Megan Hunter
Assistant Professor of Marketing
Carroll School of Management - Boston College
Research Interests and Methods
Quantitative Marketing, Empirical Industrial Organization, Econoimcs of Information, Online Reviews, Consumer Decision-Making, Consumer Finance, Sustainability, Experiments, Structrual Models
Publications
Multiattribute Search: Empirical Evidence and Information Design - with Pedro Gardete (Forthcoming at Marketing Science 2024)
The search literature has relied on parsimonious models to recover consumer fundamentals and characterize market outcomes. We investigate simple online search
patterns that suggest that the dualistic view of fixed sample vs. sequential search modes is the likely result of coarse data combined with methodological convenience.In contrast with these paradigms, we find consumers are selective about the product attributes they inspect, they revisit items to acquire additional information, and often
convert without collecting all available data about the selected alternatives.
Our substantive motivation is the problem of providing information to consumers in a market with differentiated products. We propose a new model of gradual consumer
search based on simulated beliefs and “in tandem” decision-tree and likelihood computation that allows us to characterize the full search problem in contexts with moderate
numbers of alternatives. We find that the seller’s incentives to engage in search design activities tend to match the consumers’.
This paper explores the impact of information avoidance on credit scores. Specifically, under what circumstances do individuals avoid information about their credit reports, and how does avoiding this information affect their future credit scores? Using data from a consumer finance platform, we find that a decline in credit score decreases the likelihood that an individual views her credit report in the future, even for individuals with high credit scores. We then measure the impact of receiving information on future credit scores. To obtain a causal estimate, we use variation in whether an individual views her credit report induced from email campaign A/B tests implemented by the firm. We find heterogeneous effects of information on credit scores. For individuals who were more likely to avoid the information (users whose credit scores were decreasing), viewing their credit reports further decreased credit scores. Individuals on a flat or increasing trend bolstered their credit scores upon viewing. This finding suggests that encouraging individuals to access information when they have declining credit scores, and thus are more likely to avoid information, may worsen their financial health.
Working Papers
Chasing Stars: Firms' Strategic Responses to Online Consumer Ratings - Job Market Paper
In this paper I show that firms strategically take actions in order to improve their ratings due to the rating's platform rounding system. In my context, Yelp displays ratings to the nearest half star, as is common practice on many ratings platforms. Since the true average rating is not shown, firms have an incentive to remain just above the rounding threshold to have a higher displayed rating. However once they pass the threshold the incentive to improve their ratings drops. I study this in the context of auto repair, a market with a lot of uncertainty on the consumer side, and thus a good market to study reviews, which improve consumer knowledge. I first show that consumers value ratings in this market and that firms' revenue and number of consumers increases with increases in their displayed rating. To overcome identification issues of ratings and quality and to show the causal estimate, I utilize a regression discontinuity and instrumental variable strategy. Because ratings have a significant effect on demand, firms should pay attention to their ratings. I next show evidence that firms take on actions when they are close to roundings thresholds, as can be seen with bunching behavior at these thresholds. Next I build a structural model to quantify these actions and I consider how the firms' incentives would change under different ratings displays.
Consumer Choice and Corporate Bankruptcy (with Sam Antill)
Revise and Resubmit at the Journal of Finance
We estimate the indirect costs of corporate bankruptcy associated with lost customers. In incentivized experiments, randomly informing consumers about a firm's Chap-
ter 11 reorganization lowers their willingness to pay for the rm's products by 18-35%. Up to 48% of consumers are aware of major bankruptcies. Using our experiments to estimate a structural model, we show that a Chapter 11 bankruptcy causally reduces a firm's value by 10-31%, depending on the industry, through lost customers. We show that these costs are unlikely to arise before bankruptcy. Our results thus provide novel support for the tradeoff theory, a pillar of corporate finance.
Recycle Right: How to Decrease Recycling Contamination Without Sacrificing Recycling Rates? (with Aylin Cakanlar and Gergana Nenkov) - Draft Available Upon Request
Minor revision at the Journal of Academy of Marketing Science
Plastic pollution represents a grand challenge facing society, yet the amount of plastic being recycled is only about 5%. This recycling crisis has intensified with the growing
problem of recycling contamination (i.e., incorrect placement of unrecyclable materials in recycling receptacles). This research investigates the potential for informational
point-of-disposal recycling signage to decrease recycling contamination. In a longitudinal field study and five experiments, the authors demonstrate that providing
schema-congruent prescriptive information (“Recycle these items”), does not reduce recycling contamination and may inadvertently lead to over-recycling. In contrast,
proscriptive information that is incongruent with established schemas (“Do not recycle these items”) prompts more effortful, piecemeal processing. This encourages
individuals to integrate the information into their recycling decisions, diminishing theirdependence on pre-existing beliefs and expectations regarding recycling and, consequently, lowering contamination rates. Recycling expertise is found to moderate the effects of point-of-disposal recycling signage. By examining such nuanced
recycling communication strategies, this research aims to shift the conversation, from “recycle more” to “recycle right.”
Teaching
MKTG 2153, Customer Research, Spring 2021, Fall 2021, Fall 2023