Impressions
Does Product Placement Change Television Viewers’ Social Behavior?
Elizabeth Levy Paluck et al.
PLoS ONE, September 2015
Abstract:
To what extent are television viewers affected by the behaviors and decisions they see modeled by characters in television soap operas? Collaborating with scriptwriters for three prime-time nationally-broadcast Spanish-language telenovelas, we embedded scenes about topics such as drunk driving or saving money at randomly assigned periods during the broadcast season. Outcomes were measured unobtrusively by aggregate city- and nation-wide time series, such as the number of Hispanic motorists arrested daily for drunk driving or the number of accounts opened in banks located in Hispanic neighborhoods. Results indicate that while two of the treatment effects are statistically significant, none are substantively large or long-lasting. Actions that could be taken during the immediate viewing session, like online searching, and those that were relatively more integrated into the telenovela storyline, specifically reducing cholesterol, were briefly affected, but not behaviors requiring sustained efforts, like opening a bank account or registering to vote.
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Fighting as a profit maximizing strategy in the National Hockey League: More evidence
Duane Rockerbie
Applied Economics, forthcoming
Abstract:
This article estimates the effect of fighting in hockey games on attendance in the National Hockey League (NHL) over the 1997–1998 through 2009–2010 seasons. After estimating a system of equations developed from a model of a profit-maximizing club owner, it was found that fighting had a small negative effect on attendance implying that encouraging fighting on the ice is not a profit-maximizing strategy. The results are quite robust when incorporating capacity constraints on attendance and exogenous ticket pricing. Other factors that determine club performance and market size were found to significantly affect attendance. The empirical results also suggest that NHL club owners are maximizing profit.
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Niche Overlap and Discrediting Acts: An Empirical Analysis of Informing in Hollywood
Giacomo Negro & Sasha Goodman
Sociological Science, June 2015
Abstract:
This article examines informing on others as a discrediting act between individual agents in a labor market. We conduct an empirical analysis of artists called to testify during the 1950s Congressional hearings into Communism in Hollywood, and multi-level regression models reveal that the odds of an artist informing on another increase when their career histories are more similar. The similarity reflects levels of niche overlap in the labor market. The finding that similarity contributes to discredit in the context of resource competition is compatible with a social comparison process, whereby uncertainty about performance leads more similar people to attend to and exclude one another to a greater extent.
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Andrea Ordanini & Joseph Nunes
International Journal of Research in Marketing, forthcoming
Abstract:
The pace of change in recorded music technology has accelerated faster than ever during the past two decades with the shift from analog to digital. Digital recordings provide consumers the unimpeded ability to access, sample, learn about, acquire, store, and share vast amounts of music as never before. Supporters of winner-take-all theory believe lower search and transaction costs brought about by digitization have led to greater convergence with fewer extraordinarily popular songs (blockbusters) and a smaller number of artists who perform them (superstars). Supporters of long-tail theory believe the same factors have led to less convergence and a greater number of songs and artists becoming blockbusters and superstars. This work pits these opposing predictions against each other empirically. More specifically, we examine how the number of songs and artists appearing annually on Billboard's Hot 100 singles chart has changed between 1974 and 2013 in relation to three major turning points in technology associated with digitization. These turning points mark consumers' shift: (1) from analog records and cassettes to digital audio with the advent of CDs, (2) from CDs to compressed digital audio MP3s, and (3) from P2P networks and illegal file sharing to legitimate online distributors of digital downloads. In general, we observe a growing winner-take-all effect for songs until the advent of MP3s in 1998, when this trend abated. This result appears largely due to greater convergence in the Top 10. The trend reverses itself as the number of songs making the chart increases steadily after the launch of legitimate online music sellers such as iTunes. The exact opposite pattern is observed for artists. Initially, an increasing number of artists made the chart, and this trend continued unabated until 2003. After the emergence of legitimate online resellers, the trend reversed as fewer and fewer artists made it onto the chart. The overall pattern is summarized as a transition from fewer blockbusters by more superstars to more blockbusters by fewer superstars.
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Patrick Choi, Peter Boatwright & Michael Smith
Carnegie Mellon University Working Paper, June 2015
Abstract:
Movies are distributed through multiple, carefully segmented, channels. This paper investigates how consumption in a movie’s theatrical channel affects demand in the subsequent DVD retail channel. We exploit exogenous variation in events that affect theatrical attendance in a geographic market to estimate the causal impact of theater attendance on home entertainment demand. Specifically, we use the occurrence of major snowstorms surrounding a movie’s theatrical opening weekend as an exogenous shock to theatrical demand in a local market. Using this instrumental variable (IV) approach, we find evidence that theatrical attendance causally impacts home entertainment demand: lower theatrical attendance in a geographical market that experiences an opening weekend snowstorm leads to lower DVD/Blu-ray sales in the movie’s subsequent home entertainment release window in that geographical market. Specifically, we estimate a 10 percent rise (drop) in theatrical attendance causes an approximate 8 percent increase (decrease) in the volume of DVDs/Blu-ray discs sold in the first eight weeks of the DVD release window. This result provides important managerial guidance in an industry undergoing significant changes in the how movies are marketed across theatrical and home entertainment channels.
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Brian Wansink & Aner Tal
Public Understanding of Science, October 2014
Abstract:
The appearance of being scientific can increase persuasiveness. Even trivial cues can create such an appearance of a scientific basis. In our studies, including simple elements, such as graphs (Studies 1–2) or a chemical formula (Study 3), increased belief in a medication’s efficacy. This appears to be due to the association of such elements with science, rather than increased comprehensibility, use of visuals, or recall. Belief in science moderates the persuasive effect of graphs, such that people who have a greater belief in science are more affected by the presence of graphs (Study 2). Overall, the studies contribute to past research by demonstrating that even trivial elements can increase public persuasion despite their not truly indicating scientific expertise or objective support.
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The Ongoing Evolution of US Retail: A Format Tug-of-War
Ali Hortaçsu & Chad Syverson
NBER Working Paper, August 2015
Abstract:
We review major changes in the economics of the US retail sector over the past 15-20 years and discuss what these portend for the future evolution of retail. The sector has been shrinking in relative size over the long term, though this stopped around the onset of the Great Recession. Retail has experienced stronger-than-average productivity growth that has not been accompanied by commensurate wage growth. The main forces shaping the retail landscape in recent decades have been the expansions of two formats: e-commerce and warehouse clubs. While both formats have been the subject of study and discussion, we find evidence that warehouse clubs have had to this point a greater effect on retail than e-commerce has. This impact has been manifested in changes in the retail sector’s scale, concentration, dynamism, and urbanization. Thus while e-commerce will continue to expand and physical retail will further evolve in the coming years, the physical format is unlikely to meet its demise soon.
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On the Mental Accounting of Restricted-Use Funds: How Gift Cards Change What People Purchase
Nicholas Reinholtz, Daniel Bartels & Jeffrey Parker
Journal of Consumer Research, forthcoming
Abstract:
This paper emphasizes the role of categorization in mental accounting and proposes that once a mental account is established, purchases that are highly congruent with the purpose of the mental account (i.e., typical category members) will be more preferred in selection decisions compared to purchases that are less congruent (i.e., atypical category members). This hypothesis is tested in the context of gift cards. Six studies find that people shopping with a retailer-specific gift card — and so, the authors argue, possessing a retailer-specific mental account — express an increased preference for products more typical of the retailer compared to those shopping with more fungible currency. This pattern is found to occur for both well-known retailers, where people already possess product-typicality knowledge, and fictional retailers, where product-typicality cues are provided. An alternative account based on semantic priming is not supported by these data. These results both broaden the contemporary understanding of how mental accounting influences preferences and provide retailers deeper insight into their customers’ decision processes.
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The Impact of Dynamic Presentation Format on Consumer Preferences for Hedonic Products and Services
Anne Roggeveen et al.
Journal of Marketing, forthcoming
Abstract:
Manufacturers and online retailers are readily availing themselves of new technologies to present their merchandise using a variety of formats, including static (still image) and dynamic (video) portrayal. Building on vividness theory, the authors propose and demonstrate that presenting products and services using a dynamic visual format enhances consumer preference for hedonic options and willingness to pay for those options. The dynamic presentation format increases involvement with the product/service experience, in a manner presumably similar to that of actual product experience. The result is an increased preference for and valuation of hedonic options. This holds true for experiential and search products, in single and joint evaluations, and carries over to subsequent choices. Across all studies, the results demonstrate that a dynamic (relative to static) presentation format enhances choice of the hedonically superior (versus utilitarian superior) option by over 79%.
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Yuwei Jiang et al.
Journal of Consumer Research, forthcoming
Abstract:
Five experiments document that the mere circularity and angularity of a brand logo is powerful enough to affect perceptions of the attributes of a product or company. It is theorized and shown that circular vs. angular logo shapes activate softness and hardness associations, respectively, and these concepts subsequently influence product/company attribute judgments through a resource-demanding imagery generation process that utilizes the visuospatial sketchpad component of working memory. There are no logo shape effects on attribute judgments a) when the visuospatial sketchpad component of working memory is constrained by irrelevant visual imagery, b) when people have a lower disposition to generate imagery when processing product information, and c) when the headline of the ad highlights a product attribute that differs from the inference drawn from the logo shape. Further, there are shape effects even when the shape is incidentally exposed beforehand using a priming technique rather than being a part of the logo itself, demonstrating the generalizability of our findings. When taken together, the results have implications for working memory, consumer imagery, and visual marketing.
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Amount off versus percentage off — when does it matter?
Eva González et al.
Journal of Business Research, forthcoming
Abstract:
This research explores the impact of discount framing on consumer perceptions of value and purchase intentions. An amount off discount frame results in higher perceptions of value and purchase intentions for higher-priced products (priced over $100). Three studies consistently support this prediction. Experiment 1 examines the interactive effects of amount off versus percentage off deals as a function of higher versus lower-priced products. For a higher-priced product, consumers prefer the offer more in terms of both value and purchase intentions when the discount is presented as amount off rather than the percentage off. For a lower-priced product (less than $100), the results, though not statistically significant, indicate a reverse pattern. Experiment 2 demonstrates that the result (amount off is better than percentage off) generalizes across higher price levels. Finally, Experiment 3 affirms that the result (amount off is better than percentage off for higher-priced products) generalizes across discount levels.
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Consumer Reactions to Attractive Service Providers: Approach or Avoid?
Lisa Wan & Robert Wyer
Journal of Consumer Research, forthcoming
Abstract:
Attractive service providers are often assumed to elicit favorable consumer reactions and to increase purchase intentions. However, this may not always be true. A pilot study and five field and laboratory experiments show that when a self-presentation concern is made salient, consumers react less positively to highly attractive providers than to less attractive ones. This concern can be influenced by chronic social anxiety or can be aroused by unrelated experiences that consumers have before being exposed to the service interactions. In addition, it can be activated by the type of product being sold, that is, a product that is likely to cause embarrassment. Thus, the attractiveness of a service provider can have either positive or negative effects on consumers’ reactions to a consumption experience and their consequent purchase intentions, depending on the type of product under consideration. These effects occur when the service provider is both of the opposite sex and the same sex. However, self-presentation concerns when an opposite-sex provider is attractive are driven by sexual motives whereas these self-presentation concerns when a same-sex target is attractive are stimulated by social comparison processes.
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Fabio Caldieraro, Ling-Jing Kao & Marcus Cunha
Journal of Marketing, forthcoming
Abstract:
Companies often extend product lines with the goal of increasing demand for their products and responding to competitive threats. Although line extensions may lead to cannibalization and reduction of overall profits, the bulk of theoretical and empirical research suggests that product line extensions result in a net gain of overall demand and market share. To mitigate cannibalization, the extant literature prescribes the addition of premium versions of products: an upward line extension, with the intention of achieving not only gains in demand and market share, but also in overall profit. In this research, we employ analytical and empirical methods to make the case that upward line extensions aimed at matching a competing product's attribute may lead consumers to reassess their perceptions about the brand and attributes of the products in the market in a way that erodes the advantages of the firm extending its product line. Ultimately, this can result in a loss of demand, market share, and profit for the extending firm.
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May Lwin et al.
Journal of Behavioral Decision Making, forthcoming
Abstract:
The current research uses eye-tracking technology in a consumer context to explore the interactive effects of olfactory and visual cues on consumers' eye gaze patterns. We manipulate the semantic correspondence between pictorial objects depicted in print advertisements and odors smelled (or not) while looking at the ads. The results indicate that smelling a scent that shares learned semantic associations with an object in the advertisement diverts consumers' eye gazes to the semantically related object in the ad, with positive downstream effects on advertising recall and purchase intent. This is the first study we are aware of demonstrating multisensory integration of odors and pictures on consumer eye gaze patterns with clear implications for consumer choice.
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Corporate social responsibility and media coverage
Steven Cahan et al.
Journal of Banking & Finance, October 2015, Pages 409–422
Abstract:
In this study, we examine whether firms that act more socially responsible receive more favorable media coverage, and we consider whether firms use CSR to actively manage their media image. We focus on all news stories about a firm, not just those that report on specific CSR initiatives, and find that more socially responsible firms receive more favorable news reportage overall, i.e., they have a more positive media image. These findings are robust after controlling for potential endogeneity. Further, consistent with firms actively managing their media image, we find a stronger relation between CSR and media favorability when incentives to improve a firm’s media image are high, e.g., among firms in sin industries, during periods of low investor sentiment, and prior to seasoned equity offerings. Finally, we find that for firms that demonstrate superior social responsibility and receive more favorable news reporting, there is a significant interaction between social responsibility and media favorability that increases (decreases) a firm’s equity valuation (cost of capital). Our results are consistent with the media slanting their reporting in favor of good performing CSR firms. Overall, we contribute to the literature by showing that firms can influence their media coverage through a relatively subtle channel, CSR performance.
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Managerial Response to Online Reviews: Is It Always Good?
Yang Wang & Alexander Chaudhry
Rice University Working Paper, July 2015
Abstract:
Managerial response to online reviews has become a common practice on many review platforms, including TripAdvisor. While the practice is broadly accepted, little research has been conducted to understand the implications of management response for the firm. We study one outcome of management response, its influence on a firm’s subsequent ratings. While recent research and conventional wisdom suggest that management response should positively impact subsequent ratings, we document a more nuanced result. We find that management response to negative reviews do in fact lead to higher subsequent ratings. However, management response to positive reviews actually leads to lower subsequent ratings. We find three moderating effects – branding, vertical positioning, and reviewer’s psychological construal level – that are consistent with a psychological reactance tale for the negative effect of responding to positive reviews. Methodologically, we break from the typical difference-in-differences (DD) framework used to test such platform-specific effects. We use the timing of responses and reviews to identify whether a manager’s response is actually observable to a subsequent reviewer. Using observability of response as the treatment, we can leverage the full dataset of managerial responses, rather than the first instance as in the DD approach, in order to identify the different impact between responding to positive and negative reviews.