M775 2020 Winter Semester

Marketing Research on E-Commerce

Syllabus [download]

 

Game Theory Fundamental

 

Reference books:

·       Strategies and Games by Prajit Dutta (MIT Press, 1999)

·       Strategy: An Introduction to Game Theory by Joel Watson (W.W.Norton&Company, 3rd edition)

·       Game Theory: A Nontechnical Introduction to the Analysis of Strategy by Roger A McCain (World Scientific, 3rd edition)

·       Notes for Game Theory by Maxwell Stinchcombe

 

Lesson 1:  Introduction and Game Theory Fundamental —Normal form game models

Readings (papers with * are required readings)

·       Part II of Strategy: An Introduction to Game Theory, by Joel Watson

·       * Leeflang, P. S. H. and D. R. Wittink (2000), “Building Models for Marketing Decisions: Past, Present, Future,” International Journal of Research in Marketing, 17 (2-3), 105-126.

·       Gibbons, Robert (1997), “An Introduction to Applicable Game Theory,” The Journal of Economic Perspectives, 11(1), 127-149.

·       Moorthy, K.S. (1993), “Theoretical Modeling in Marketing,” Journal of Marketing, 57(2), 92-106.

·       Maskin, E., & Tirole, J. (1988). A theory of dynamic oligopoly, II: Price competition, kinked demand curves, and Edgeworth cycles. Econometrica: Journal of the Econometric Society, 571-599.

·       * Chiappori, P. A., Levitt, S., & Groseclose, T. (2002). Testing mixed-strategy equilibria when players are heterogeneous: The case of penalty kicks in soccer. American Economic Review, 92(4), 1138-1151. 

[Assignment 1]

 

Lesson 2:  Game Theory Fundamental — Extensive Form Games

o   The importance of timing and information set

o   Incredible thereat   (to introduce SGPN)

o   Stackelberg game vs. Nash games (channel and competition)

o   Multi-period games (sequential search)

Readings: 

·       Part III of Strategy: An Introduction to Game Theory, Joel Watson

·       Cai, G. G. (2010). Channel selection and coordination in dual-channel supply chains. Journal of Retailing86(1), 22-36

·       Ingene, C. A., & Parry, M. E. (1995). Channel coordination when retailers compete. Marketing Science14(4), 360-377.

·       Dana Jr, J. D. (1994). Learning in an equilibrium search model. International Economic Review, 745-771.

Assignment 2:

 

Lesson 3: Game Theory Fundamental — The role of Information

o   Incomplete information  (expected utility, risk averseness, ambiguity, PBE)

o   Information asymmetry (Lemon market)

o   Information asymmetry (Signaling game)

o   Information asymmetry (principle-agent, mechanism design)

Readings: 

·       * Chapters 25, 27 of Strategy: An Introduction to Game Theory, Joel Watson

·       * Kirmani, A., & Rao, A. R. (2000). No pain, no gain: A critical review of the literature on signaling unobservable product quality. Journal of marketing64(2), 66-79.

·       Deneckere, R. J., & Preston McAfee, R. (1996). Damaged goods. Journal of Economics & Management Strategy5(2), 149-174.

Assignment 3:

 

Lesson 4: Game Theory Fundamental — Consumer behavior and marketing strategies

o   Shopping preferences (horizontal vs. vertical differentiation)

o   Bundling strategy

o   Sequential decision models: infinitely repeated game

o   Procrastination

o   Influence (Bayesian persuasion)

Readings: 

·       * Deneckere, Raymond J., and R. Preston McAfee. "Damaged goods." Journal of Economics & Management Strategy 5.2 (1996): 149-174.

·       * Thomadsen, R. (2007). Product positioning and competition: The role of location in the fast food industry. Marketing Science, 26(6), 792-804.

·       Li, J., Granados, N., & Netessine, S. (2014). Are consumers strategic? Structural estimation from the air-travel industry. Management Science, 60(9), 2114-2137.

·       Liu, H. (2010). Dynamics of pricing in the video game console market: skimming or penetration?. Journal of marketing research, 47(3), 428-443.

·       Özer, Ö., & Zheng, Y. (2016). Markdown or everyday low price? The role of behavioral motives. Management Science, 62(2), 326-346.

·       * O'Donoghue, T., & Rabin, M. (1999). Doing it now or later. American Economic Review89(1), 103-124.

·       * DellaVigna, S., & Malmendier, U. (2006). Paying not to go to the gym. American Economic Review96(3), 694-719.

·       Nunes, J. C., & Drèze, X. (2006). The endowed progress effect: How artificial advancement increases effort. Journal of Consumer Research32(4), 504-512.

·       Adams, W. J., & Yellen, J. L. (1976). Commodity bundling and the burden of monopoly. The quarterly journal of economics, 475-498.

 

Marketing Research on E-Commerce:

 

Lesson 5: Online Channel

o   Role of online direct channel — Channel conflicts and channel coordination

o   Omnichannel Retailing

o   Marketing Mix in omnichannel

Readings: 

              Role of online channel:

·       Brynjolfsson, E., & Smith, M. D. (2000). Frictionless commerce? A comparison of Internet and conventional retailers. Management science, 46(4), 563-585.

·       *  Forman, C., Ghose, A., & Goldfarb, A. (2009). Competition between local and electronic markets: How the benefit of buying online depends on where you live. Management science, 55(1), 47-57.

·       * Chintagunta, P. K., Chu, J., & Cebollada, J. (2012). Quantifying transaction costs in online/off-line grocery channel choice. Marketing Science, 31(1), 96-114.

·       Balasubramanian, S. (1998). Mail versus mall: A strategic analysis of competition between direct marketers and conventional retailers. Marketing Science, 17(3), 181-195.

·       Chiang, W. Y. K., Chhajed, D., & Hess, J. D. (2003). Direct marketing, indirect profits: A strategic analysis of dual-channel supply-chain design. Management science, 49(1), 1-20.

·       Tsay, A. A., & Agrawal, N. (2004). Channel conflict and coordination in the e?commerce age. Production and operations management, 13(1), 93-110.

·       Liu, Y., Gupta, S., & Zhang, Z. J. (2006). Note on self-restraint as an online entry-deterrence strategy. Management Science, 52(11), 1799-1809.

Omnichannel:

·       * Verhoef, P. C., Kannan, P. K., & Inman, J. J. (2015). From multi-channel retailing to omni-channel retailing: introduction to the special issue on multi-channel retailing. Journal of retailing, 91(2), 174-181.

·       * Kuksov, D., & Liao, C. (2018). When showrooming increases retailer profit. Journal of Marketing Research, 55(4), 459-473.

·       Jing, B. (2018). Showrooming and webrooming: Information externalities between online and offline sellers. Marketing Science, 37(3), 469-483.

·       * Mehra, A., Kumar, S., & Raju, J. S. (2018). Competitive strategies for brick-and-mortar stores to counter “showrooming”. Management Science, 64(7), 3076-3090.

·        Gao, F., & Su, X. (2017). Omnichannel retail operations with buy-online-and-pick-up-in-store. Management Science, 63(8), 2478-2492.

·       Gao, F., & Su, X. (2018). Omnichannel service operations with online and offline self-order technologies. Management Science, 64(8), 3595-3608.

·       Fisher, M. L., Gallino, S., & Xu, J. J. (2019). The value of rapid delivery in omnichannel retailing. Journal of Marketing Research, 56(5), 732-748.

·       * Bell, D. R., Gallino, S., & Moreno, A. (2018). Offline showrooms in omnichannel retail: Demand and operational benefits. Management Science, 64(4), 1629-1651.

·       Gallino, S., Moreno, A., & Stamatopoulos, I. (2017). Channel integration, sales dispersion, and inventory management. Management Science, 63(9), 2813-2831.

·       * Gallino, S., & Moreno, A. (2014). Integration of online and offline channels in retail: The impact of sharing reliable inventory availability information. Management Science, 60(6), 1434-1451.

·       Kushwaha, T., & Shankar, V. (2013). Are multichannel customers really more valuable? The moderating role of product category characteristics. Journal of Marketing, 77(4), 67-85.

·       Avery, J., Steenburgh, T. J., Deighton, J., & Caravella, M. (2012). Adding bricks to clicks: Predicting the patterns of cross-channel elasticities over time. Journal of Marketing, 76(3), 96-111.

Marketing Mix in Multichannel Retailing

·       Ofek, E., Katona, Z., & Sarvary, M. (2011). “Bricks and clicks”: The impact of product returns on the strategies of multichannel retailers. Marketing Science, 30(1), 42-60.

·       Yan, R. (2010). Cooperative advertising, pricing strategy and firm performance in the e-marketing age. Journal of the academy of marketing science, 38(4), 510-519.

·       Zhang, X. (2009). Retailers' multichannel and price advertising strategies. Marketing Science, 28(6), 1080-1094.

·       Bower, A. B., & Maxham III, J. G. (2012). Return shipping policies of online retailers: normative assumptions and the long-term consequences of fee and free returns. Journal of Marketing, 76(5), 110-124.

 

Lesson 6: Pricing

o   Pricing-Related Business Models

§  Auction

§  Name your Price / Pay what you want

§  Groupbuying

§  Crowdfunding

o   Pricing Practices

§  Bundling

§  Subscription

§  Price Match

§  Others

 

Readings: 

Auction

·       Park, Y. H., & Wang, X. (2009). 19 Online and name-your-own-price auctions: a literature review. Handbook of Pricing Research in Marketing, 419.

·       * Lu, Y., Gupta, A., Ketter, W., & Van Heck, E. (2019). Dynamic decision making in sequential business-to-business auctions: A structural econometric approach. Management Science65(8), 3853-3876.

Name Your Price and Pay what you want

·       * Kim, J. Y., Natter, M., & Spann, M. (2009). Pay what you want: A new participative pricing mechanism. Journal of Marketing73(1), 44-58.

·       Wang, T., Gal-Or, E., & Chatterjee, R. (2009). The name-your-own-price channel in the travel industry: An analytical exploration. Management Science55(6), 968-979.

Group buying

·       Anand, K. S., & Aron, R. (2003). Group buying on the web: A comparison of price-discovery mechanisms. Management Science49(11), 1546-1562.

·       Jing, X., & Xie, J. (2011). Group buying: A new mechanism for selling through social interactions. Management science57(8), 1354-1372.

·       Hu, M., Shi, M., & Wu, J. (2013). Simultaneous vs. sequential group-buying mechanisms. Management Science59(12), 2805-2822.

·       Li, H., Shen, Q., & Bart, Y. (2018). Local market characteristics and online-to-offline commerce: An empirical analysis of Groupon. Management Science64(4), 1860-1878.

Crowdfunding

·       * Hu, M., Li, X., & Shi, M. (2015). Product and pricing decisions in crowdfunding.  Marketing Science34(3), 331-345.

Bundling

·       Bakos, Yannis, and Erik Brynjolfsson. "Bundling information goods: Pricing, profits, and efficiency." Management science 45.12 (1999): 1613-1630.

·       * Elberse, A. (2010). Bye-bye bundles: The unbundling of music in digital channels. Journal of Marketing74(3), 107-123.

·       Khan, U., & Dhar, R. (2010). Price-framing effects on the purchase of hedonic and utilitarian bundles. Journal of Marketing Research47(6), 1090-1099.

·       Chen, Y., & Zhang, T. (2015). Interpersonal bundling. Management Science61(6), 1456-1471.

Subscription

·       McCarthy, D. M., Fader, P. S., & Hardie, B. G. (2017). Valuing subscription-based businesses using publicly disclosed customer data. Journal of Marketing81(1), 17-35.

·       * Kanuri, V. K., Mantrala, M. K., & Thorson, E. (2017). Optimizing a menu of multiformat subscription plans for ad-supported media platforms. Journal of Marketing81(2), 45-63.

·       Kanuri, V. K., & Andrews, M. (2019). The Unintended Consequence of Price-Based Service Recovery Incentives. Journal of Marketing83(5), 57-77.

Price matching

·       Chen, Y., Narasimhan, C., & Zhang, Z. J. (2001). Consumer heterogeneity and competitive price-matching guarantees. Marketing Science20(3), 300-314.

·       * Bulow, J., & Levin, J. (2006). Matching and price competition. American Economic Review, 96(3), 652-668.

·       Moorthy, S., & Zhang, X. (2006). Price matching by vertically differentiated retailers: Theory and evidence. Journal of Marketing Research43(2), 156-167.

·       Kireyev, P., Kumar, V., & Ofek, E. (2017). Match your own price? Self-matching as a retailer’s multichannel pricing strategy. Marketing Science36(6), 908-930.

Others

·       Spann, M., Fischer, M., & Tellis, G. J. (2015). Skimming or penetration? Strategic dynamic pricing for new products. Marketing Science34(2), 235-249.

·       Kumar, V., & Rajan, B. (2012). Social coupons as a marketing strategy: a multifaceted perspective. Journal of the Academy of Marketing Science40(1), 120-136.

·       Subramanian, U., & Rao, R. C. (2016). Leveraging experienced consumers to attract new consumers: An equilibrium analysis of displaying deal sales by daily deal websites. Management Science62(12), 3555-3575.

·       Pattabhiramaiah, A., Sriram, S., & Manchanda, P. (2019). Paywalls: Monetizing online content. Journal of Marketing83(2), 19-36.

 

Lesson 7: Advertising

o   Target Advertising

o   Search Engine Advertising

o   Social Media Advertising

o   Others

Readings: 

Target Advertising

·       * Iyer, G., Soberman, D., & Villas-Boas, J. M. (2005). The targeting of advertising. Marketing Science, 24(3), 461-476.

·       * Goldfarb, A., & Tucker, C. (2011). Online display advertising: Targeting and obtrusiveness. Marketing Science30(3), 389-404.

Search Engine Advertising

·        Yao, S., & Mela, C. F. (2011). A dynamic model of sponsored search advertising. Marketing Science, 30(3), 447-468.

·       Goldfarb, A., & Tucker, C. (2011). Search engine advertising: Channel substitution when pricing ads to context. Management Science57(3), 458-470.

·       Hu, Y., Shin, J., & Tang, Z. (2016). Incentive problems in performance-based online advertising pricing: cost per click vs. cost per action. Management Science62(7), 2022-2038.

·       Chen, Y., & Yao, S. (2017). Sequential search with refinement: Model and application with click-stream data. Management Science, 63(12), 4345-4365.

Social Media Advertising

·       De Vries, L., Gensler, S., & Leeflang, P. S. (2017). Effects of traditional advertising and social messages on brand-building metrics and customer acquisition. Journal of Marketing81(5), 1-15.

·       Lambrecht, A., Tucker, C., & Wiertz, C. (2018). Advertising to early trend propagators: Evidence from Twitter. Marketing Science, 37(2), 177-199.

·       Ghose, A., Ipeirotis, P. G., & Li, B. (2019). Modeling consumer footprints on search engines: An interplay with social media. Management Science65(3), 1363-1385.

Other Advertising research

·       Athey, S., Calvano, E., & Gans, J. S. (2018). The impact of consumer multi-homing on advertising markets and media competition. Management Science, 64(4), 1574-1590.

·       * Sahni, N. S. (2016). Advertising spillovers: Evidence from online field experiments and implications for returns on advertising. Journal of Marketing Research53(4), 459-478.

·       Lambrecht, A., & Tucker, C. (2019). Algorithmic bias? an empirical study of apparent gender-based discrimination in the display of stem career ads. Management Science65(7), 2966-2981.

 

Lesson 8: Online Reviews, Word-of-Mouth, and User-Generated-Contents

o   Business Value

o   Virality

o   Truthfulness

Readings: 

Value:

·       *Godes, D., & Mayzlin, D. (2004). Using online conversations to study word-of-mouth communication. Marketing science, 23(4), 545-560.

·       *Chevalier, J. A., & Mayzlin, D. (2006). The effect of word of mouth on sales: Online book reviews. Journal of marketing research, 43(3), 345-354.

·       Liu, Y. (2006). Word of mouth for movies: Its dynamics and impact on box office revenue. Journal of marketing, 70(3), 74-89.

·       Trusov, M., Bucklin, R. E., & Pauwels, K. (2009). Effects of word-of-mouth versus traditional marketing: findings from an internet social networking site. Journal of marketing, 73(5), 90-102.

·       Zhu, F., & Zhang, X. (2010). Impact of online consumer reviews on sales: The moderating role of product and consumer characteristics. Journal of marketing, 74(2), 133-148.

·       Berger, J., & Schwartz, E. M. (2011). What drives immediate and ongoing word of mouth?. Journal of Marketing Research, 48(5), 869-880.

·       Babić Rosario, A., Sotgiu, F., De Valck, K., & Bijmolt, T. H. (2016). The effect of electronic word of mouth on sales: A meta-analytic review of platform, product, and metric factors. Journal of Marketing Research, 53(3), 297-318.

·       *Chevalier, J. A., Dover, Y., & Mayzlin, D. (2018). Channels of Impact: User reviews when quality is dynamic and managers respond. Marketing Science, 37(5), 688-709.

Virality:

·       Berger, J., & Milkman, K. L. (2012). What makes online content viral?. Journal of marketing research, 49(2), 192-205.

·       Akpinar, E., & Berger, J. (2017). Valuable virality. Journal of Marketing Research, 54(2), 318-330.

Truthfulness:

·       Mayzlin, D., Dover, Y., & Chevalier, J. (2014). Promotional reviews: An empirical investigation of online review manipulation. American Economic Review, 104(8), 2421-55.

·       Luca, M., & Zervas, G. (2016). Fake it till you make it: Reputation, competition, and Yelp review fraud. Management Science, 62(12), 3412-3427.

·       Vosoughi, S., Roy, D., & Aral, S. (2018). The spread of true and false news online. Marketing Science359(6380), 1146-1151.

 

Lesson 9: Two-Sided Platform and Sharing Economy

Readings: 

·       *Armstrong, M. (2006). Competition in two‐sided markets. The RAND Journal of Economics, 37(3), 668-691.

·       Achrol, R. S., & Kotler, P. (1999). Marketing in the network economy. Journal of marketing, 63(4_suppl1), 146-163.

·       Sridhar, S., Mantrala, M. K., Naik, P. A., & Thorson, E. (2011). Dynamic marketing budgeting for platform firms: Theory, evidence, and application. Journal of Marketing Research, 48(6), 929-943.

·       *Landsman, V., & Stremersch, S. (2011). Multihoming in two-sided markets: An empirical inquiry in the video game console industry. Journal of Marketing, 75(6), 39-54.

·       Albuquerque, P., Pavlidis, P., Chatow, U., Chen, K. Y., & Jamal, Z. (2012). Evaluating promotional activities in an online two-sided market of user-generated content. Marketing Science, 31(3), 406-432.

·       Bhargava, H. K., & Rubel, O. (2019). Sales Force Compensation Design for Two-Sided Market Platforms. Journal of Marketing Research, 56(4), 666-678.

·       *Lin, S. (2020). Two-sided price discrimination by media platforms. Marketing Science.