Funded Research

 

Advance the Field with Your Research

 

The Morrison Family Center for Marketing Studies and Data Analytics is endowed by Donald and Sherie Morrison to promote the study and dissemination of knowledge in marketing studies and data analytics.

Grants are awarded to proposals that show strong publication potential to advance this field. All applications are reviewed by the faculty director and peer experts, and selected projects will be notified. If you are considering submitting an application, please prepare the following:

  • A current CV for all researchers involved;
  • A brief research proposal, which must include the research question, methodology, data source (if applicable) and academic contribution; and a budget

If you have further questions, please email all queries to
Mary Minter at mary.minter@anderson.ucla.edu.

 

Current Research: Grant Recipients

 

Preferences for Suspense and Surprise in a Massive Online Computer Game

Paola Giuliano | Joint research with Ashvin Gandhi, Ph.D.

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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.

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Advertising Strategy in the Presence of Reviews: An Empirical Analysis

Brett Hollenbeck | Joint research with Sridhar Moorthy, Ph.D., and Davide Proserpio, Ph.D.

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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.

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Taxation and Market Power in the Legal Marijuana Industry

Brett Hollenbeck | Joint research with Kosuke Uetake, Ph.D.

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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.

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The Market for Incentivized Reviews

Brett Hollenbeck | Joint research with Sherry Hu, Ph.D.

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Abstract: We study the marketplace for incentivized reviews for online products. These are sometimes called “fake reviews,” and the marketplace for these reviews is large and widespread. We plan to document the scale of the market and the nature of the products purchasing these reviews. We will show the value to firms of purchasing fake reviews in terms of sales rank, prices and average rating on Amazon. We then investigate whether or not fake reviews should be thought of as harmful to consumers and online marketplaces. Do the products purchasing these reviews temporarily experience a boost in sales followed by a sharp decrease in ratings once real sales occur, or do they maintain high reviews once they are being written organically? By contrast, should fake reviews be thought of as merely a novel form of advertising?

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CEO Activism and Consumer Demand

Christopher Poliquin | Joint research with Young Hou, Ph.D.

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Abstract: CEOs are increasingly speaking out on controversial social issues like gun control, abortion, immigration policy and LGBTQ+ rights. There is little research, however, on the potential risks and benefits of CEO activism on such issues. We aim to provide businesses much-needed guidance by investigating how CEO positions on these issues can affect consumer perception and demand for their firms' products.

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What Motivates Social Security Claiming Age Intentions? Testing Behaviorally Informed Interventions Alongside Individual Differences.

Hal Hershfield | Joint research with Suzanne Shu, Ph.D., and Stephen Spiller, Ph.D.

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Abstract: It is well recognized that there is substantial heterogeneity among U.S. workers who are eligible to claim SSA retirement benefits. This heterogeneity is not just demographic (gender, income, family status, etc.) and generational (cohort), but also psychographic, as measured through loss aversion, intertemporal patience, propensity to plan and other psychological scales. The impact of psychographic heterogeneity on how retirees understand and determine their benefit claiming is not well understood, although some progress has been made via recent NBER RRC projects by Shu, Payne and others. We propose a large-scale experiment to test the effectiveness of a range of knowledge and claiming interventions against individual factors to better understand how individual differences interact with these influences on claiming intentions. Our approach is modeled after recent work by DellaVigna and Pope (2016), in which 18 treatment conditions were tested with over 500 subjects per arm on Amazon Mechanical Turk (MTurk). Predictions will be preregistered to distinguish confirmatory from exploratory analyses.

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The Role of Attention in Evaluating Choices Among Choices

Stephen Spiller | Joint research with Stephanie Smith, Ph.D.

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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.

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