Breaking the Cycle: How the News and Markets Created a Negative Feedback Loop in COVID-19
New research from CBS Professor Harry Mamaysky reveals how negativity in the news and markets can escalate a financial crisis.
New research from CBS Professor Harry Mamaysky reveals how negativity in the news and markets can escalate a financial crisis.
Adapted from “Global Value Chains in Developing Countries: A Relational Perspective from Coffee and Garments,” by Laura Boudreau of Columbia Business School, Julia Cajal Grossi of the Geneva Graduate Institute, and Rocco Macchiavello of the London School of Economics.
Adapted from “Online Advertising as Passive Search,” by Raluca M. Ursu of New York University Stern School of Business, Andrey Simonov of Columbia Business School, and Eunkyung An of New York University Stern School of Business.
This paper from Columbia Business School, “Meaning of Manual Labor Impedes Consumer Adoption of Autonomous Products,” explores marketing solutions to some consumers’ resistance towards autonomous products. The study was co-authored by Emanuel de Bellis of the University of St. Gallen, Gita Johar of Columbia Business School, and Nicola Poletti of Cada.
Co-authored by John B. Donaldson of Columbia Business School, “The Macroeconomics of Stakeholder Equilibria,” proposes a model for a purely private, mutually beneficial financial agreement between worker and firm that keeps decision-making in the hands of stockholders while improving the employment contract for employees.
At Columbia Business School, our faculty members are at the forefront of research in their respective fields, offering innovative ideas that directly impact the practice of business today. A quick glance at our publication on faculty research, CBS Insights, will give you a sense of the breadth and immediacy of the insight our professors provide.
As a student at the School, this will greatly enrich your education. In Columbia classrooms, you are at the cutting-edge of industry, studying the practices that others will later adopt and teach. As any business leader will tell you, in a competitive environment, being first puts you at a distinct advantage over your peers. Learn economic development from Ray Fisman, the Lambert Family Professor of Social Enterprise and a rising star in the field, or real estate from Chris Mayer, the Paul Milstein Professor of Real Estate, a renowned expert and frequent commentator on complex housing issues. This way, when you complete your degree, you'll be set up to succeed.
Columbia Business School in conjunction with the Office of the Dean provides its faculty, PhD students, and other research staff with resources and cutting edge tools and technology to help push the boundaries of business research.
Specifically, our goal is to seamlessly help faculty set up and execute their research programs. This includes, but is not limited to:
All these activities help to facilitate and streamline faculty research, and that of the doctoral students working with them.
The authors discuss the long-run future of decision support systems in marketing. They argue that a growing proportion of marketing decisions can not only be supported but may also be automated. From a standpoint of both efficiency (e.g., management productivity) and effectiveness (e.g., resource allocation decisions), such automation is highly desirable. The authors describe how model-based automated decision-making is likely to penetrate various marketing decision-making environments and how such models can incorporate competitive dynamics.
A commentary on Barbara E. Kahn's article, Dynamic Relationships with Customers: High-Variety Strategies, published in the winter 1998 issue of Journal of the Academy of Marketing Sciences is provided. The purpose is to question Kahn's assumptions and hence to suggest some implications for research.
This article proposes a method that overcomes a number of problems associated with new product diffusion models noted in the marketing literature. We illustrate the methodology in the context of better understanding global variances in new product adoption. Building on existing diffusion models and sample matching principles from international consumer research, we suggest a "staged estimation procedure." The procedure provides both sensible and robust estimates and remains usable even if the diffusion process is in its earliest stage in most or all countries.
Marketers are making increasing use of very brief messages that mention just a brand name or a brand name with a short headline, as in event sponsorship and program endorsements. There has been debate over the effectiveness of these "advertising fragments." This paper introduces an approach for controlled testing of the effects of advertising fragments. Using a reaction-time based procedure, we show that a key effect of advertising fragments is to revive established brand associations, even though these associations are not explicitly communicated.
Effective communication requires that consumers attribute the message content to its intended source. The proposed framework distinguishes four types of source identification processes-cued retrieval, memory-trace refreshment, schematic inferencing, and pure guessing-and delineates their contingencies. Two experiments examine portions of the framework, and experiment 2 introduces a new methodology for decomposing multiple processes. Findings suggest that when cued retrieval fails, consumers try to refresh the original memory trace for the learning episode-a process that is effortful.
Effective communication requires that consumers attribute the message content to its intended source. The proposed framework distinguishes four types of source identification processes-cued retrieval, memory-trace refreshment, schematic inferencing, and pure guessing-and delineates their contingencies. Two experiments examine portions of the framework, and experiment 2 introduces a new methodology for decomposing multiple processes. Findings suggest that when cued retrieval fails, consumers try to refresh the original memory trace for the learning episode-a process that is effortful.
Global brands represent enormous cash-producing assets. To build them requires consistency over time and across country borders. The key for developing consistent strategy across country borders is identifying the global segment and the global position. The key for implementing that strategy is often the global marketing team.
A study examines the long-term effects of promotion and advertising on consumers' brand choice behavior. Some 8 1/4 years of panel data for frequently purchased packaged goods are used to address 2 questions: 1. Do consumers' responses to marketing mix variables, such as price, change over a long period of time? 2. If yes, are these changes associated with changes in manufacturers' advertising and retailers' promotional policies? Using these results, implications for manufactures' pricing, advertising and promotion policies are drawn.
This paper presents an applied methodology to assist managers in strategically setting prices and allocating resources over the product, brand, or adoption (diffusion) life cycle. While substantial theoretical work has been achieved in this area in the management science and operations research disciplines, approaches which can be implemented as managerial tools are generally lacking.
Selling information that is later used in decision making constitutes an increasingly important business in modem economies (Jensen 1991). Information is sold under a large variety of forms: industry reports, consulting services, database access, and/or professional opinions given by medical, engineering, accounting/ financial, and legal professionals, among others.
This paper presents a stochastic multidimensional unfolding (MDU) procedure to spatially represent individual differences in phased or sequential decision processes. The specific application or scenario to be discussed involves the area of consumer psychology where consumers form judgments sequentially in their awareness, consideration, and choice set compositions in a phased or sequential manner as more information about the alternative brands in a designated product/service class are collected.
A popular prediction in persuasion research is that decreased ability to process information increases reliance on peripheral cues and decreases reliance on central claims. This paper explains why this prediction does not necessarily hold when processing capacity is impaired by high arousal. Three experiments suggest that two types of processes underlie arousal effects on persuasion. Arousal induces selective processing of cues that are diagnostic at the expense of cues that are nondiagnostic - the selection effect.
Classical economic theory mainly examines decision making from a normative perspective. Social and cognitive psychology's view of decision making is more descriptive. This article presents a structured synthesis of a third stream of research, which intersects economics and psyhology, and is known as Behavioral Decision Theory. This stream of research shows that decision makers often deviate from prescritive norms. This article explains why such deviations occur and what they imply for marketing.
We examine conditions under which "Veblen effects" arise from the desire to achieve social status by signaling wealth through conspicuous consumption. While Veblen effects cannot ordinarily arise when preferences satisfy a "single-crossing property," they may emerge when this property fails. In that case, "budget" brands are priced at marginal cost, while "luxury" brands, though not intrinsically superior, are sold at higher prices to consumers seeking to advertise wealth.
This study proposes a typology of reasons why people substantially delay important consumer decisions The delay reasons we study are drawn from delay typologies identified in other contexts as well as from the product diffusion literature. Two studies reported here examine why subjects delay consumer decisions. These support most of the reasons in the proposed typology, while some unanticipated delay reasons also emerge.
This paper attempts to find characteristics of product categories, brands, and ad copy that lead to either increased or decreased effectiveness of advertising spending on ad awareness, brand awareness, or purchase intentions, as measured through tracking data.
The authors describe a model of the effects of advertised and observed quality on consumer expectations about new product quality. They test the model using data from two computer-controlled shopping experiments. In both studies, quadratic and gamma specifications for the effect of advertising claim discrepancy on expectation change fit better than a linear model. Furthermore, the adaptive expectations framework describes the updating of consumer expectations when the consumer observes the quality of the new product.
Bundling of products is very prevalent in the marketplace. For example, travel packages include airfare, lodging, and a rental car. Considerable economic research has focused on the change in profits and consumer surplus that ensues if bundles are offered. There is relatively little research in marketing that deals with bundling, however. In this article we concentrate on some tactical issues of bundling, such as which types of products should be bundled, what price one can charge for the bundle, and how the price of the bundle should be presented to consumers to improve purchase intent.
This paper seeks to establish a parametric linkage between fuzzy set theoretic techniques and commonly used preference formation rules in psychology and marketing. Such a linkage helps to benefit both fields. We accomplish this objective by using a linear model with interaction term which nests many common preference protocols; conjunction (fuzzy and), disjunction (fuzzy or), counterbalance (fuzzy xor) and linear compensatory.
A decade of work in marketing meta-analysis has produced empirical generalizations concerning parameters in models of advertising, price, diffusion, and consumer behavior. Results from these meta-analyses should replace the now discredited zero null hypotheses of such parameters in future work. Probably more important than nonzero "grand mean" average effects is an approach called Parametric Adjustability, which provides estimated parameter values for specific conditions reflecting markets and research technologies.
This goal of this paper is to establish a research agenda that will lead to a stream of research that closes the gap between actual and normative strategic managerial decision making. We start by distinguishing strategic managerial decision making (choices) from other choices. Next, we propose a conceptual model of how managers make strategic decisions that is consistent with the observed gap between actual and normative decision making.
The authors examine how new brand entries affect consumers' consideration sets. A within-subject longitudinal experiment examines several entry positions into existing markets. The results suggest that new brand entries produce changes in consideration sets toward dominating, compromise, and assimilated brands, away from extreme brands in two-brand markets, and toward dominating and away from extreme brands in eight-brand markets. These results are confirmed by a second experiment that utilizes a between-subject design and markets with six existing brands.
The widespread belief in the intuitive relationship between quality, customer satisfaction and economic returns, as well as the growing frustration with attempts to improve quality, serve to underscore the importance of analytical and empirical work increasing understanding of customer satisfaction and how it relates to economic returns. Firms that actually achieve high customer satisfaction also enjoy superior economic returns.
In this study we investigate several hypotheses relating strategic forecasting to market segment selection and firm performance. In the context of a strategic marketing simulation, subjects in 14 competitive industries made strategic forecasts for market segment size and benchmark prices.
This study examines how advertising budget setting, framed as a prisoner's dilemma, is affected by information on the competitive situation and characteristics of the decision maker. Hypotheses are tested using experiments in which subjects set advertising budgets. Results indicate that subjects were generally competitive, but also based their strategy selections on what they expected their opponents to do, what their opponents did last time, whether the competitive relationship was expected to continue, market shares, and whether the subject's profit objectives were short- or long-term.
Affluent investor mutual fund decisions are probed. Several different investor profiles are developed from data on approximately 300 affluent investors. These investor types differ in sources of information regarding mutual fund investments, particularly the use of financial advisers, and in the selection criteria employed for mutual fund purchases. In addition, they have distinguishable mutual fund behavior and demographic characteristics. Specific implications for financial services firms are developed.
International differences in general, and cultural differences in particular, exert profound influence on what people buy. In modeling market response, highly visible international differences in purchase behavior seem to lead to an assumption by management scientists that there are large parallel international differences in market response to such things as price and advertising.
This research proposes that negotiators consider each other's payoffs in their evaluation of potential settlements beyond the level necessary to maintain the bargaining relationship. We further hypothesize that the way in which negotiators weight their opponents' payoffs, relative to their own, is a function of characteristics of the relationship and of the bargainers' personalities. Specifically, we consider liking of the other party, payoff expectations, satisfaction with past settlements, the likelihood of future negotiations, egocentricity, and power orientation.
This paper examines the attributes that consumers use when making product similarity judgments and their effect on similarity scaling. Previous research suggests that concrete brands are judged using dichotomous features while more abstract product categories are judged using continuous dimensions. This, in turn, suggests that the appropriateness of spatial scaling increases relative to tree scaling as one moves from brands to product categories. The results of two studies support an increase in the fit of spaces relative to trees from brands to categories.
The authors first attempt to clarify the affect terminology. Then, in an empirical study, they explore the affective reactions prompted by a wide range of consumption situations. For each of them, the authors investigate what preceeds, what happens during and what happens after the situation. 1,436 affective experiences, retrieved by 118 subjects in response to the proposed situations, were content-analyzed. The subjects reported more positive than negative affective reactions. These were essentially feelings, followed by evaluative affects.
This article proposes a model that nests both a strict tree model and the Luce choice model. The multiplicative formulation allows for easy estimation using least-squares procedures. The model is shown to be more parsimonious than the hierarchical elimination method and in a small illustration, to significantly out-perform Luce in predicting soft-drink preferences.
In this paper we propose a model for describing consumer decision making among assortments or menus of options from which a single option will be chosen at a later time. Central to the derivation of the model is an assumption that consumers are uncertain about their future preferences. The model captures both the utility of the items within the assortments as well as the flexibility the items offer as a group. We support our model empirically with two laboratory experiments. In the first experiment we test the underlying assumptions.
A conceptual model is developed that describes the relationships among consumer values, utility, and ownership of durables. These relationships are tested empirically using data on a variety of discretionary durables collected from a sample of 735 adults. Results support the model structure and suggest that augmenting the List of Values (Kahle 1983) with a measure of materialism improves prediction of value-related consumer behavior.
Similarity scaling often requires subjects to produce such a large number of judgments that fatigue may become a problem. Yet it remains unclear just how respondent fatigue affects similarity perceptions and resulting judgments. The present study uses a categorization perspective to examine the effects of fatigue on similarity judgments. The results suggest that subjects rely increasingly on category membership as they progress through a similarity judgment task.
Meta-analysis has become a popular approach for studying systematic variation in parameter estimates across studies. This article discusses the use of meta-analysis results as prior information in a new study. Although hierarchical prior distributions in a traditional Bayesian framework are characterized by complete exchangeability, meta-analysis priors explicitly incorporate heterogeneity in prior vectors.
This article presents an exploratory investigation into longitudinal patterns of influence in group decision-making. In particular, we focus on how the outcomes of past decisions affect group members' relative influence in future joint decisions. Results suggest that past outcomes play an important role in the resolution of disagreements when group member preferences are equally intense. Losers in prior decisions are likely to win in the future (and vice versa) due to what appears to be promotion of equity in the group.
A central assumption of meta-analysis is that the sample of studies fairly represents all work done in the field, published and unpublished. However, if studies with "poor" results are less likely to be published, a potential publication bias is present. The authors propose a maximum likelihood approach to estimating publication bias for the situation in which censorship based on effect size may occur. An explicit hypothesis test is provided for testing whether or not censorship is present.
The ultimate success of new product R&D depends as much on customer acceptance as on technological breakthroughs. In this article, Susan Holak and Donald Lehmann focus on customer acceptance by exploring the manner in which the general attributes of Rogers (relative advantage, compatibility, complexity, divisibility and communicability) plus perceived risk combine to form the intention to buy an innovation. Results demonstrate a causal structure among these attributes and lead to various implications for R&D guidelines and product design.
Cet article s'articule le long de trois thèmes progressant de la nécessité d'étudier en marketing les reactions affectives jusqu'á une mise en evidence des spécificités de leurs mesures.
The article focuses on the authors' comments on marketing of consumer information. Authors are somewhat distressed as their original article was severely misinterpreted by researcher Dan Sarel. Two main criticisms of the authors' model and methodology offered by Sarel are that the methodology cannot produce useful guidelines for three reasons: the criteria used in the methodology are inappropriate, the product is of a special nature and other important considerations have been omitted.
The recent appearance and growth of new delivery systems for dental services is examined from a marketing perspective. Analysis reveals that the growth of low priced, high throughput operations is consistent not only with marketing principles, but with the development of American retail institutions in general. Options for independent dentists in the face of this new competitive environment are discussed.
Reviews several books on marketing. "Cases in Public and Nonprofit Marketing," by Christopher H. Lovelock and Charles B. Weinberg; "Marketing for Nonprofit Organization," by Philiph Kotler; "Marketing for Nonprofit Organization," David L. Rados.
Consumer information programs can be more effective if they are conceived within a marketing framework which views consumer information as a product to be marketed. A methodology is outlined which can assist consumer information program developers in identifying information needs from the consumer's point of view, rather than the policy maker's.
Examines the impact of message to direct mail response on sales. Discussions on the Bales interaction process analysis; Analysis of variance; Correlation between the intention to purchase to attitude towards the magazine.
The purpose of this paper is to study consumer information processing within the context of attitude formation and change. Examination of the cognitive rules used by consumers in manipulating information presented in a persuasive communication seems quite relevant to understanding the impact of such communications. Persuasive communications can be viewed as presenting data to the consumer, who then manipulates and combines those data in the process of forming or changing an attitude.
During the past several years, one of the more intensively studied areas in marketing and consumer research has been multi-attribute models of attitude [36]. The basic proposition of these models is that consumers form attitudes toward products on the basis of product attributes, a formulation which has considerable implications for marketing strategies.
In a field experiment three salesman employed six alternative messages in attempting to sell a magazine subscription to student subjects randomly selected from the registrar's listing at a major university. Three conversational and three nonconversational messages, developed from Bales's Interaction Process Analysis, were employed in a telephone selling paradigm, designed to minimize extraneous nonverbal communication. Each salesman contacted prospective subjects (n = 78, 73, 118) until he had completed 42 sales attempts, 7 per message, for which a postquestionnaire was administered.