PUBLICATIONS:

• How Should Firms Manage Excessive Product Use? A Continuous-Time Demand Model to Test Reward Schedules, Notifications, and Time Limits, with Paulo Albuquerque

Published in Journal of Marketing Research, 56 (3), 379–400 (DOI)

Abstract is here

Media coverage: 

• • • • "How Companies Can Battle Gaming Disorder" by Harvard Business Review 

      • "Making the Online World Less Addictive—and More Popular" by American Marketing Association 

      • "Using ‘World of Warcraft’ to cut gamer screen time, increase maker revenue" by The Source at Washington University in St. Louis

Some news on the topic: 

• • • • "Video Game Addiction: China Imposes Gaming Curfew For Minors"

• Can Non-Tiered Loyalty Reward Programs be Profitable? with Arun Gopalakrishnan, Zhenling Jiang, and Raphael Thomadsen

Published in Marketing Science, 40 (3), 508-526 (DOI) 

Abstract is here

Media coverage: 

• "Loyalty Programs Boost Businesses' Ability to Keep Customers" by the Source at Washington University in St. Louis

• The Impact of New Content and User Community Membership on Usage of Online Games, with Paulo Albuquerque

Published in Customer Needs and Solutions 9, 1-24 (DOI)

Abstract is here

WORKING PAPERS:

• Consumer Interactions and Peer Effects in Socially-Connected Digital Products, with Yijun Chen

Manuscript available here 

Abstract: 

Social interactions are integral to socially-connected products like online games and social media platforms. These interactions are formed and measured during user interactions, making them not independent of outcomes such as product usage and churn. This endogeneity makes it challenging to measure causal peer effects, which are crucial for managerial decision-making. This study tackles the endogeneity of social connections in the marketing strategies of socially-connected businesses. Using data from a popular online game, we develop and estimate a joint model of network formation and peer effects on churn. Our key findings are: (i) Social connections are largely driven by unobserved gamer characteristics. Ignoring the endogeneity leads to underestimating peer effects. (ii) Networks with a wider range of gamer characteristics have less balanced social connections. (iii) The preference for a more or less balanced network depends on the business's CRM objectives. A balanced network is favorable for mitigating the negative impact from popular gamer's churn, while a less balanced network is more favorable for leveraging the positive influence of popular gamers. These findings suggest that companies seeking to utilize peer effects in marketing strategies should consider network composition and endogenous network formation in their product design and community management strategies.

• Consumer Information Asymmetry in Online Product Reviews

Manuscript available upon request 

Abstract: 

Firms usually know the distribution of tastes and price sensitivities across the consumer population, or do their best to learn it. At the same time, individual consumers are unaware of this distribution. This constitutes an information asymmetry. This paper shows that when an individual makes a purchase decision using online consumer product reviews as her major source of information about the product quality, the lack of information about consumer heterogeneity does not allow her to correctly infer the true product quality from the reviews. The inferred product quality is systematically biased, and the bias depends on the consumer’s characteristics. In the market with such information asymmetry, a strategic forward-looking firm is able to maximize its profits by setting the price to attract consumers who would give the product a high rating. Using a structural dynamic model and simulations, this paper shows that the firm still earns higher profits if consumers are informed about the consumer heterogeneity distribution, i.e. in the market with no information asymmetry. The findings are in line with the empirical evidence that firms selling their products/services over the Internet (such as hotel booking web-sites) try to reduce the information asymmetry, for example, by disclosing the average product ratings by consumer types to their prospective customers.