Speakers

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Anocha Aribarg

University of Michigan

Confirmation Bias in Quality Learning from Consumer Reviews

The extant marketing literature has demonstrated the impact of consumer reviews on firm performance outcomes at the aggregate levels and focused primarily on the role of star ratings, not review content. Only a few papers have investigated how consumers make choice decisions based on review content (e.g., Liu, Lee and Srinivasan 2019; Wu et al. 2015). In this research, we aim to examine how consumers select reviews to read, how they interpret the review content, and how it may affect their choices. Given unobserved orders of reviews read in clickstream browsing and purchase data, we conducted an incentive-aligned review-based choice experiment to test i) whether confirmation bias as a result of endowed brand preference influences consumers to select more positive reviews of a product offered by a preferred vs. less preferred brand to read and ii) whether they interpret information in favor of their preferred brand’s product. We confirm these hypotheses based on model-free evidence. We further build a choice model with quality learning to examine how researchers may capture these biases in observational data by relaxing standard learning model assumptions. Based on this model, we conceptualize that confirmation bias in favor of a brand may affect prior beliefs about the quality of its product, review selection, review interpretation, and the extent to which consumers update quality beliefs based on review information. The model also allows us to perform counterfactual analysis of consumer search pattern and choice under different review display systems.

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June Cotte

Western University, Ontario

Helping Those that Hide: The Effect of Anticipated Stigmatization on Concealment and Debt Reduction

 

 Debt accumulation has been linked to materialism, impulsivity, short sightedness, self-control, and lifestyle preferences. However, applying stigma theory allows novel insights into debt accumulation for middle class individuals who access a variety of credit-related products. We define anticipated stigmatization of debt as the negative judgment and discrimination an individual expects to experience because of their consumer indebtedness. Results from five studies demonstrate that although financial stress motivates behaviors designed to reduce debt, debtors who anticipate stigmatization perform a variety of concealment behaviors (secrecy, social spending, and help avoidance) that hinder debt reduction and have negative effects on well-being. To understand how to help these individuals, we collaborated with a financial education company, designing a field experiment to examine the efficacy of a behavior change course. Individuals who anticipated stigmatization and formed new social connections in the community condition reduced their consumer debt. While the emotional effect of community-based support has been examined in other stigma contexts, our field study is the first to investigate the effect on well-being in a debt context, and the first to link social benefits to actual behavior change in terms of debt reduction behaviors and debt repayment.

Dr. Liat Hadar

Coller School of Management

Tel Aviv University

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Sachin Gupta 

Cornell University

Encouraging Customers to Engage in Climate Change Amelioration Behaviors: Does It Help or Hurt a Firm’s Relationship with its Customers?

With Jake An (University of Technology Sydney), Jihwan Moon (University of New South Wales, Sydney) and John Roberts (University of New South Wales, Sydney).

Ayelet Isreali

Marvin Bower Associate Professor | Harvard Business School

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Tsfira Grebelsky-Lichtman

The Hebrew University

Gender Effect on Political Leaders’ Nonverbal
Communicative Structure during the COVID-19 Crisis

During the COVID-19 pandemic, there has been intense interest in political leaders’ nonverbal communicative structures (NCS) during televised appearances. This study analyzes the effect of gender on leaders’ NCS and presents theoretical and analytical frameworks of gendered NCS. We analyzed 20 televised appearances by 10 heads of state (five males and five females) from democratic Western countries during the COVID-19 pandemic. The findings revealed that gender had a significant effect on leaders’ NCS, indicating that leaders presented NCS that corresponded to their gender. Male leaders’ masculine NCS included competition, warning, threatening, and scaring behavior, broad proxemics, tension leakage, and illustrative gestures, while female leaders presented feminine NCS of cooperativeness, emotional communication, empathy, optimism, eye contact, and flexible expressions. Furthermore, the effect of gender on leaders’ NCS had an interaction effect with the situation of the pandemic, indicating that countries with a female leader had fewer diseased and severe cases and more calmness and healing NCS. The conclusions present theoretical and analytical frameworks that explain the central effect of gender on contemporary leaders’ NCS. This study develops advanced distinctive profiles for maleversus female leaders’ NCS of emotions, cognition, and behavior during a crisis.

Ayelet Isreali

Marvin Bower Associate Professor | Harvard Business School

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Aradhna Krishna

University of Michigan

Covering Vice with Virtue: Categorization and the Perceived Environmental Friendliness of Product Packaging

Around the world, more packaging waste is produced every year.  In 2018, more than 80 million tons of packaging waste were produced in the United States alone. In order to reduce this number, consumers must be able to make accurate judgments about the environmental friendliness of product packaging. We show that perceptions of environmental friendliness (PEF) are systematically biased: Consumers implicitly categorize paper packaging as a virtue and plastic packaging as a vice, regardless of objective measures of environmental friendliness. This happens to the extent that adding extra paper packaging to plastic packaging increases the perceived overall environmental friendliness of the packaging. PEF continues to increase as more paper is added to plastic suggesting that paper proportion cues PEF. Six studies demonstrate the vice/virtue proportional effect and an intervention study shows how the effect can be reduced.

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Jūra Liaukonytė

Cornell University

Cancel Culture and Separating Art from the Artist: Evidence from Spotify Streams

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Ofer Mintz

Coller School of Management

Tel Aviv University

Managerial and Academic Assessments of Marketing Performance

Establishing generalized preferences for marketing performance metrics is critical for practice. However, little to no empirical work has investigated the type of performance metric that matters most to which stakeholder (i.e., marketing executives, non-marketing executives, and investors) and under which conditions (i.e., manager, firm, and marketing characteristics). This research proposes an underlying framework on drivers of managerial preferences for five marketing performance metric types, and how such preferences are likely to vary based on the type of stakeholder and the variance of the metric. We test our framework using a choice-based conjoint experiment involving 431 participants with near-equal representation of marketing executives, non-marketing executives, and investors. Our findings indicate that bottom-line metrics have the greatest impact on marketing performance assessments and top-line metrics have the least impact, while avoiding “certain” bottom-line losses is the greatest driver of performance assessments. An additional survey involving 130 marketing academics reveals stark differences (and some similarities) between academics’ and practitioners’ preferences for marketing metrics. The proposed framework and results provides a road-map for marketing performance metric selections. 

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Jiwoong Shin

Yale University

The Impact of Gig Economy on Product Quality through the Labor Market: Evidence from Ride-sharing and Restaurant Quality

This paper seeks to demonstrate the impact of the gig economy on product quality in seemingly unrelated local industries through the labor market. Our empirical context is the quality of service for restaurants in the city of Austin, and we examine how they were impacted by the exogenous exit and re-entry of rideshare platforms, Uber and Lyft, due to regulatory changes. We leverage these exogenous shocks and combine them with sentiment-analyzed data from Yelp reviews that capture how customers assess the quality of service at each restaurant. We show that, compared to control cities, customers in Austin become more negative about service quality when Uber and Lyft are present in the city.  Additionally, we use rich data on employee turnover and wages to demonstrate that service staff turnover increases in Austin when Uber and Lyft are present compared to the control cities. We also conduct several additional studies and robustness checks that are all congruent with our hypothesis that Uber and Lyft lower the quality of service in Austin restaurants by raising their staff turnover. Together, these results suggest significant ramifications of the gig economy on the broader industries through the labor market.

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Alina Sorescu

Texas A&M

Determinants and Financial Implications of Business Model Innovation: Evidence from Initial Public Offerings

Priya Rangaswamy and Alina Sorescu

The innovation literature has primarily focused on product (goods and services) innovations. Empirical evidence on a prevalent form of innovation—business model innovation—remains scarce. The authors propose a model of the determinants of business model innovation and contrast them with known determinants of product innovation from extant literature. They also examine the financial consequences of business model innovation and test their predictions in the context of Initial Public Offerings (IPOs). Empirically, the authors propose a method to quantify firms’ focus on product or business model innovation through text analysis of the business descriptions from firms’ IPO prospectuses. The authors find that compared to firms that focus on product innovation, firms that pursue business model innovation are larger, younger, have less firm-level technical knowledge, and operate in higher-growth industries. The results also suggest that while investors value all types of innovation, they value business model innovation more than product innovation.

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Stephen Spiller

UCLA Anderson School

of Management

Budgets Favor Categories With Higher Average Values

 

Consumers frequently use budgets to manage their spending. Budgets are consequential, as money in budgets is treated as though it is not fungible, so budget allocations matter. What drives consumer budget allocation decisions? A value-maximizing consumer would set their budget such that marginal value is equated across budgets. However, prior research suggests consumers may also be sensitive to other value metrics when making decisions, such as average value. The authors propose consumers are sensitive to average category value, not just marginal value, when making budget allocation decisions. As a result, budget allocations favor high-value categories even at the expense of high-value expenditures. This tendency is more pronounced when budgeting than when spending unbudgeted funds. Because budgets causally impact spending, the act of budgeting therefore shifts spending toward categories with higher average value. The authors present evidence of these patterns in three preregistered studies.

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Ana Valenzuela

Baruch College, CUNY and

ESADE, Barcelona

Following the rule of AI: A justice perspective

Baruch College, CUNY and ESADE, Barcelona

Today, companies are increasingly adopting Artificial Intelligent (AI) agents to provide consumers with instructions and rules to be followed, however, how consumers respond to such instructions remains unexplored. In this paper, we investigate how the use of AI agents as ‘instruction providers’ affects consumers’ perceptions of justice and consequent behavior (compliance and satisfaction).  When individuals are told to follow instructions, judgments about the fairness of the rule (i.e., procedural justice) and about how respectfully it was communicated (i.e., interactional justice) affect how people respond to it (Collie et al., 2002; Acikgoz et al., 2020). We posit that the type of assistant (AI vs human) providing the instructions influences consumers’ perceptions of procedural and interactional justice, which, in turn, affect individuals’ compliance with the rule and subsequent satisfaction with the service experience.  Across ten studies (N= 3422), we show that consumers comply less and are less satisfied when instructions are provided by an AI vs. a human assistant. The effect is driven by a decrease in perceptions of procedural and interactional justice. Moreover, we show that the effect is reversed when the rule violates 

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