First Look

Publications

Targeted Advertising as a Signal

Abstract

This study presents a signaling model of advertising for horizontally differentiated products. The central ingredients of the model are two important characteristics of advertising—targeting and noisy information content. The theory yields interesting results about the informational role of targeted advertising and its consequences. First, targeting can itself serve as a signal on product attributes. Second, the effectiveness of targeting depends not only on firms knowing consumer preferences, but also on consumers knowing that firms know this. This creates a distinction between strategies of targeting and personalization. Third, the effectiveness of targeting in equilibrium may (far) exceed the information contained directly in the targeted message. Fourth, information content is not, however, superfluous. Specifically, when ads contain no information, a targeting equilibrium does not exist. Together, these results reveal how advertising conveys information both through the content of the message and the firm's choice of advertising medium. Furthermore, the model is robust to the various critiques of prior work on ads as signals; namely, that ad content is irrelevant, ad exposure is unnecessary, and the choice of ads as signals is inherently arbitrary.

The Consumer Psychology of Mail-in Rebates

Abstract

Consumers who buy a product intending to use an accompanying mail-in rebate often do not redeem the rebate. To explain this behavior, we argue that consumers use an anchoring and adjustment approach to predicting the likelihood of redeeming a rebate. In keeping with previous research on anchoring and adjustment, for instance, we show that when presented with a desirable product, consumers anchor on scenarios of successful redemption and adjust insufficiently for things that could go wrong in the redemption process. However, we also propose this anchoring and adjustment process is impacted by a consumer's motivation to purchase the rebated product. In particular, we propose the anchor employed will be driven by the valence of a consumer's underlying motivation. Specifically, a consumer that is motivated to purchase the product will anchor on scenarios of successful redemption, while a consumer that is motivated to avoid purchasing will anchor on scenarios of failed redemption. We also propose that the degree of adjustment consumers employ will be driven by their strength of motivation—i.e., the stronger the motivation, the less the adjustment to the motivational anchor. Consequently, mail-in rebates either can serve to enhance or to dampen purchase intention depending on a consumer's underlying motivation. In other words, rebates offer consumers a means to justify a preferred course of action. Across a series of three studies, we show this to be the case.

Star Power: Colleague Quality and Turnover

An abstract in unavailable at this time.

What It Takes to Make 'Star' Hires Pay Off

An abstract in unavailable at this time.

Read the preview: http://sloanreview.mit.edu/the-magazine/articles/2010/winter/51220/what-it-takes-to-make-star-hires-pay-off/

Acting in Time Against Disasters: A Comprehensive Risk Management Framework

An abstract in unavailable at this time.

Book: http://www.whartonsp.com/store/product.aspx?isbn=0137044852

Institutions and Inequality in Single Party Regimes: A Comparative Analysis of Vietnam and China

Abstract

Despite the fact that China and Vietnam have been the world's two fastest growing economies over the past two decades, their income inequality patterns are very different. In this paper, we take a deep look at political institutions in the two countries, demonstrating that profound differences in these polities influence distributional choices. In particular, we find that elite institutions in Vietnam encourage the construction of broader policy-making coalitions, have more competitive selection processes, and place more constraints on executive decision making than exists by way of elite institutions in China. As a result, there are stronger political motivations for Vietnamese leaders to provide equalizing transfers that limit inequality growth among provinces.