Morrison Center for Marketing and Data Analytics

Thoughts of the future are commonplace in the daily lives of consumers. Yet, considering the future, with its various uncertainties, can be an intimidating and anxiety-provoking exercise. Yet, no work to date has investigated the ways in which various methods of prospection impact the present-day and anticipated emotions that consumers experience. In this project, we set out to compare different methods of prospection against one another in an attempt to determine which, if any, may benefit consumers. Initial results indicated that not all forms of prospection are created equal: participants who engaged in planning and set intentions indicated that they felt more positive in the current moment than those in the control condition, whereas simulation and prediction afforded no such benefits. We are planning to conduct an additional set of 3 studies to further investigate the emotional outcomes that vary with each prospection type, and to test potential mediators of the relationships we uncover.

Although preventative behaviors are critical for health and well-being, they are also challenging to motivate, particularly among those without an established routine who may be least likely to engage in prevention behaviors. As a result, motivating preventative behaviors, or actions taken today to prevent future adversity, has presented a longstanding behavioral challenge as well as an opportunity for improving welfare. In this research, we aim to demonstrate a key source of heterogeneity in interventions that aim to motivate such preventative behaviors. We will specifically investigate whether calling to mind one’s past adversity in the health or financial wellness domains can encourage preventative behavior, and predict that this messaging intervention will be uniquely effective for those who have been exposed to related adversity. These findings contribute practical insights for social psychological interventions to account for individual-level heterogeneity and increase welfare among those who are most vulnerable to adversity.

Moral rationalization is the process of convincing oneself that an action does not actually violate one’s moral standards (Tsang, 2002). As a result, rationalization fosters an environment conducive to immoral action, and thus is harmful for both individuals and society. The primary purpose of this research is to study the process of rationalization, investigate methods for combating this process, and develop an engaging and interactive intervention that employs these rationalization reduction methods. By interrupting the process that liberates individuals to break with their moral standards, this research serves to reduce immoral behavior and improve the wellbeing of individuals and society.

From deadly viruses that infect our bodies to Siri and Alexa listening to everything we say, concerns over unwanted or unnatural intrusions are common in today’s society. In all of these contexts, a label using a variation of the word “invasive” might be applied (i.e., an invasive disease, an invasion of privacy). Although the normative implications in these specific contexts are fairly clear, where less invasive diseases or technologies are better than the alternative, there are other settings in which a label of “invasive” might come along with different assumptions or values. For example, a patient choosing between treatment options for a cancerous tumor might infer higher rates of success for an invasive surgery vs. a noninvasive approach. In the present research, we seek to explore the assumptions, values, and consequences of practices varying in invasiveness across two key settings with important but distinct implications for consumer choice: consumer privacy and medicine. Specifically, we will investigate how consumers, patients, and doctors define and perceive invasiveness and how potential differences in their interpretations influence judgments and choices.

In just the past four decades, the wealth gap between the richest and poorest families in the United States has grown at an astounding rate: in 1983, families in the top income tier had 28 times the wealth of families in the lowest tier, but by 2016, this grew to 75 times (Pew Research Center, 2020). The consequences of this rapidly rising inequality go beyond the harmful financial consequences for those living in poverty, contributing to imbalances in political power, happiness, and wellbeing (Buttrick & Oishi, 2017; Hing et al., 2019). One of the main tools that a government has to address inequality is redistributive policy, including the use of taxes on the wealthy to provide benefits and services to those in need. Existing evidence suggests that support for redistributive policies is associated with beliefs about whether poverty is driven by dispositional or situational factors. In this research, we investigate (1) whether existing attributions differ for poverty and prosperity, (2) how the framing of redistributive policies conveys narratives around attributions for poverty and prosperity, and (3) how these narratives affect individually held beliefs about the determinants for poverty and prosperity.

Any time you log into Netflix and see “Popular on Netflix Now” or receive a household energy bill comparing your consumption to your neighbors’, someone is trying to influence your decisions by comparing your behavior to a social norm. In past research (Bogard, Delmas, Goldstein, and Vezich, 2020), we demonstrated that this sort of normative feedback is not a monolith, as scholars have typically treated it, but instead contains three separate dimensions: The target (i.e., the specific reference group used as the benchmark), the Valence (i.e., whether one has outperformed or under-performed the Target), and the Distance (i.e., how far from the Target one’s performance is). Whenever someone receives normative feedback, we showed, they are actually receiving information along each of these three dimensions. Through several field and laboratory studies, we documented the independent effect of each dimension on people’s behavioral response to normative feedback.

These findings invite a natural question: How do these three dimensions interact? That is, how does the effect of one dimension depend on the specific values of the others? Is negatively valenced feedback always bad, or might slightly negative feedback actually improve performance more than moderately positive feedback? Does it depend on whether performance is being compared against a low-, middle-, or top-performer? The goal of the present investigation is to answer these sorts of questions.

We analyze the impact of a temporary shock to food supply on households' dietary choices. We use hurricane-induced closures of grocery stores, which are typically short term. Results show that store closures influence household purchasing patterns even after the grocery store has reopened. We find a decrease in the nutritional value of household purchases for the six-month period after the store has reopened, despite no change in total expenditures. This finding supports the hypothesis that supply factors play a substantial role in shaping household diets.

How do consumers assess whether to purchase products at a given price? One approach is to consider whether prices equitably reflect input costs. A company could present labor costs in terms of either time or money e.g., “1/2 hour” vs. “$7.50” of labor (for a fixed rate of $15/hour). Prior research shows that time is often substituted for other attributes (e.g., content, quality) and that highlighting time or human effort might increase valuations. Given this, we might expect companies to be better-off when communicating costs framed in terms of time, instead of money. However, results from four pilot experiments seem to suggest the opposite. In these studies, consumers indicated being more likely to purchase a product when costs were framed in terms of money rather than time. Furthermore, participants perceived greater time investment for products framed by financial transparent costs, rather than temporal transparent costs and this time investment was strongly associated with purchase likelihood. Our initial findings seemingly challenge the conventional wisdom from the literature; however, they are not mutually incompatible. Instead, our work may shed light upon how framing costs in terms of money may paradoxically increase perceptions of invested time.

Consumers dislike debt and utilize many strategies to avoid it. We propose one such strategy by considering how consumers respond to information about incomes vs. balances. Income is a flow and represents the rate at which a consumer’s balance grows. Balance is a stock, representing the accumulation of prior inflows (income) and outflows (spending). Though mathematically translatable (either can be derived from the other), we propose consumer spending may be sensitive to either income or balance information. Specifically, we propose income information will cause people to systematically underspend their financial inflows in a strategic attempt to avoid balance deficits. This strategy avoids debt; however, it also leads to accumulation. Whereas consumers who observe balance information may repeatedly spend down their accounts, consumers with only income information will accumulate balance from unspent inflows. Results from a preregistered and incentivized experimental game lend support to these predictions. Across four between-subject conditions, participants underspend their income most frequently—and therefore accumulate more money over time—when presented with information about their income and not their balance. This ongoing research seeks to further our understanding of how and why consumers make spending decisions in the face of different forms of financial information.

In choice contexts, consumers frequently consider past information received from other people. Friends share their experiences from restaurants, critics write movie reviews, and past guests leave online reviews for an AirBnB. Source memory, the ability to link a claim to its original source, is an essential aspect of accurate recall, attitude formation, and subsequent decision making. Across a set of pre-registered experiments (N = 3,308), and a variety of consumer environments, we find that source memory is more accurate for subjective opinions than for objective factual statements, indicating that opinions are more likely to be correctly attributed to their sources than are factual statements.

With the main effect robustly observed, we aim to understand the downstream consequences, boundary conditions, and underlying processes of this effect. One ongoing set of studies focuses on the role of source expertise. Another set of studies manipulates the perceived objectivity of individual claims as well as the extent to which claims provide information about the source, to understand the processes of the observed effect of claim objectivity on source memory. In this research, we replicate and expand upon an important observed effect, aiming to further our understanding of the role of claim objectivity in source memory.

This research first examines whether and under what conditions inferences about the prestige of an award suffer when women or racial minorities win the award (“If she won this award, it cannot have been that important”). And second, how to prevent such biased prestige inferences. We conduct lab experiments to study how award recipients from diverse backgrounds impact perceptions of the award. Our focus lies on scholarly awards in STEM fields, where we vary the stereotypicality of the awards by comparing research excellence awards (stereotypically given to white male, high status) to service awards. We predict that awards will be deemed less prestigious when women and racial minorities win them. Moreover, we predict that the stereotypicality of awards moderates this effect. We hypothesize that the prestige of research excellence awards (stereotypically given to white males) will be derogated to a greater extent with minority recipients (vs majority recipients) than service awards. Lastly, we test what interventions can reduce or eliminate such biased prestige evaluations. We predict that a greater award value (prize money) and more information on the selection process (e.g., the jury) will close the perceived prestige gap between majority and minority award recipients.

People often get stuck in ruts, continuing unfavorable activities when they could easily switch to preferred alternatives. We deem such behaviors—continuing less-preferred activities while passing up clear opportunities for improvement—change failures. Daily life is filled with instances of change failures—envision an individual struggling to complete a task on their phone (e.g., read, shop, email) rather than switching to a nearby computer where they could do it more easily; or, consider someone continuing to watch an unenjoyable TV program, rather than switching to the fun book sitting next to them on the side table. We propose such behavior-change failures are driven, in part, by a novel underlying cause: behavioral entrenchment, a state of increasing task-set accessibility that makes switching feel more difficult. We aim to further examine behavioral entrenchment, improve our understanding of why it occurs, and identify interventions to attenuate it. More generally, this research will shed light on why people get stuck in ruts and provide insights to help manage behavior change.

Segmentation and targeting are cornerstones of marketing strategy. Segmentation refers to the practice of dividing a market into distinct groups, while targeting describes the selection of which of those groups to serve. Often, these groups are defined by demographic characteristics like race or gender. However, recent cultural movements like Black Lives Matter and #MeToo have heightened concerns about social justice, and now segmentation and targeting by race and gender may seem increasingly inappropriate. These examples raise a natural question, given the ubiquity of these strategies: Do consumers today believe such practices are fair? In this research, we find that perceptions of fairness suffer when advertising specifically targets groups based on race or gender, relative to advertising that broadly engages the general public—even when promoted products and services would be beneficial to the targeted segment.

Decisions under uncertainty are ubiquitous, from estimating the travel time to a destination to deciding what city is most attractive. People need to both learn information that will inform their expectations about uncertain outcomes (Oliver and Winer 1987) and to evaluate options with uncertain attributes (Tversky and Kahneman 1992). While there is extensive research on multi-attribute choice problems (Wallen et al. 2008), this has largely focused on attributes that are known or that are risky. By moving to uncertain attributes, researchers must also account for how people learn and incorporate information that is uncertain (Hasher and Zacks 1979; Hertwig 2015). In one project, we test the impact of metrics on estimates of uncertainty (e.g., how the estimate of a distribution of buyer offers on a house changes when estimated in sale price or home equity). The second project tests how people make choices with multiple, correlated uncertain attributes. Correlated attributes, but specifically negatively correlated attributes, tend to defy the predictions of many choice models (Johnson, Meyer, and Ghose 1989) and thus deserve additional investigation into preference formation.

This paper studies the expansion of dollar store chains in the U.S. retail landscape following the Great Recession (2008–2019). This expansion has been accompanied by growing public concern over the impact on other local retailers and food accessibility in small, rural communities. We develop an empirical framework to evaluate the efficiency of the free entry equilibrium and impact of entry regulation on spatial market structure. A dynamic game of entry, exit and investment into spatially differentiated locations is specified, allowing for chain-level economies of density.

Choosing when to claim Social Security Administration (SSA) benefits is a critical determinant of financial health during retirement. Complicating this important decision is the role of heterogeneity; each individual’s decision is affected by individual factors that limit the usefulness of standardized advice. While past work has examined heterogeneity in claiming decisions, there has been little research to systematically test the psychosocial correlates of early or delayed SSA claiming or the effectiveness of theory-driven interventions meant to help with the claiming decision. Given that prior research has typically tested one intervention or individual difference at a time, we systematically examined how several different interventions affect when consumers intend to claim SSA benefits and how such intentions correlate with individual differences. Using a pre-registered design with replications, we analyzed intended claiming age as a function of theory-driven interventions, individual difference measures, and relevant interactions between interventions and individual differences. In so doing, we not only generate better predictive models of which retirees will decide to claim earlier or later, but also provide a methodological roadmap for data-driven theory building for complex consumer decisions.

When confronted with a set of alternatives, how do consumers choose? This project aims to advance our understanding of consumer choice processes in two important particular contexts through the use of eye-tracking. First, we examine the role of attention to specific attributes and how it varies across joint vs. separate evaluation (e.g., Hsee 1996). We will assess the extent to which the effect of attribute comparisons is driven by (a) attention to those attributes, and/or (b) weight assigned to those attributes, conditional on attention. Through online pilot testing, we have already developed a validated set of stimuli for this project. Second, we will examine multi-stage decisions. Recent behavioral work (Spiller & Ariely 2020) has considered how evaluation of a choice between options (e.g., a gift card that can be used at one of two different stores) depends on its average use rather than just its more-preferred use. Even more recently, we have extended these results to situations with objective (rather than subjective) dominance in preferences. Moving forward, measuring visual attention and modeling its effects on choice, we aim to better understand how value is integrated across alternatives when one immediate option opens the door to multiple differentiated subsequent options.

Abstract: Consumers often adopt a "give-it-to-me-now" mindset, choosing to spend in the present rather than save for the future. They choose to purchase material goods that generate unhappiness inducing social comparison (purses, cars) rather than experience goods (vacations) that lead to greater happiness over time (Van Boven and Gilovitch 2003). How can we help consumers spend less on material goods and invest more in the life experiences (vacation, retirement) that make them happy? Cozzolino et al. (2004) have written that thinking about the end of life can lead to a decreased interest in both possessions and wealth. To the extent that consumers are aware of the temporal limits of human life, we hypothesize that time will appear to be more valuable and money will appear to be less valuable; intertemporal discount rates will decrease and saving for the future will become easier. A decreased interest in possessions might also lead to an increased preference for experience goods. These preferences will likely vary depending on characteristics of the decision problem (e.g., mortality salience), decision situation (e.g., if the consumer is under time pressure), and the decision maker (e.g., if the consumer is more or less experienced at choice-making). This study will advance understanding of how consumer choices vary when they feel that life is limited and so will have applied value for business and public policy.

Abstract: Many societal challenges facing consumers, such as mitigating climate change or increasing retirement savings, are said to require urgency. Yet, researchers have only just started exploring the construct of urgency and how it shapes judgments and decisions. What is urgency, why does it matter, and how can policy makers and marketers increase it? We plan to explore these questions in the current research program. Specifically, we define urgency as a preference for earlier action over later action. We plan to (1) develop a novel measure of urgency, showing that some people have a strong preference to act now, rather than later, even if that means forgoing significant amounts of money, (2) show that this preference negatively predicts consumer demand for certain behaviors that require delayed actions (e.g., borrowing, pre-commitment), and (3) show how to frame products to increase take-up by appealing to urgency. 

Abstract: Numerous health and nutrition-related benefits programs are available in the US. One example is CalFresh in California and Colorado, a food stamps program designed to improve economic and health outcomes for low-income individuals and families. Yet, nearly 30% of people living in poverty today do not apply for the benefits they are eligible for. We hypothesize that much of this attrition can be eliminated by reducing psychological barriers driven by applicants' beliefs and narratives about the program. Our data suggest that one potential mechanism that may drive people away from applying for the benefits is the stigma attached to receiving financial assistance. However, we find that this stigma is a misperception. In this research, we aim to develop and test theoretically-grounded interventions to increase take-up rates in these benefit programs and test whether correcting this misperception would increase take-up rates. 

Abstract: The American Dream promises equal opportunity to achieve social mobility and economic success, no matter a person’s circumstances of birth or station in life. But today that promise seems to have been broken: The rich are getting richer, and the poor are getting poorer (​Global Wealth Report 2​019). As the divide between the “haves” and “have-nots” grows wider, redistributive policies are increasingly important to ensure equal access to opportunity. Yet, redistributive programs – such as wealth tax, estate tax, and “Baby Bonds” – remain largely unpopular. In this project, we aim to increase support for such policies by identifying and testing various interventions. Our approach is broadly aimed at shifting perceptions of fairness, which, in turn, should increase support for redistributive policies. We draw from research literatures exploring perceptions of time, desert, and empathy to design practical interventions capable of changing public opinion around redistribution.

Abstract: Prior research documents that consumers appear to ignore hidden costs (costs not explicitly written on price tags) associated with products they buy. Using a series of experiments eliciting willingness to pay for common consumer products that have hidden costs, we investigate the sources of this inattention in an ongoing project. Our work to date suggests that lack of knowledge, forgetfulness, and incorrect information about hidden costs do not account for inattention. Much of the existing work documenting inattention has difficulty differentiating between these hypotheses. We find that participants demonstrate familiarity with the hidden costs of the products they see (ruling out lack of knowledge), yet willingness to pay is insensitive to reminders (indicating that consumers are not forgetful) and to the provision of objective information about hidden costs (ruling out incorrect information). In ongoing research, we test several additional explanations for inattention including the idea that cognitive distraction leads consumers to ignore hidden costs and that information must be shown visually on a price tag, rather than merely known, to grab the consumer’s attention. Our current and future findings will yield a better understanding of why and when hidden costs are likely to be ignored.

Abstract: A recent paper in Nature Sustainability (Sunter et al. 2019) uses data from Google’s Project Sunroof to document that Black- and Hispanic-majority census tracts show significantly lower rates of solar PV installation, even after accounting for differences in household income and home ownership. As part of a project funded by the UCLA Sustainable Los Angeles (SLA) Grand Challenge, the current research team conducted a survey of 4,207 homeowners in Los Angeles County in April 2018. The survey focused on drivers of adoption of rooftop solar photovoltaic (PV). This project will focus on examining whether our survey responses shed new light on reasons for the disparities in adoption of rooftop solar documented by Sunter et al. (2019). For instance, we will explore to what extent these disparities also occur in LA County, and whether they are driven more by neighborhood-level, individual or other factors.

Abstract: In choice contexts, consumers frequently consider past information received from other people. Friends share their experiences from restaurants, critics write movie reviews, and past guests leave online reviews for AirBnB rentals. In order to integrate past information into a decision, it is necessary to recall the source of the information, for matters of both quality (credibility) and taste (alignment with personal preferences). Through a series of studies, we explore how source memory for opinions differs from source memory for factual statements and investigate potential moderators. Preliminary findings suggest that consumers are better able to recall the sources of opinion claims than the sources of factual claims.

Abstract: When consumers make financial decisions, they may consider both the supply and demand of their financial resources. In three related projects, we seek to better understand how consumers perceive their supply of available money. Our first project considers whether financial growth is treated like available money. To this end, we explore conditions under which consumers are more or less likely to track initial associations (such as earmarkings) to downstream financial growth. Preliminary results suggest the extent to which growth is treated as available money may depend on the strength of association between the growth and its source. A second project (with Stephanie Smith) presents equivalent supply information as both a daily income and a current balance. Using mouse-tracking data, we observe how preferentially attending to either presentation form is associated with consumer spending. Early findings suggest spending is greater when consumers attend more to balance information. Extending these results, a third project investigates individual differences in how consumers respond to changes in their supply of money. Specifically, we estimate individual sensitivity to financial changes presented as either stocks or flows. These three related projects will ultimately contribute to our understanding of how consumers assess their available supply of money.

Abstract: Metrics matter for consumer judgments and decisions (e.g., De Langhe & Puntoni 2016; Larrick & Soll 2008; Spiller, Reinholtz, & Maglio 2020). People make different decisions and judgments when considering different equivalent metrics, such as a car’s fuel efficiency in terms of miles per gallon (MPG) vs. gallons per 1,000 miles (GPkM), or the state of the economy in terms of jobs gained or lost vs. people employed. We propose two ways elicitation metrics may impact prediction interval judgments: symmetry and scaling. First, if people implicitly assume distributions are roughly normal (Flannagan, Fried, & Holyoak 1984), then metrics that are inverses of each other will become distorted when converted to the alternative representation. For example, prediction intervals which are symmetric when elicited in MPG or GPkM will typically not be in the alternative metric. Second, people may tend to believe that uncertainty scales with quantity, such that bigger quantities have greater uncertainty (Weber, Shafir, & Blias 2004). For example, predictions in a flow metric may typically have smaller prediction intervals than those in a stock metric because the units typically have smaller numeric values. These proposals reinforce the importance of attending to the metric of elicitation in judgmental forecasts.

Abstract: What determines the entertainment value of a game? Ely, Frankel, and Kamenica (2015) develop a formal model of suspense and surprise for analyzing entertainment value. We plan to apply their methodology using data from the video game League of Legends, a popular online game that combines real time strategy, role-playing game elements, and team coordination. League of Legendspresents an ideal context to study the effects of suspense and surprise on enjoyment and engagement in leisure activities. In each of League of Legends’s matches the two potential outcomes are that one team (say, the Blue team) wins or loses. A period in a match has more suspense if the variance of the next period's probability that Blue Team wins is greater. A period has more surprise if the probability that Blue team wins is further from the last period's probability. Unlike typical sporting events, the people engaged in the game are predominantly players, not fans, and they exhibit measurable behavior. This allows us to link suspense and surprise of a match to an immediate objective behavior, such as player continuation. In addition, self-reported responses to “fun” surveys are recorded and constitute a way to measure enjoyment. In order to perform this analysis, we have acquired a unique dataset containing nearly 200 variables from Riot Games, Inc. characterizing the minute-by-minute state (position, gold, experience, etc.) of approximately 10 million games. Our data also indicate whether players played prior to the observed game and continued with additional games afterwards. For a small subset of the data, we also observe surveyed enjoyment.

Abstract: The relationship between nutrition and income is well-documented – lower income households purchase and consume less healthy food than higher income households. The media and policy makers often attribute this relationship to a lack of supply; that is, lower-income households are more likely to live in neighborhoods with low availability of healthy foods, so-called food deserts. However, as supermarket entry and exit is likely endogenous, the literature has not evaluated the causal effect of food availability on demand for healthy food. To address this question we exploit the variation in store closures caused by hurricanes: hurricanes occur naturally, and the exact timing and location of a hurricane is random and thus uncorrelated with consumer purchases. We identify a group of households that regularly visited one or more stores that closed due to a hurricane, and analyze the purchase behavior before and after the store is removed from their choice set. Preliminary analysis finds that households affected by store closures purchase less fresh produce than a synthetic control group.

Background: Little information exists on how COVID-19 testing influences intentions to engage in risky behavior. Understanding the behavioral effects of diagnostic testing may highlight the role of adequate testing on controlling viral transmission. In order to evaluate these effects, simulated scenarios were conducted evaluating participant intentions to self-isolate based on COVID-19 diagnostic testing availability and results.

Methods: Participants from the United States were recruited through an online survey platform (Amazon Mechanical Turk) and randomized to one of three hypothetical scenarios. Each scenario asked participants to imagine having symptoms consistent with COVID-19 along with a clinical diagnosis from their physician. However, scenarios differed in either testing availability (testing available v. unavailable) or testing result (positive v. negative test). The primary outcome was intention to engage in high-risk COVID-19 behaviors, measured using an 11-item mean score (range 1-7) that was pre-registered prior to data collection. Multi-variable linear regression was used to compare the mean composite scores between conditions. The randomized survey was conducted between July 23rd to July 29th, 2020.

Results: A total of 1400 participants were recruited through a national, online, opt-in survey. Out of 1194 respondents (41.6% male, 58.4% female) with a median age of 38.5 years, participants who had no testing available in their clinical scenario showed significantly greater intentions to engage in behavior facilitating COVID-19 transmission compared to those who received a positive confirmatory test result scenario (mean absolute difference (SE): 0.14 (0.06), P = 0.016), equating to an 11.1% increase in mean score risky behavior intentions. Intention to engage in behaviors that can spread COVID-19 were also positively associated with male gender, poor health status, and Republican party affiliation.

Conclusion: Testing availability appears to play an independent role in influencing behaviors facilitating COVID-19 transmission. Such findings shed light on the possible negative externalities of testing unavailability.

Trial registration: Effect of Availability of COVID-19 Testing on Choice to Isolate and Socially Distance, NCT04459520, https://clinicaltrials.gov/ct2/show/NCT04459520

Abstract: What determines the entertainment value of a game? Ely, Frankel and Kamenica (2015) develop a formal model of suspense and surprise for analyzing entertainment value. We plan to apply their methodology using data from the video game League of Legends, a popular online game that combines real-time strategy, role-playing game elements and team coordination. League of Legends presents an ideal context to study the effects of suspense and surprise on enjoyment and engagement in leisure activities. In each of League of Legends’s matches the two potential outcomes are that one team (say, the Blue team) wins or loses. A period in a match has more suspense if the variance of the next period's probability that Blue Team wins is greater. A period has more surprise if the probability that Blue team wins is further from the last period's probability. Unlike typical sporting events, the people engaged in the game are predominantly players, not fans, and they exhibit measurable behavior. This allows us to link suspense and surprise of a match to an immediate objective behavior, such as player continuation. In addition, self-reported responses to “fun” surveys are recorded and constitute a way to measure enjoyment. In order to perform this analysis, we have acquired a unique dataset containing nearly 200 variables from Riot Games Inc., characterizing the minute-by-minute state (position, gold, experience, etc.) of approximately 10 million games. Our data also indicate whether players played prior to the observed game and continued with additional games afterward. For a small subset of the data, we also observe surveyed enjoyment.

Abstract: We study the relationship between online reviews and advertising spending in the hotel industry. Combining a dataset of TripAdvisor reviews with other datasets describing these hotels’ advertising expenditures, we show, first, that online ratings have a causal demand-side effect on ad spending. Second, this effect is negative: Hotels with higher ratings spend less on advertising than hotels with lower ratings. This suggests that hotels treat TripAdvisor ratings and advertising spending as substitutes, not complements. Third, the relationship is stronger for independent hotels than for chains, and stronger in less differentiated markets than in more differentiated markets. The former suggests that a strong brand name continues to provide some immunity to reviews, and the latter suggests that the advertising response is stronger when ratings are more likely to be pivotal. Finally, we show that the relationship between online ratings and advertising has strengthened over time, just as TripAdvisor has become more popular, implying that firms respond to online reviews if and only if consumers respond to them.

Abstract: In 2012, the state of Washington created a legal framework for production and retail sales of marijuana. Ten other U.S. states and Canada have followed. These states hope to generate tax revenue for their state budgets while limiting harms associated with marijuana sales and consumption. We use a unique administrative dataset containing all transactions in the history of the industry in Washington to evaluate the effectiveness of different tax and regulatory policies under consideration by policymakers and study the role of imperfect competition in determining these results. We use both a reduced form sufficient statistic approach and structural methods to show a number of results. First, Washington’s strict cap on firm entry has resulted in retailers with substantial market power. This market power has immediate consequences for both state tax revenue and consumer welfare. Second, because these entry restrictions have caused retailers to behave like local monopolists, the state could substantially increase revenue generated from marijuana legalization by acting as the retailer itself, as it did for alcohol sales until 2012, without a large increase in prices. Third, despite having the nation’s highest tax rate at 37%, marijuana in Washington is not overtaxed, as many policymakers in other states have argued. The high taxes do not result in lower revenue or a substantial black market. Instead, Washington is still on the upward-sloping portion of the Laffer curve, and the amount of revenue generated by a tax increase is significantly larger due to retailer market power than it would be under perfect competition. Our results suggest there is not widely available black market marijuana competing with legal retail sales. Finally, the high excise tax is primarily borne by consumers and not by firms, and there is a large social cost associated with each dollar raised.

Abstract: We study the market for fake product reviews on Amazon.com. These reviews are purchased in large private internet groups on Facebook and other sites. We handcollect data on these markets to characterise the types of products that buy fake reviews and then collect large amounts of data on the ratings and reviews posted on Amazon for these products, as well as their sales rank, advertising and pricing behavior. We use this data to assess the costs and benefits of fake reviews to sellers and evaluate the degree to which they harm consumers. The theoretical literature on review fraud shows there exist conditions when they harm consumers and conditions where they function as simply another type of advertising. Using detailed data on product outcomes before and after they buy fake reviews we can directly determine if these are low-quality products using fake reviews to deceive and harm consumers or if they are possibly high-quality products who solicit reviews to establish reputations. We find that a wide array of products purchase fake reviews including products with many reviews and high average ratings. Soliciting fake reviews on Facebook leads to a significant increase in average rating and sales rank but the effect disappears after roughly 1 month. After firms stop buying fake reviews their average ratings fall significantly and the share of one-star reviews increases significantly, indicating fake reviews are mostly used by low quality products and are deceiving and harming consumers. We also observe that Amazon deletes large numbers of reviews and we document their deletion policy.

Abstract: CEOs and companies are increasingly speaking out about controversial issues such as abortion, gun control, transgender rights, and race. There is little research, however, on whether corporate political activism affects political participation and interest in political topics. The goal of this study is to assess whether CEOs publicly taking a position on a controversial issue affects rates of political participation or interest in politics, and whether these effects differ for Democrats and Republicans.

Abstract: How do consumers value sets of alternatives and choose among them? The normative value of a set is derived from the expected value of the best option in the set. As a result, adding options to a set can increase the normative value but not decrease it. Yet prior work has found that the perceived value of a choice set systematically deviates from this normative benchmark: When less-attractive options are included in a set, the perceived value of the set decreases. In this research, we study how such undervaluation relates to visual attention by measuring what consumers attend to during choice. Prior research has found a causal role of attention in choices between liked items: The more attention an option receives, the more likely it is to be chosen. In this work, we examine how allocation of attention among options within a set relates to the ultimate choice of that set and implied perceived value. Through measuring visual attention, we hope to better understand how value is integrated across alternatives when one immediate choice opens the door to additional choices down the road.

Abstract: We study how promotions affect consumer behavior on an online retailing platform in the long term. We focus on a specific promotion: offering consumers coupons for products that have been in their shopping carts for more than one day. In a randomized field experiment involving more than 100 million customers with Alibaba Group—China’s largest e-commerce company—we randomly assigned half of eligible customers to a treatment condition where they might receive promotions for products in their shopping carts, while the other half of eligible customers did not receive coupons. We document unintended consequences of this promotion program during the month following our treatment period. On the positive side, our promotion program boosted consumer engagement, increasing the daily number of products customers viewed as well as customers’ daily purchase likelihood on the platform during the post-treatment period. On the negative side, we find that our promotion program intensified strategic consumer behaviors in two ways. First, receiving our promotions in the treatment period increased the proportion of products that consumers added to their shopping carts upon viewing them in the post-treatment period, possibly due to customers’ anticipation of promotions targeted at products in their shopping carts. Second, receiving our promotions in the treatment period lowered the prices customers paid for products in the post-treatment period. This effect holds for products that did not offer shopping-cart promotions, suggesting that prior use of shopping-cart promotions made people more price sensitive and trained them to search for other promotion mechanisms beyond shopping-cart-specific promotions. Importantly, both the positive and negative long-term effects spilled over to sellers on the same retailing platform that did not previously offer promotions to consumers. Our findings suggest that price promotions may change expectations and reference points, which can further produce both a positive long-term effect on consumer engagement and a negative long-term effect on strategic behavior. We discuss the practical implications of our findings for platforms and retailers.

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Abstract: We study the value of short-lived and experiential-oriented pop-up stores, a popular type of omnichannel retail strategy, on both retailers that participate in pop-up store events and retailing platforms that host these retailers. We conduct a large-scale, randomized field experiment with Alibaba Group involving approximately 800,000 customers. We randomly assign consumers to either receive a message about an upcoming weeklong pop-up store event organized by Alibaba’s business-to-consumer platform (Tmall.com) or not receive any message about the event. We find that our message increased foot traffic to the pop-up store and in turn boosted expenditure at participating retailers’ online stores at Tmall after the event ended. Furthermore, we use advanced Wi-Fi technology to track customers’ visits to the pop-up store—a missing component from past research that commonly relies on point-of-sales data. We find that pop-up store visits substantially increased customers’ subsequent expenditure at participating retailers’ Tmall stores. In addition, from a platform perspective, we show that pop-up store visits increased customers’ purchases at retailers that sell related products on Tmall but did not participate in the pop-up store event. Additional analyses shed light on possible mechanisms underlying the cross-channel and spillover effects of pop-up stores and demonstrate that these effects were concentrated on prospective consumers.

Abstract: I develop and test a theory of goal maintenance that posits that individuals who achieve a life-changing goal — such as getting out of debt, becoming sober or losing a substantial amount of weight — are more likely to maintain the progress achieved during goal pursuit if they psychologically distance themselves from the pre-goal self and routinely engage in activities that activate memories of the past, less-flattering self. This theory of goal maintenance builds on prior research in identity appraisal (Wilson & Ross, 2001), vividness and intertemporal choice (Hershfield et al., 2011), and self-discrepancy (Higgins, 1987) as it relates intertemporal discrepancies in self-state representation to motivation and behavior. I applied this theory of goal maintenance to weight-loss maintenance. Through a series of six studies, I provide evidence that goal maintenance is a distinct psychological phenomenon from goal pursuit along the dimensions of past self-salience and psychological distance; and I also show that activating memories of a past, overweight self and feeling more psychologically distant from this self lead to implicit goal maintenance behavior, such as a higher willingness to pay for healthy versus unhealthy items and greater interest in learning about healthy behaviors and topics. Additionally, I provide evidence across studies that past self-salience is more associated with a prevention regulatory focus (i.e., preventing unhealthy behaviors), whereas psychological distance is more associated with a promotion regulatory focus (i.e., promoting healthy behaviors). Further, a longitudinal study of a small sample of individuals examined whether the positive effects of salience and psychological distance on weight-maintenance behaviors may persist over time and outside of a laboratory environment.

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