Megan Hunter

Assistant Professor of Marketing

Carroll School of Management - Boston College

Research Interests

Quantitative Marketing, Empirical Industrial Organization, Econoimcs of Information, Online Reviews, Consumer Decision-Making, Consumer Finance



Can Facing the Truth Improve Outcomes? Effects of Information in Consumer Finance - with Jessica Fong (Marketing Science 2022) 

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

VQMS Seminar Zoom Recording

FTC Conference Zoom Recording

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. 

Search for Differentiated Products: Empirical Evidence and Information Design (Formally circulated as "Guiding Consumers through Lemons and Peaches: A Dynamic Model of Search over Multiple Characteristics") -with Pedro Gardete

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 that allows us to characterize the full search problem. In contrast with the existing literature, we find that the seller's incentives to engage in search design activities tend to match the consumers'.

Consumer Choice and Corporate Bankruptcy (with Sam Antill)

Using incentivized experiments, we estimate the causal effect of a Chapter 11 bankruptcy filing on consumer demand for the bankrupt firm's products. Knowledge of a firm's bankruptcy reduces a consumer's willingness to pay by 18-35%, depending on the industry. We show evidence that consumers fear both (i) a liquidation preventing future relationships with a firm and (ii) a decline in quality while a firm reorganizes. Estimating a structural model of consumer demand, we quantify the large negative impact of bankruptcy on consumer welfare and a bankrupt firm's market share.

Recycle Right: How to Decrease Recycling Contamination Without Sacrificing Recycling Rates?  (with Gergana Nenkov and Aylin Cakanlar) - Draft Available Upon Request

Plastic pollution represents a grand challenge facing society, yet the amount of plastic being recycled and turned into new items 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 therefore investigates the potential for informational point-of-disposal signage to decrease recycling contamination, without discouraging recycling. With one longitudinal field study and four experiments, the authors show that prescriptive point-of-disposal signage (“Recycle these items”) does not decrease recycling contamination and inadvertently can increase over-recycling, whereas proscriptive signage (“Do not recycle these items”) decreases recycling contamination but lowers overall recycling rates. Mixed signage, combining both strategies, indicates the most promise for reducing contamination without sacrificing recycling rates. By examining such nuanced recycling communication strategies, this research aims to shift the conversation, from “recycle more” to “recycle right.”


MKTG 2153, Customer Research, Spring 2021, Fall 2021