocery, convenience, drugstore, and mass merchandiser sales. We find that women’s products are more expensive in some categories (e.g., deodorant) but less expensive in others (e.g., razors). Further, in an apples-to-apples comparison of women’s and men’s products with similar ingredients, the women’s variant is less expensive in three out of five categories. Our results call into question the need for and efficacy of recently proposed and enacted legislation mandating price parity across gendered products.
Television and American consumerism
Woojin Kim
Journal of Public Economics, April 2022
Abstract:
How did the introduction of mass commercial television in the postwar era change American consumer behavior? Media scholars and U.S. historians claim that TV with its unprecedented advertising appeal drew Americans into a culture of upscaling and purchasing products for social status. I test this prevailing theory using newly digitized nationwide county-level retail sales data from the Census of Business series. I compare growth in retail sales between areas with and without local TV service over the unanticipated Federal Communications Commission (FCC) Freeze, which halted the licensing of new TV stations from 1948–52. I find three results that corroborate TV’s long-attributed role in American consumerism. First, during the Freeze, total retail sales in counties with TV access increased by 3–4% more on average than in counties without access. Second, the effect of TV was concentrated in the automobile sector, which alone accounted for a third of the total difference. Third, TV advertising led to higher growth in sales, but only for durable goods, which neatly aligns with both qualitative reports and theories of conspicuous consumption. Historians also propose that the suburban family life popularized in TV sitcoms became the mainstream representation of the American Dream in the 1950s. Consistent with these accounts, I find that the start of TV access coincides with greater activity in local highway construction and birthrates.
One-Hit Wonders versus Hit Makers: Sustaining Success in Creative Industries
Justin Berg
Administrative Science Quarterly, forthcoming
Abstract:
Creative industries produce many one-hit wonders who struggle to repeat their initial success and fewer hit makers who sustain success over time. To develop theory on the role of creativity in driving sustained market success, I propose a path dependence theory of creators’ careers that considers creators’ whole portfolios of products over time and how their early portfolios shape their later capacity to sustain success. The main idea is that a creator’s path to sustained success depends on the creativity in their portfolio at the time of their initial hit—relatively creative portfolios give creators more options for leveraging their past portfolios while adapting to market changes, increasing their odds of additional hits. I tested the proposed theory using an archival study of the U.S. music industry from 1959–2010, including data on over 3 million songs by 69,050 artists, and the results largely support the hypotheses. Artists who reached their initial hits with relatively creative (novel or varied) portfolios were more likely to generate additional hits, but a novel portfolio was less likely to yield an initial hit than was a typical portfolio. These findings suggest that new creators face a tradeoff between their likelihood of initial versus sustained success, such that building a relatively creative early portfolio is a risky bet that can make or break a creator’s career.
How the Basis for Status Perceptions Varies with Perceiver Status
David Tan & Christopher Rider
Organization Science, forthcoming
Abstract:
We posit a novel mechanism — socially endogenous calibration — whereby the tendency to align with others’ perceptions of organizational status varies systematically with the status of a perceiver’s own organization. We specifically theorize that members of higher-status organizations perceive larger and more correlated status differences among other organizations than members of lower-status organizations do. Using a simulation, we demonstrate how socially endogenous calibration yields these predictions even when quality is uniform across organizations. We further present empirical support for our arguments by analyzing data on individual-level prestige ratings of U.S. law firms. Integrating socially endogenous calibration with prevailing status perspectives based on quality uncertainty, we conclude by elaborating a novel research agenda on stability and instability in organizational status hierarchies.
Demand for Rarity: Evidence from a Collectible Good
Jonathan Hughes
Journal of Industrial Economics, March 2022, Pages 147-167
Abstract:
Markets for art, coins and other collectibles, culinary delicacies and eco-tourism suggest that consumers value the rarity of many goods. While empirical evidence supports higher prices for rare goods, isolating the value of rarity has proven difficult. I analyze prices for a collectible card game and show goods that are designated as rare trade at higher prices than functionally equivalent substitutes. Importantly, I use novel features of this market to account for scarcity, observed and unobserved product characteristics and separately identify rarity effects. These results have important implications for markets ranging from luxury goods to conservation of endangered species.
Experiential and Analytical Price Evaluations: How Experiential Product Description Affects Prices
Arnaud Monnier & Manoj Thomas
Journal of Consumer Research, forthcoming
Abstract:
Quantity can be described using perceptual units (e.g., bags, pieces) or standardized units (e.g., ounces, grams). Merely making perceptual units more salient in quantity description can increase perceived economic value. Even when the objective information and numerosity are kept constant, merely presenting the perceptual unit first (e.g., Lay’s Chips 14 snack bags, 14 oz. of chips in snack bags of 1 oz. each) increases willingness to pay compared to presenting the standardized unit first (e.g., Lay’s Chips 14 oz., 14 oz. of chips in snack bags of 1 oz. each). This occurs because perceptual units activate more experiential evaluations whereas standardized units activate more analytical evaluations. An archival study shows that retailers charge higher unit prices for products when perceptual units are salient in quantity description. Six preregistered experiments show that even when both units are available, merely increasing the attentional salience of perceptual units increases willingness to pay. The demonstration that the mere salience of experiential information can alter subjective value offers new insights into the psychology of market prices.