Robert H. Smith School of Business
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Item Marketing Implications of Sustainability(2024) Kim, Sanghwa; Kannan, P. K.; Trusov, Michael; Business and Management: Marketing; Digital Repository at the University of Maryland; University of Maryland (College Park, Md.)This dissertation considers the marketing implications of sustainability. In particular, I study the spillovers of an environmental challenge and a sustainable alternative to marketing practices. The first essay documents an increase in consumer spending with higher levels of air pollution. Moreover, the prominent effect in hedonic categories suggests mood regulation as an underlying mechanism, where the nature of its consumption helps reduce individuals’ negative affect. The second essay reveals consumers’ increased restaurant visits in the presence of e-scooters in urban areas. Moreover, the greater benefits in cities with lower urban accessibility suggest an instrumental role of such micromobility in reducing transportation costs. This mechanism particularly helps restaurants with lower popularity, which brings an advantage to businesses in the long tail, addressing their geolocational inequalities. The two essays provide implications for marketing researchers and practitioners to improve the local economy and develop a sustainable society for consumer welfare.Item When the Future Comes: Essays on Consumer Attitude toward Artificial Products(2023) Chen, Qihui; Kirmani, Amna; Wang, Yajin; Business and Management: Marketing; Digital Repository at the University of Maryland; University of Maryland (College Park, Md.)This dissertation consists of two essays that investigate how consumers react to artificial products. Specifically, each essay focuses on one type of artificial product: robots and lab-grown meat, respectively. The first essay investigates the interaction effect of personal control and the potential for negative judgment on consumers’ robot preferences. Across five studies, I find that when the consumption context enables the high potential for negative judgment, consumers with low (vs. high) personal control have stronger preferences for service robots because they are less confident in leaving a positive impression on others and thereby experience stronger social anxiety. However, when the consumption context enables the low potential for negative judgment, consumers feel confident in leaving a positive impression on others, so personal control affects neither social anxiety nor robot preference. The second essay studies why consumers resist lab-grown meat and proposes a novel theory to explain it: the life-creation perception theory. Across six studies, I demonstrate that consumers have more negative attitudes toward lab-grown meat than lab-grown dairy products because they associate lab-grown meat (vs. dairy products) with artificially creating life and thereby violating the laws of nature to a greater degree. In addition, theory-based interventions are shown to increase consumer acceptance of lab-grown meat by disassociating lab-grown meat from creating life. Across these two essays, I intend to provide insights into how consumers interact with artificial products in the marketplace and how marketers can increase consumers’ adoption of these innovations accordingly.Item ESSAYS ON THE IMPACT OF ELECTRONIC WORD-OF-MOUTH DYNAMICS ON CONSUMER BEHAVIOR(2022) Zhao, Xindi; Trusov, Michael; Business and Management: Marketing; Digital Repository at the University of Maryland; University of Maryland (College Park, Md.)Recognizing the importance of product reviews for product sales in online retail platforms, this dissertation studies the effect of electronic word-of-mouth (e-WOM) dynamics on consumer behavior, including information processing, review-reading behavior, product evaluation, purchase decision, and reviewing behavior. In the first essay, I focus on incentivized reviews, which are posted by reviewers who received economic incentives (e.g., free product) from the firm, and explore how their emergence in a reviewing system influences subsequent organic (i.e., nonincentivized) review contributions for the focal product. I find that the ratings of subsequent organic reviews decrease after the appearance of incentivized reviews and that the magnitude of this negative impact decreases over time and the ratings recover in the long run. This is because subsequent reviewers adjust their product evaluations downwards when faced with priorincentivized reviews. In the second essay, I study the effect of a prevalence phenomenon— repetition in e-WOM—on consumer behavior. I demonstrate that high repetition in e-WOM could have a negative effect on persuasion and that this negative effect could be eliminated by modifying consumers’ inferences about the cause of repetition. Furthermore, consumers’ information-seeking behaviors are also affected by the share and type of repetition. Both essays provide an understanding of the impact of e-WOM on consumers’ judgments and decisions and offer implications for firms and platforms on how to gather, manage, and display e-WOM effectively; they also provide interesting avenues for future research.Item PRICING AND EMPLOYMENT ISSUES IN THE PROVISION OF RIDE SERVICES(2022) Cao, Ziwei; Ball, Michael; Kannan, P.K.; Business and Management: Decision & Information Technologies; Digital Repository at the University of Maryland; University of Maryland (College Park, Md.)Recent years have witnessed the emergence and dramatic growth of platform businesses. This dissertation addresses two challenges of significance to ride service companies: 1) it investigates promotion effects on two-sided platforms; and 2) it models platform pricing and staffing strategies under a hybrid employment mode.In the first chapter, I broadly discuss the new challenges faced by the ride service platforms in recent years and provide perspectives on related research questions. In the second chapter, I study the network effects of different promotion methods in two-sided markets. Using data from a transportation-service platform, I specify a structural model that quantifies the respective promotional effects for price discounts and service upgrades. The results show that the primary effect of price discounts is to increase demand within the same service tier, whereas upgrades have stronger stickiness effects and spillover effects. Based on the estimates, I calculate the return on investment (ROI) and find that the ROI for upgrades is higher than that for discounts. Our counterfactual analyses show that as the platform matures, the importance of upgrades increases while the importance of price discounts decreases. These results provide important managerial implications for platforms on how to design optimal promotions to grow their business. In the third chapter, I model an on-demand platform that adopts a hybrid employment mode. This work is motivated by the recent public debate over the status of drivers for the major ride- hailing platforms as contract workers. My hybrid employment environment includes both contractors and full-time employees who receive a benefits package. In the hybrid model with driver control, drivers have the flexibility to decide how long to work and consequently whether to be an employee or a Contractor. Those who work over a certain number of hours will be classified as employees and receive a benefits package. The platform is a profit-maximizer and decides the optimal price based on the required benefit amount. As the benefit amount increases, the platform's profit decreases, which is consistent with strong gig company opposition to providing benefits. Moreover, I show that higher benefits make consumers and full-time drivers better off but decrease part-time drivers' welfare as well as overall social welfare. I consider a second model to better balance the platform's profitability and drivers' welfare. Under the hybrid model with platform control, the platform hires a limited number of full-time employees while guaranteeing that a minimum proportion of all work will be fulfilled by those employees. In this way, the profit loss due to the required benefits is capped, making this alternative policy a potentially viable solution from the platform’s perspective.Item Essays on Digital Content Provision and Consumption(2022) Wang, Chutian; Zhou, Bobby; Joshi, Yogesh V; Business and Management: Marketing; Digital Repository at the University of Maryland; University of Maryland (College Park, Md.)Consumption of digital content has become an inseparable part of consumers' lives today. As providers of digital content, media platforms continuously seek to pursue pricing and product design strategies that increase their profits. This dissertation studies media platforms' digital content provision and consumers' consumption decisions. In the first essay, we focus on the pricing of digital content and analyze the impact of consumers' endogenous content consumption on platforms' paywall strategies. Paywalls increase subscription revenues for platforms, but they also impact content consumption and thus advertising revenues. We build an analytical model that endogenizes consumers' content consumption decisions. We find that under moderate ad rates, a metered paywall under which a limited amount of content is provided for free is optimal when consumers display sufficient heterogeneity in their costs of consuming content. We also study how the amount of free content and the subscription price vary with changes in the advertising rate and consumer preference. In the second essay, we analyze the accuracy of news reported by the news media. When consumers are seeking the truth and accurate reporting is costly, determining the optimal level of accuracy in reporting is a strategic decision for a profit-maximizing media firm. We build an analytical model to study this media firm decision. When consumers and the media firm are both initially uncertain about the true state of the world, we show that the media firm always chooses full accuracy if investigation and reporting are of low cost. However, if achieving accuracy is sufficiently costly, the media firm provides news only when consumers' priors regarding the truth are not too extreme, so that they see enough value in news consumption. Interestingly, consumers' truth-seeking and the firm's profit maximization can lead to reporting inaccuracy and exaggeration of the more likely state a priori. We also discuss the implications of polarization in consumers’ prior beliefs and the media firm’s different objectives on the accuracy of news.Item HOW AND WHEN SIGNALING IMPACTS CONSUMPTION(2021) Kim, Nicole You Jeung; Ratner, Rebecca K.; Wang, Yajin; Business and Management: Marketing; Digital Repository at the University of Maryland; University of Maryland (College Park, Md.)This dissertation includes three essays that investigate the impact of signals that certain consumption choices can send to other consumers. In particular, each essay focuses on how consumers’ consumption-related decisions (e.g., choice of hedonic items, selecting low variety, and communicating that one has no preference) impact an observing audience’s perceptions of the consumer and the subsequent impacts on the observer. The first essay demonstrates that consumers strive to position themselves as attractive friends by making hedonic consumption decisions. While consumers shift to hedonic consumption, anchoring on their belief that others would heavily value fun when it comes to friendship, this essay demonstrates that consumers themselves actually value other aspects of friendship more, such as meaningfulness. As a result of this discrepancy in the belief of friendship, hedonic choice does not effectively help consumers cultivate friendship with another person. The second essay investigates the signals that selecting a low (vs. high) variety of items sends to observers. Choosing low variety signals to observers that the consumer has accumulated consumption experiences in the past, and thus has greater expertise, compared to choosing high variety. This signal of expertise endows the consumer with influence to impact observers to make consumption choices that mimic the consumer and be more willing to take the consumer’s recommendations. The third essay examines the impact of expressing no preference in a joint decision making context. While consumers expect to make the decision easier for the recipient, recipients of no preference communication (vs. explicit preference communication), experience greater decision difficulty. This unexpected negative impact occurs because recipients of no preference communication perceive that the communicator actually has preferences that they are hiding. Further, because recipients infer that these hidden preferences are dissimilar to one’s own preferences, they end up making a choice for the joint consumption that they personally less prefer.Item TWO ESSAYS ON USER-GENERATED CONTENTS IN MARKETING(2020) Huh, Jin-Hee; Godes, David; Business and Management: Marketing; Digital Repository at the University of Maryland; University of Maryland (College Park, Md.)This dissertation studies two topics regarding user-generated content (UGC) in social media context. Due to its rapid proliferation, UGC has received much attention among both practitioners and researchers. Although past studies have investigated diverse aspects of UGC and their influences on consumer decision process, few studies have examined (1) status bias in online peer-feedback on UGC with the presence of reputation system, and (2) the impact of video UGC, a relatively new type of UGC, on product purchase and usage decisions. In Essay 1, we investigate how a reputation system affects peer-evaluations in an online community. In contrast to previous research on reputation systems, which has predominantly shown that reputation systems can induce posting activity and quality contributions, we study how reputation markers (“badges,” for example) may change peer-evaluations. We rely on a unique and detailed data set and employ a difference- in-differences approach, combined with propensity score matching, that suggests that, all else equal, posters receive disproportionately-higher evaluations of their posts after they earn a reputation marker, irrespective of post quality. This suggests a “rich- get-richer” process induced by a reputation system that may have the unintended effect of favoring some participants at the expense of equally-skilled others. In Essay 2, we examine the impact of a relatively new type of user-generated content, video user-generated content (VUGC), on consumer’s purchase and product usage decision. Due to its highly visual and auditory characteristics, VUGC has been considered as an effective marketing tool. However, as VUGC can have the risk of revealing too much information about the entertainment products, firms need to limit the amount of original content in VUGC. Under these circumstances, game developers need to have an understanding on how VUGC can impact sales and usage. To examine the impact, we collected VUGC activities and game characteristics from diverse sources. Our results indicate that VUGCs can affect sales and game usage, and the impact can vary by VUGC and game product characteristics. Our findings suggest that game developers should consider both VUGC characteristics and their product characteristics jointly when developing and implementing policies on users’ VUGC uploading, sharing, and monetizing.Item The Impact of Omnichannel Operations on Firm Performance(2020) Ren, Xinyi; Evers, Philip T; Business and Management: Logistics, Business & Public Policy; Digital Repository at the University of Maryland; University of Maryland (College Park, Md.)This dissertation examines the impact of two different omnichannel strategies that firms can undertake to maintain and expand their competitive positions. These strategies range from the integration of information provided across different channels to the establishment of a new brick-and-mortar (B&M) retail format. Specifically, my research questions center on how firms can benefit from omnichannel operations and the potential costs that come with these strategies. The underlying mechanisms between customer demand, order fulfillment, and inventory management are studied using econometric analysis and data analytics based on a large proprietary dataset collected from the retail industry. The first essay empirically examines the value of pop-up stores with respect to their ability to drive customer demand and fulfill orders. A comparison is also made between pop-up retailing and traditional “permanent” B&M retailing. Building on a quasi-field experiment, I find that having pop-up stores leads to an increase in the overall demand both during and after operations, indicating a spillover effect on demand that goes beyond the pop-up store's limited operational window. From a fulfillment perspective, customers shift from the online channel to pop-up stores when they have urgency in acquiring the purchase. Finally, the results reveal that pop-up stores are not as effective as permanent stores in generating demand; however, the trade-off between revenue and cost still makes pop-up stores an attractive retail format, especially when exploring markets with modest potential. The second essay demonstrates the impact of sharing B&M store product availability on a firm’s website. Specific attention is given to the scenario where a product assortment discrepancy exists across channels, which aligns with the trend of B&M stores getting smaller in order to reduce operational costs. Using a difference-in-differences approach, I find that this information integration strategy leads to an increase in overall sales. At a channel level, customers shift from the B&M channel to the online channel for a wider product selection, except when purchasing products that are associated with high uncertainty. I further evaluate whether the above effects are sensitive to customer-related characteristics and find that both customer distance to store and customer basket size affect the way one responds to the information about in-store product availability and the product assortment gap between channels.Item STRATEGIC MERCHANT COMPETITION AND LARGE ASSORTMENT MANAGEMENT IN ONLINE MARKETPLACES(2020) Kim, Min; Zhang, Jie; Business and Management: Marketing; Digital Repository at the University of Maryland; University of Maryland (College Park, Md.)In this dissertation research, I study strategic merchant competitions on a retail deal platform and propose a new modeling approach for discovering consumer preference structures in online shopping environments with large and frequently changing assortments. In the first essay, I examine the impact of alternative platform policies and changes in market primitives on payoffs of players on a retail deal platform where merchants make frequent strategic decisions based on competitive considerations in a two-sided market. To this end, I construct a dynamic game model and conduct counterfactual simulations. My analyses reveal novel insights regarding the interplay between platform policies and merchants’ profits and relationships among competing merchants, and identify several mutually beneficial growth opportunities for all parties involved via policy changes. They also provide a comprehensive assessment of the net contribution of each merchant’s action to the platform eco-system, which sheds new light on how to identify and foster “star brands” in such marketplaces. In the second essay, I develop a scalable stock-keeping-unit-level modeling framework of discovering consumers’ preference structures in large and frequently changing assortments at the store/marketplace level. My proposed model identifies the underlying “topics of interest” that drive online browsing and purchase activities concerning the entire store assortment. It overcomes several limitations of standard Latent Dirichlet Allocation models for handling large assortments and enables demand forecast for products not in the existing assortments. I apply the proposed framework to investigate “topics” driving browsing and purchase activities in an online marketplace of fashion products, which reveals distinct topics driving these two types of shopping activities and their time-varying patterns of relevance. Finally, I propose a personalized product recommendation system that is based on individuals’ preference structures inferred from the model and powered by the Bayesian optimization algorithm. Hold-out comparisons show that our approach substantially outperforms benchmark recommendation algorithms commonly used in practice (such as user-, item-, and content-based collaborative filters), and it is particularly powerful in prescribing recommendations for products that do not exist in the previous assortment. This dissertation research offers a range of policy recommendations and valuable managerial insights to marketing researchers and E-commerce practitioners.Item DERIVING HAPPINESS FROM CONSUMPTION: TOWARDS AN UNDERSTANDING OF ENJOYMENT IN CONSUMER CONSUMPTION(2019) Wu, Yuechen; Ratner, Rebecca K; Business and Management: Marketing; Digital Repository at the University of Maryland; University of Maryland (College Park, Md.)This dissertation includes three essays that investigate factors that influence how much enjoyment consumers derive from their various daily consumption. The first essay examines whether and when shared experiences are more or less enjoyable than solo experiences. Whereas prior research has primarily focused on the social benefits of having an activity partner in leisure activities, we propose that sharing experiences requires coordination with others, which can take the consumer’s attention away from the consumption activity, potentially reducing their enjoyment of the activity compared to those who engage in the experience solo. We demonstrate that lack of clarity about a partner’s level of interests in the activity can make it difficult for consumers to coordinate and focus on a shared activity, and ultimately enjoy the experience, relative to solo experiences or shared experiences for which clarity is high. The second essay speaks to consumers’ inhibition that prevents them from deriving happiness from rewarding solitary leisure experiences. Prior research shows that consumers are inhibited from engaging in public leisure activities alone because of negative evaluations on social connectedness they anticipate from others. This essay examines how people actually evaluate consumers who engage in these activities solo versus accompanied. We demonstrate that though observers indeed perceive solo (vs. accompanied) consumers to be less socially connected, observers also make more positive inferences for solo consumers on the trait of openness, and overall view solo consumers as favorably as accompanied consumers. The third essay examines the effect of ownership status (i.e., whether a consumer owns the product or not) on consumers’ adaptation to a product. We demonstrate that consuming a product for which consumers do not have ownership (vs. have ownership) prolongs happiness derived from the product. We propose that when consumers do not have ownership of a product, they experience an elevated arousal, which could help to slow down the otherwise natural process of hedonic adaptation.