Research Seminars

36th edition of the HEC-ESSEC-INSEAD research seminar


Speaker: Daniel Halbheer, HEC Paris; Hai duong T. Mac and Reetika Gupta, ESSEC Business School; Michel Tuan Pham, Visiting Professor at INSEAD; Stéphane Borraz and Delphine Dion, ESSEC Business School; Paulo Albuquerque, INSEAD and L.J. Shrum, HEC Paris.
Professors of Marketing

13 March 2015 - Room S228 - From 9:00 am to 4:30 pm

“Payment Evasion”
Stefan Buehler (St Gallen), Daniel Halbheer (HEC Paris) and Michael Lechner (St Gallen)

This paper models payment evasion as a source of profit by letting the firm choose the price charged to paying consumers and the fine collected from detected payment evaders. The consumers choose whether to purchase, evade payment, or refrain from consumption. We show that payment evasion allows the firm to charge a higher price to paying consumers and to generate a higher profit. We also show that higher fines do not necessarily reduce payment evasion. Finally, we provide empirical evidence which is consistent with our theoretical analysis, using comprehensive micro data on fare dodging on the Zurich Transport Network.

“Consumer Vulnerability at the Bottom of the Pyramid: The Role of Social Relationships and Religiosity as Coping Mechanisms”
Hai Duong T. Mac and Reetika Gupta (ESSEC Business School)

Restricted in resources and with a lack of sufficient control, life at the bottom-of-the-pyramid (BOP) exposes consumers to vulnerability. However, humans, as a highly evolved and sociable species, are capable of finding their way to overcome the odds of the surrounding environment. This paper explores how consumers at the BOP cope with vulnerable situations. Empirical evidence from a sample of 21,920 respondents drawn from 15 countries using a two-level hierarchical linear model highlights the role of social relationships and religiosity in mitigating the negative effects of the BOP macro-environment and alleviating vulnerability. Interestingly, in a non-BOP environment, the moderating impacts are absent confirming the assertion of extant research that consumers in subsistence market place possess different purchase patterns and behaviors in comparison with their counterparts in wealthier settings. These findings offer valuable implications for policy makers working toward poverty alleviation via community building and for marketers aiming to expand to BOP markets.  

“Affect as an Ordinal System of Utility Assessment”
Michel T. Pham (Visiting Professor at INSEAD from Columbia University)

Is the perceived value of things an absolute measurable quantity associated with each object, as in economists’ notion of “cardinal utility,” or a relative assessment of the various objects being evaluated, as in economists’ notion of “ordinal utility”? This paper suggests that the answer depends in part upon which judgment system underlies the evaluation. We propose that the affective system of judgment is inherently more ordinal (less cardinal) than the cognitive system. That is, the affective system is designed to perform evaluations in a manner that is inherently more comparative than the cognitive system, focusing more on the relative ranking of various alternatives rather than their assessment in absolute terms. The inherent ordinality of the affective system may be linked to its distant evolutionary roots. Results from eight studies provide converging support for this general proposition, which helps explain a variety of findings in the judgment and decision-making literature.  

“Managing Luxury Symbolic Inaccessibility: A Study of In-store Dispositif of Power“
 Stéphane Borraz (ESSEC Business School) and Delphine Dion (IAE Paris I)

This research aims at investigating the management of symbolic inaccessibility in luxury stores. Drawing on Foucault’s analysis, we investigate in-store dispositif through which luxury brands discipline and educate consumers. Based on observations in luxury stores, the analyses of blogs, and interviews with managers and clients, we investigate how in-store dispositif operates. We show how they exclude undesired visitors and transform clients into connoisseurs who have the ability to decode luxury meaning and brand codes. We analyze how connoisseurs play with these codes in their interactions with sales assistants. This work highlights the role of in-store dispositif and discusses the implications for branding, retailing, and inconspicuous consumption.

“The Impact of Innovation and Social Interactions on Product Usage”
Paulo Albuquerque (INSEAD)

We investigate the motivations behind product usage in categories characterized by frequent product updates and social interactions between users. The proposed approach builds on theoretical work on experiential products to define consumer utility as a function of intrinsic preferences, social interactions, the match of content with user experience, and future benefits. We empirically test our model using a novel individual data set from the online gaming industry on daily content consumption, product innovation, and group membership. The results show that usage of simpler features is primarily motivated by intrinsic preferences, while group interactions and future benefits of learning about the product are relatively more important to explain consumption of more complex content. We find that an early innovation schedule and lowering content complexity can motivate engagement in initial stages of the product lifecycle, while providing incentives to social interactions is useful to increase content consumption in later stages.

“When Children Derive Happiness from Experiences: A Developmental Investigation of the Role of Memory and Theory of Mind”
Lan Nguyen Chaplin (UIC Business), Tina Lowrey (HEC Paris), Ayalla A. Ruvio (Michigan State), Larry J. Shrum (HEC Paris), Kathleen Vohs (U Minnesota)

Adults view experiences as making them happier than objects (Van Boven 2005), yet products and brands are highly coveted by children, even at young ages. Using a child development framework, we reconcile these two perspectives. Across six studies with 410 children and adolescents ages 3-17 (one cross-sectional study, four experiments, and one longitudinal study), using multiple methods (interviews, collages, experiments, rating scales, reaction time task), we show that children ages 3-12 derive more happiness from objects than from experiences, but that changes over time. As children age, the happiness they derive from experiences increases, to the point that older adolescents derive more happiness from experiences than from objects, consistent with adult findings. We show that these effects are mediated by increases in two cognitive skills: memory and theory of mind, which we posit are necessary for a sufficient comprehension of experiences and their implications, which in turn facilitates enjoyment.

Customer Retention in a Platform World.


Speaker: Barak LIBAI
Professor of Marketing , Arison School of Business, Interdisciplinary Center (IDC) – Herzlya, Israel

14 September 2017 - Room T004 - From 10:30 am to 12:00 pm

Customer Retention in a Platform World.

By Barak Libai
Arison School of Business, Interdisciplinary Center (IDC) – Herzlya, Israel

In recent year marketer’s attention has been drawn to the prominence of customer retention and the need to low churn, in particular of high value customers. Yet this thinking and analysis has largely focused on the case of a single product, while firms had been advised for a while to manage their offerings as platforms that consist of families of products with a common underlying logic. Taking a platform view, when a new product of the same family enters the market, the users of current products may be good candidates for acquisition efforts to the new offering. This raises interesting questions which widen the existing discussion of customer retention. Which customers would the firm want to transfer from current products and when? Would we want to churn the “best customers” of the current product earlier or later? How would considerations of value that stems from purchases (lifetime value) be different value that stems from the effect on others (social value)? We analyze these questions using agent based models, looking in particular at the market for mobile games, where the question of customer transfer among products is of high importance to firms.

Does the Opinion of the Crowd Predict Success? Evidence from Crowdsourcing


Speaker: Anirban MUKHERJEE
Assistant Professor of Marketing , Lee Kong Chian School of Business - Singapore Management University

7 July 2017 - Room T015 - From 10:30 am to 12:00 pm

Does the Opinion of the Crowd Predict Success? Evidence from Crowdsourcing


Anirban Mukherjee
Assistant Professor of Marketing
Lee Kong Chian School of Business, Singapore Management University

Ping Xiao
Assistant Professor of Marketing, Visiting Assistant Professor of Marketing
Business School of the National University of Singapore, NYU Shanghai

Li Wang
Assistant Professor of Marketing
Shanghai University of Finance and Economics

Noshir Contractor
Jane S. & William J. White Professor of Behavioral Sciences
McCormick School of Engineering & Applied Science, the School of Communication and the
Kellogg School of Management at Northwestern University


“Crowdsourcing” is the sourcing of organizational functions from the “crowd”: a large, undefined community of a firm’s consumers, partners, and collaborators. A crucial challenge in crowdsourcing is to determine the quality of crowdsourced submissions. To help screen submissions, crowdsourcing portals use crowdvoting: they ask the community to vote on submissions. Our study investigates the informational role of crowdvoting on design submissions on Threadless, a pioneering crowdsourcing website. We collect and examine a novel, large scale dataset tracking over 150,000 designs, submitted by over 45,000 designers, voted on almost 150 million times, by over 600,000 different users. We focus on two questions. First, what is the conventional wisdom—how does crowdvoting influence Threadless? Second, does the conventional wisdom stand up to scrutiny—does crowdvoting systematically predict commercial success? We document several new empirical findings relating crowdvoting to revenues. We conclude by discussing the implications of our research for designers and firms seeking to ride the crowdsourcing tide.

Keywords: crowdsourcing, crowdvoting, new product development, big data.

Technology and Consumer Behavior


Speaker: Jonathan LEVAV
Associate Professor of Marketing , Stanford Graduate School of Business

12 May 2017 - Room T015 - From 10:30 am to 12:00 pm

Technology and Consumer Behavior

By Jonathan Levav

Electronic devices are assumed to make markets more efficient and to create a distribution channel for market information. These devices and the applications that run them allow people to engage in commercial transactions on the go, to access information from all parts of the globe, and to communicate through voice and video from anywhere. In the series of papers that make up this talk I will show that people's interactions with these devices can evoke psychological processes that influence the judgments and decisions that people make when using them. Specifically, in multiple field and lab studies I examine how the physical interaction with electronic devices influences psychological processes in systematic ways.

Online Streaming and its Effects on Society


Speaker: Hannes DATTA
Assistant Professor - Department of Marketing , Tilburg School of Economics and Business

21 April 2017 - Room T015 - From 10:30 am to 12:00 pm

Online Streaming and its Effects on Society

By Hannes DATTA
Joint work with George Knox and Bart Bronnenberg (both Tilburg University)

Digital streaming is set to take over as the dominant business model in industries like music (e.g., Spotify), movies (e.g., Netflix), books (e.g., Kindle Unlimited), and games (e.g., Steam). Instead of purchasing individual content, streaming allows users to rent access to a vast library of digital content that is free at the margin. Using a panel data set of individual consumers’ listening histories across many platforms, we study how the shift from purchasing to streaming affects society.

Prior work has established that the adoption of online streaming leads to a sizeable effects at the individual level. For example, consumers discover more new content, and tend to favor less popular artists over superstars. However, it is not clear how online streaming affects consumption behavior at the societal level (i.e., across consumers). On the one hand, consumer tastes may become fragmented when choosing among less popular and newer artists. On the other hand, consumer tastes may become more homogenous if recommendation systems and curated playlists on streaming services push users to the same new content.

From a public policy perspective, too much fragmentation is bad news because it can diminish social capital, as fewer people share the same experience. However, too little fragmentation may signal a lack of diversity, favoring superstars and damaging independent labels. We examine several possible drivers of fragmentation, and use our data to test competing explanations.

Valuing Non-Contractual Firms Using Common Customer Metrics


Speaker: Daniel McCarthy
Ph.D. candidate in the Statistics Department , Wharton School of the University of Pennsylvania

3 March 2017 - Room T04 - From 10:30 am to 12:00 pm

Valuing Non-Contractual Firms Using Common Customer Metrics

There is growing interest in the notion of “customer-based corporate valuation,” explicitly tying the value of a firm's customers to the firm's overall financial valuation. While much progress has been made in building a well-validated customer-based valuation model for contractual (or subscription-based) firms, there has been less progress for non-contractual firms (e.g., retail, travel/hospitality, and mobile gaming). Non-contractual businesses have more complex transactional patterns than contractual ones for a variety of reasons, including (1) they are characterized by latent attrition instead of observable churn behavior, (2) they often have irregular purchase incidence timing and spend amounts. These factors make it harder to reconstruct granular purchase behaviors from aggregate data, and to understand what metrics would serve as the best inputs for such a model. Despite this lack of guidance, a number of non-contractual firms regularly report a variety of different aggregate measures to their shareholders (e.g., the number of active users). We use a novel methodology based upon “indirect inference,” a well-established generalization of generalized method-of-moments procedures, to draw a connection between these common aggregate metrics and the underlying parameters of latent variable models for repeat purchasing. We show how the overall predictive validity of the models varies as a function of the combination of metrics used to train the models; this allows us to better understand both how many and which metrics are needed to achieve adequate predictions of future revenues. We apply this methodology to quarterly data from the largest subsidiary of an e-commerce retailer, valuing the subsidiary as a whole, decomposing this valuation into existing and yet-to-be-acquired customers, and analyzing the profitability of newly-acquired customers.