Needs and Solutions

I Paid More than You (Before)?! The Effects of Self-Construal and Comparison Target on Price Unfairness Perceptions Abstract Previous research suggests that when consumers encounter discrepant prices due to dynamic pricing, a social comparison evokes stronger unfairness perceptions than a temporal comparison does. In this paper, the authors show how this effect may vary depending on consumers' self-construal. Two experiments find that while independent consumers perceive stronger price unfairness when paying more than other consumers, interdependent consumers perceive stronger price unfairness when paying more than what they did in the past. These effects occur because consumers are differentially sensitive, as a function of their self-construal, to social versus temporal comparisons in their self-appraisal. Our results show that self-construal affects consumers' means for maintaining their self-appraisal and alters the relevance of different comparison targets in price unfairness perceptions.

Advertising Originality Decisions in Competition Abstract Originality is a critical determinant of advertising success. However, firms frequently opt to launch unoriginal advertising campaigns. Why would firms opt for unoriginal ads when originality is considered as the "pinnacle"? In this paper, the authors investigate advertising originality decisions for market leaders and followers. They first establish empirically that unoriginal advertising, and more specifically copycat advertising, is a common option across diverse markets even for leading brands. Then, they develop an analytical framework to investigate the optimality of originality decisions. They model creative advertising themes as a "best-shot" type of public good, where a firm's originality decision is influenced by market structure as well as market growth. The authors then examine whether a firm creates an original ad or opts for an unoriginal one, either by copycatting a competitor or by remaking an existing ad theme. The findings suggest that there is no oversupply of original ads. An original ad can be created by either the leading firm or its follower to boost the valuation of its loyal consumers and profit from higher prices or to attract switchers.

Using the Double Transparency of Autonomous Vehicles to Increase Fairness and Social Welfare Abstract Fully autonomous vehicles (AVs) create double transparency regarding human driving decisions. Opaque decision rules in the human mind have become transparent in AVs, and in turn, can be made transparent to third parties. This double transparency is creating an unprecedented opportunity to regulate driving decision rules to eliminate unreasonable selfishness and increase fairness and social welfare because AVs can be programmed to follow regulations 100% of the time. In this experimental ethics study, we performed an incentive aligned online experiment to examine humans' willingness to sacrifice other people's lives to protect their own in five different accident scenarios and to investigate the potential for AV regulation to curb unreasonable selfishness, thereby increasing fairness and social welfare. Our results reveal the need to regulate rules governing AV driving decisions; yet, a full transparency policy for decision algorithms may not necessarily lead to desired social effects. Thus, regulations should be tailored to different scenarios.

Coordinating Marketing and Production with Asymmetric Costs: Theory and Estimation Abstract This paper proposes a theoretical framework for decision making when the firm needs to make marketing and production/order decisions simultaneously before demand uncertainty is resolved. We discuss the theoretical properties of the framework for single and multi-product firms; in addition, we show that the framework can be extended to allow for competitive reaction in a duopoly setting. We propose an empirical method to operationalize the model and compare the results to those from extant methods. The empirical results for both single and multi-product firms show that the proposed method outperforms decision making using standard econometric methods. In particular, depending on customer lifetime value (CLV) and other error costs and price elasticities, the loss in potential profits by using the standard regression-based methodology or quantile regression can be considerable.

Examining Brand Strength of Political Candidates: a Performance Premium Approach Abstract Despite the growth of research on political marketing, fundamental questions concerning brand value of political candidates and its relationship with marketing mix activities remain unanswered. This research extends premium-based brand valuation methods to the political context by presenting a performance premium approach to assessing the strength of politicians' brands and exploring the relationship between politician brand strength and political advertising. We develop a joint hierarchical Bayesian model of brand performance and marketing activity and estimate our model using data on the election performance and advertising expenditures of political candidates from US House of Representatives elections. Our findings suggest that politicians who possess a strong brand—those that perform better than expected given the partisan leanings of their districts, advertising spending, and other model controls—face a consequence for their brand strength in which political advertising by their opponents has a stronger negative impact on their performance compared to the effect of political advertising against politicians with weaker brands. We discuss the implications of our findings for political marketing.

Marketing Scholars and Political Marketing: the Pragmatic and Principled Reasons for Why Marketing Academics Should Research the Use of Marketing in the Political Arena Abstract The marketing discipline needs to pay more attention to political marketing. Marketing has permeated deeply into the heart of elections and government. Numerous political players, including presidents and prime ministers, politicians, and parties, as well as government departments and councils turn to marketing in their pursuit of political goals. While media coverage of recent issues, such the Trump campaign's use of big data, has shone a spotlight on commercial marketing techniques in the political and governmental arena, scholars from multiple disciplines (marketing, political science, and communication) have been exploring cross-disciplinary research on political marketing for several decades. This article argues that it is time for the marketing discipline to embrace political marketing more openly than before. This article will make the case by outlining the broad scope of political marketing in practice and research, providing examples of political marketing, and then discussing the significant ethical implications of marketing politics. Finally, it will provide reasons for why marketing scholars should research this dynamic and profoundly impactful area.

A Factorial Hidden Markov Model for the Analysis of Temporal Change in Choice Models Abstract Consumers' preferences for various product attributes change over time. Modeling such temporal changes through a single process assumes that all the attributes' preferences change together with the same dynamics; however, this assumption is not appropriate when there are several processes with distinct characteristics. We propose a new non-homogeneous factorial hidden Markov model (FHMM) for choice models to dynamically segment consumers into distinct states while each preference parameter may follow a distinct Markov process. The transition probabilities are modeled as time-varying at the individual level, affected by covariates of a feedback term of the consumer's previous purchase decision, specific to each Markov process. We motivate the proposed approach by an application to a scanner panel choice dataset and find two processes with entirely different characteristics governing the shifts in two preference attributes. Model fit and prediction power based on Brier scores show the superiority of the proposed non-homogeneous FHMM in capturing temporal changes in preferences compared to a traditional hidden Markov model as well as a benchmark comparison model.

Social-Spatial Effects in Pricing: When and How Vertical Orientations Shape Processing of Price Comparisons Abstract Marketers frequently compare a product's sale price against its regular price to accentuate perceptions of value. The effectiveness of these price comparisons is predicated on consumers sufficiently processing the deal's depth (i.e., the regular price − sale price differential). Although research indicates consumers can generally make such assessments, we document an exception when price comparisons are presented in a format that aligns with the vertical orientation of consumers. The correspondence between vertical price comparisons and the mindsets of individuals who value social hierarchies (i.e., who are vertically oriented) induces a sense of "fit" that reduces processing and leads to similar responses to the offer regardless of deal depth. This effect manifests regardless of whether vertical orientations are measured as a chronic state or temporarily primed. Supporting our theorizing, vertically oriented participants report paying less attention and being less motivated to process price comparisons. Theoretical implications of these findings are discussed as are suggestions for future research examining how social views may shape consumer processing of product attribute and point-of-purchase information.

Understanding Influence of Marketing Thought on Practice: an Analysis of Business Journals Using Textual and Latent Dirichlet Allocation (LDA) Analysis Abstract Several calls have been made to understand the influence of marketing thought on practice (Rust et al. J Mark 68:76–89, 11). Practice includes practitioners who mostly use concepts and frameworks (general practice) and who mostly use quantitative models (quantitative practice). This paper compares the relative influence of marketing thought compared to other disciplines and uncovers seminal marketing thoughts that have influenced both general and quantitative practice. Using topic modeling procedures on 94 years of Harvard Business Review, 46 years of Sloan Management Review, and 47 years of Management Science, this paper illuminates the evolution of the influence of marketing thought over time. Despite marketing's slow start, it has an increasing influence on both general and quantitative practice. Foundational topics in marketing such as product, promotion, place, consumers, and marketing research methods have influenced both general and quantitative practice. Surprisingly, price has not influenced practice. Marketing Communications is increasingly influential while Channel Management, Product/Service Management, and surprisingly Customer Relationships have lost their early influence to practice. General practitioners find Marketing Environment and Business Models increasingly influential while quantitative practitioners find Social Influence and Metrics increasingly influential. Quantitative practice has kept up to speed with marketing thought that influence general practice.

Introduction to the Special Issue: 2016 Choice Symposium

Alexandros Sfakianakis
Anapafseos 5 . Agios Nikolaos
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6948891480

alsfakia@gmail.com