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Selected recent publications in the top management and economics journals

A Model of Product Portfolio Design: Guiding Consumer Search through Brand Positioning

( KE, T. Tony | KE, T. Tony | YU, Jungju )



Beyond real functional differences, brand positioning can have profound effects on the purchase decisions of consumers. Using a product-portfolio and consumer search framework, we provide a micro-foundation for why and how brand positioning can deliver credible information to consumers. Consumers form their perceptions of a brand from various interactions with all products under the same brand. We conceptualize brand positioning as the average location of a brand's products on a Hotelling-line. When consumers conduct their search for product matches, they are guided by how brands are positioned in the market. We show that niche brands naturally convey more information than mainstream brands. A firm with a mainstream brand has incentives to opportunistically dilute its brand by offering a wide range of products. A niche brand may arise as an equilibrium even in a monopolistic market because it serves as a commitment device for no dilution.

Ask for Reviews at The Right Time: Evidence from Two Field Experiments

( Jung, Miyeon | Ryu, Sunghan | Han, Sang Pil | Cho, Daegon )



This study examines how the timing of review reminders affects the likelihood and quality of product review postings. The authors postulate that review reminders have two distinct effects, depending on the delivery timing. On the one hand, reminders of review posting given immediately or shortly after a product experience may threaten a consumer's freedom and prompt an adverse reaction. On the other hand, as time after the product experience passes, it may be advantageous to revive memories of review posting using delayed review reminders. To evaluate the effect of review reminders, they conducted two randomized field experiments. The findings show that immediate reminders reduce the chance of review postings relative to a randomized immediate control group who did not receive a reminder, consistent with the notion that the reactance induced by the violation of freedom due to instant review reminders outweighs the benefit of memory recall. Conversely, delayed reminders significantly increase the likelihood of review posting compared to a randomized delayed control, suggesting that the memory recall benefit surpasses reactance. However, the timing of review reminders has little effect on review content. The study contributes to the literature on the temporal effects of marketing activities and provides practical advice for online marketplaces to collect more product reviews.

Positive Demand Spillover of Popular App Adoption: Implications for Platform Owners' Management of Complements

( Lee, Mi Hyun | Han, Sang Pil | Park, Sungho | Oh, Wonseok )



As platform owners interact with end users and complementors, their demand side characteristics and performance affect the overall value creation of ecosystems. This research investigated how the emergence of popular complements on a mobile communication platform impacts the usage of other complementary products by the platform's end users and how platform owners can benefit from such demand spillovers. We identified two different forms of demand spillovers (i.e., backward and forward) and conceptualized how each subsequently affects platform expansion. On the basis of individual user-level app usage data, we empirically demonstrated how the presence of a popular app alters the demand structure of a platform through changes in the usage of other apps operating within it. The findings reveal that popular app adoption by users increases the number of apps used and the duration of app usage, excluding the usage of popular apps, only within the platform offering a popular app. These results support the existence of positive spillovers from popular complement adoption on a platform. Such positive within-platform spillovers are derived from both backward spillovers onto existing apps adopted before popular app adoption and forward spillovers onto new apps to be adopted after the uptake of favored apps. These patterns suggest that positive spillovers of popular app adoption occur through both the increased retrieval of existing apps and reduced uncertainty about newly released apps. Furthermore, forward spillover is considerably stronger than backward spillover, implying that platform owners can reap benefits by coordinating the launch of new complements and the promotion of less-known counterparts to end users with the emergence of a popular app. These results shed light on how platform owners can manage their complements and create value beyond direct contributions from popular complements.

Analyzing Active Fund Managers' Commitment to ESG: Evidence from the United Nations Principles for Responsible Investment

( Kim, Soohun | Yoon, Aaron )



The United Nations Principles for Responsible Investment (PRI) is the largest global environmental, social, and governance (ESG) initiative in the asset-management industry to date. We analyze what happens after active U.S. mutual funds sign the PRI to assess whether they exhibit ESG implementation. We find that PRI signatories attract a large fund inflow, but we do not observe improvements in fund-level ESG scores or fund returns. We consider a battery of ways to proxy for funds??? ESG incorporation (e.g., entry/ exit, screening, engagement, voting for pro-ESG proposals), but fail to observe evidence of meaningful on average follow-through. Next, we explore cross-sectional fund characteristics and find that only quant funds exhibit small improvements in ESG performance versus other funds, mainly through buying high-ESG-performing stocks. Furthermore, we note that signatories are not superior performers in ESG issues prior to joining the PRI relative to non-PRI funds, but PRI affiliation tends to be widely advertised on company websites, marketing materials, and fund documents. Overall, a reasonable reader may perceive our findings as consistent with PRI funds??? greenwashing. We note, however, that what we uncover is based only on outcome-based measures and may miss some actual efforts of signatories.

Multidimensional Targeting and Consumer Response

( DESPOTAKIS, Stylianos | YU, Jungju )



Advancements in targeting technology have allowed firms to engage in more precise targeting based on several aspects of consumers' preferences. Exposed to more targeted ads, consumers are becoming increasingly aware of being targeted and respond accordingly. This paper provides a theoretical analysis of multidimensional targeting under which consumers can draw inferences about multiple components of their utility from the advertised product. We show that the firm can be worse off under multidimensional targeting than under single-dimensional targeting, in which the firm targets consumers based only on a single component of their utility. This is because, with multidimensional targeting, targeted consumers may face greater uncertainty about which specific dimension(s) they can expect to enjoy the advertised product. Therefore, they may be less willing to exert a costly effort of clicking the ad and purchasing the product. When this result holds, the firm may want to adopt a single-dimensional targeting strategy. However, we show that the firm cannot credibly commit to such a strategy once given access to multiple dimensions of customer data. Interestingly, a higher unit cost of advertising can mitigate the firm's commitment problem for utilizing customer data and, thus, increase the firm's profit. Moreover, the firm can sometimes lower the price to recover some of, but not entirely offset, the drawbacks of multidimensional targeting. We discuss the implications of our results regarding the current practice of targeted advertising and data privacy protection policies.

Contact : Joo, Sunhee ( shjoo2006@kaist.ac.kr )

Faculty & Research