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Do personalized offerings enabled by big data only bring economic benefits to firms but not to consumers? In this paper, we seek to address this question by examining a particular category of personalized offerings provided by algorithmic product recommendation systems. While the economic value of algorithmic product recommendations to firms is mostly understood, their benefits to consumers are not well quantified in the literature. We conduct a randomized field experiment on an apparel retailer’s website in the US to estimate the benefits of recommendations to consumers. We find that recommendations helped consumers discover lower-priced products on the website, which results in a higher probability of product purchase (lower likelihood of failed search efforts) and a lower price of purchased products. Specifically, an additional recommended product page view due to recommendations leads to a 15 percent increase in purchase probability and a $1.59 decrease in the purchase price. The product recommendations are particularly beneficial to consumers for product categories with a higher relative price dispersion and a higher proportion of niche products. Due to these benefits, consumers substitute 0.14 keyword search page views and 0.63 product category page views for each recommended product page view under recommendations. The recommendations generated a surplus of $56,631 (3.8 percent of the total sales), two-thirds of which the retailer captured as additional revenue, and the remaining one-third the consumers as price savings.

Engaging in unethical consumption behaviors is an acute societal problem that can have severe consequences for adolescents, and businesses in particular have been accused of making such consumption particularly appealing and accessible. However, the causes of unethical behaviors are not well understood and research on the causes has been mixed. In this research, we investigate the effects of coping strategies for loneliness on adolescents’ adoption of unethical behaviors, a topic that business ethics research has not explored. In a large-scale study (n = 409) of adolescents (ages 13–17), we show that whether loneliness leads to the adoption of unethical behaviors depends on the strategies adolescents use to cope with their loneliness: active coping strategies are associated with fewer unethical behaviors, whereas passive coping strategies are associated with more unethical behaviors. In addition, we show that active and passive coping strategies can be executed through consumption practices. We show that the relation between active coping and fewer unethical behaviors is mediated by sharing of possessions, whereas the relation between passive coping strategies and more unethical behaviors is mediated by product acquisition. Finally, we also show that these mediated relations differ as a function of age cohort (grade level). The indirect effect of active coping on fewer unethical behaviors via sharing holds only for middle school adolescents, whereas the indirect effect of passive coping on more unethical behaviors via product acquisition holds only for high school adolescents. We shed new light on both the bright and dark sides of materialism and unethical behaviors and provide practical implications for research on loneliness, business ethics, and unethical behaviors.

International audience; What causes adolescents to develop consumer’ ethical beliefs? Prior research has largely focused on the negative influence of peers and negative patterns of parent–child interactions to explain risky and unethical consumer behaviors. We take a different perspective by focusing on the positive support of parents and peers in adolescent social development. An integrative model is developed that links parental and peer support with adolescents’ self-worth motives, their materialistic tendencies, and their consumer ethical beliefs. In a study of 984 adolescents, we demonstrate support for a sequential mediation model in which peer and parental support is positively related to adolescents’ self-esteem and feelings of power, which are each associated with decreased materialism as a means of compensating for low self-worth. This reduced materialism is, in turn, associated with more ethical consumer beliefs.

An important challenge for many firms is to identify the life transitions of its customers, such as job searching, expecting a child, or purchasing a home. Inferring such transitions, which are generally unobserved to the firm, can offer the firms opportunities to be more relevant to their customers. In this paper, we demonstrate how a social network platform can leverage its longitudinal user data to identify which of its users are likely to be job seekers. Identifying job seekers is at the heart of the business model of professional social network platforms. Our proposed approach builds on the hidden Markov model (HMM) framework to recover the latent state of job search from noisy signals obtained from social network activity data. Specifically, we use the latent states of the HMM to fuse cross-sectional survey responses to a job-seeking status question with longitudinal user activity data, resulting in a partially HMM. Thus, in some time periods, and for some users, we observe a direct measure of the true job-seeking status. We demonstrate that the proposed model can predict not only which users are likely to be job seeking at any point in time but also what activities on the platform are associated with job search and how long the users have been job seeking. Furthermore, we find that targeting job seekers based on our proposed approach can lead to a 29% increase in profits of a targeting campaign relative to the approach that was used by the social network platform. This paper was accepted by Juanjuan Zhang, marketing.

Automakers, including Toyota and General Motors, were recently caught by the U.S. regulator for deliberately hiding product defects in an attempt to avoid massive recalls. Interestingly, regulators in the United States and United Kingdom employ different policies in informing consumers about potential defects: the U.S. regulator publicly announces all ongoing investigations of potential defects to provide consumers with early information, whereas the UK regulator does not. To understand how these different announcement policies may affect cover-up decisions of automakers, we model the strategic interaction between a manufacturer and a regulator. We find that, under both countries’ policies, the manufacturer has an incentive to cover up a potential defect when there is a high chance that the defect indeed exists and it may inflict only moderate harm. However, if there is only a moderate chance that the defect exists, only under the U.S. policy does the manufacturer have an incentive to cover up a potential defect with significant harm. We show that the U.S. policy generates higher social welfare only for very serious issues for which both the expected harm and recall cost are very high and the defect is likely to exist. We make four policy recommendations that could help mitigate manufacturers’ cover-ups, including a hybrid policy in which the regulator conducts a confidential investigation of a potential defect only when it may inflict significant harm. This paper was accepted by Vishal Gaur, operations management.

In incentive-alignment choice experiments, each decision is realized with some prob- ability prob < 1. Incentive alignment induces truth telling, i.e., respondents do not consciously lie, given the information they have processed. However, based on the psychological distance literature and the bounded rationality literature, we predict that prob < 1 is not necessarily enough to induce consumers to process information and choose as they would if choices were realized with certainty (prob = 1). In three eye tracking experiments, we vary the probability prob that choices will be realized, from 0 to 1, and study the impact on attention, information processing, and choice. Consistent with our hypotheses, we find that as prob is increased from 0 to 1, consumers: process the choice-relevant information more carefully and in a way that is more consistent with a compensatory decision process; become less novelty seeking; become more price sensitive. These findings have implications for the ecological validity of incentive-aligned preference measurement surveys. While it is not feasible to systematically use questions with high prob in the eld, we further predict and find that placing a higher-probability question (such as an external validity task) at the beginning rather than the end of a questionnaire has a desirable carryover effect on attention, information processing and choice throughout the questionnaire.

This article focuses on changes in leadership’s discourse about the “triple bottom line” in Ben & Jerry’s ice cream from its founding days through to its acquisition by and integration into Unilever. For this study, we analyzed CEO claims about “who we are” from their letters in annual reports (what we label projected identity). A sample of employees (both long-service and relative newcomers) were interviewed about their perceptions of Ben & Jerry’s over the 30 years covered. Findings reveal that successive CEOs stressed different “logics” about the business and what would make it successful over the years with the founders emphasizing a strong linkage between the economic, product, and social components of the company’s triple bottom line and their next three successors decoupling these components and pushing, each in different ways, for stronger financial returns. As a result, organization members were “whipsawed” between their CEOs’ different logics and identity claims. The CEO letters exhibit a progression over time from a more normative to utilitarian tone familiar in the organizational identity literature. The messaging shifts, however, when a fifth CEO takes charge and reintegrates the firm’s triple bottom line. Thus, the firm’s projected identity evolved in a U pattern starting with an integrated triple bottom line logic, shifting to a more linear logic where the economic mission dominates, and then reintegration where multiple bottom lines are embraced once again. Here, we explore both the strategic (external) and personal (internal) challenges informing the different CEOs’ messages over years, the whipsaw effect on staff, and the longer term evolution of projected identity in the company and reemergence of its integrated triple bottom line. This study contributes to the corporate social responsibility and organization identity literatures by documenting how CEOs (and their company) must struggle with maintaining an integrated triple bottom line in the context of commercial challenges and major changes involved in mergers and acquisitions. It also speaks to the practical matters of keeping normative traditions alive amid competing pressures for change.

The important role of entrepreneurship in the dynamics of the arts sector and the influence of the leader’s personality make succession a key issue in creative industries. What happens to an artistic organization when its founder leaves? How does it evolve? Can it adopt a style of management that is compatible with the founder’s absence? This article focuses on the case of Groupe Bernard Loiseau, an iconic French company in the culinary arts whose owner and chef died suddenly. It sheds light on how the question of succession and that of style were addressed in this organization and how they are addressed in artistic organizations in general.