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This paper quantifies the consequences of a brand taking a political stance and measures the net effect of boycott/buycott movements on sales.

We introduce the idea of beneficiary framing to the promotion response literature. Two large-scale field experiments (total N = 73,010) in the context of print-at-home coupons show that framing a savings message as affecting a beneficiary (i.e., “save for X”) increases coupon printing and redemptions. This beneficiary framing effect is equivalent to an incremental $0.05 (3.4%) of coupon value. We report eight additional studies (total N = 3,052) to investigate the mechanism, replicability, and role of salience. We find evidence supporting a mental accounting explanation: participants with beneficiary-related budget categories rate beneficiary-framed coupons as more account-relevant and more valuable than non-beneficiary-framed coupons. The experiments further suggest that the beneficiary framing effect (i) holds across multiple common budgeting domains, (ii) cannot be fully explained by an affect transfer mechanism, (iii) is not solely attributable to the visual salience of the beneficiary framing treatment, and (iv) exhibits a boundary condition in which beneficiary framing may reduce promotion response when the recipient does not have a relevant beneficiary. Overall, the results suggest a low-cost approach that some marketers can use to increase promotion uptake.

Studies examining pricing outcomes in the food retail industry are complicated both by the multiproduct nature of transactions and by the presence of highly concentrated food processing and retailing industries that mediate between relatively competitive farm product markets and the consumer market. In this review, we examine theoretical and empirical evidence for retail pricing and the vertical relationships that have emerged among retailers, food manufacturers, and farmers. We first focus our analysis on consumer behavior in multiproduct retail markets, including consumer search, habit formation, and reference pricing, and then discuss retail market outcomes for price discrimination, price fairness, and price obfuscation. We then turn to relationships between retailers and food manufacturers through bargaining outcomes, market foreclosure, and slotting allowances, and discuss the resulting implications for retail-price pass-through.

In this rejoinder, we expand on the generalizability of our findings, identification challenges, and consumers’ motivation to engage in political consumerism.

Can TV ads effectively "cut through the clutter?" New measurement technology quantifies TV viewer tuning, presence and attention, enabling new distinctions between TV ads that are viewable and TV ads that are actually viewed. We use broadcast networks' verifiably quasi-random ordering of ads within commercial breaks to identify causal effects of ads on viewing behaviors among 4.26 million advertising exposures. We supplement ad metadata with three sets of machine-coded ad content features for 6,650 frequent ads. Recreational product ads preserve audience tuning and presence. Prescription drug advertisements decrease tuning and presence, with larger audience losses during drug ads treating more prevalent and severe conditions. Viewer attention decreases with ad duration and during the first three slots in the break. Effects of ad content on viewer attention are near zero, calling into question whether advertisers can use ad content to attract audience attention.

Personalized and social commerce are becoming increasingly prevalent and are transforming how businesses operate and how consumers make choices. The primary goal of this paper is to review the existing literature relating to personalized and social commerce. To accomplish this goal, we first delineate and summarize the definitions of these two related concepts and highlight their intersections and differences. Second, we discuss the economics of personalized and social commerce by presenting the key economic frameworks used to analyze the welfare implications of these ecosystems, such as multi-sided platforms, intermediaries, social media, and other related marketplaces. We review distinct research streams encompassing perspectives from economics, marketing, management, information systems, sociology, and psychology. This paper bridges these distinct bodies of research in order to identify and systematize the evidence relating to the benefits and challenges of personalized and social commerce to both consumers and businesses. Finally, we identify existing limitations and gaps in the literature and discuss directions for future research.

This study examines the impacts of two types of advertising content—healthy eating and anti-obesity advertising—on the demand for healthy and unhealthy food and beverage items. We show that differentiating consumers by weight is crucial in fully understanding the effects of advertising content on food and beverage demand. We find that among overweight individuals, anti-obesity advertisements are more effective than healthy eating advertisements at reducing the demand for unhealthy items and increasing the demand for healthy items. Furthermore, the magnitude of this effect increases with BMI. We discuss possible explanations and policy implications based on our results.

Using minute-by-minute TV advertising data covering some 300 firms, 327,000 ads, and $20 billion in ad spending, we study the real-time effects of TV advertising on investors' searches for online financial information and subsequent trading activity. Our identification strategy exploits the fact that viewers in different U.S. time zones are exposed to the same programming and national advertising at different times, allowing us to control for contemporaneous confounding events. We find that an average TV ad leads to a 3% increase in SEC EDGAR queries and an 8% increase in Google searches for financial information within 15 minutes of the airing of that ad. These searches translate into larger trading volume on the advertiser's stock, driven primarily by retail investors. The findings on retail investor ad-induced trading are corroborated with hourly data from Robinhood, a popular retail trading platform. We also show that ads induce searches and trading of companies other than the advertiser, including of close rivals. Altogether our findings suggest that advertising originally intended for consumers has a non-negligible effect on financial markets.

Switching costs are generally regarded as anti-competitive as firms can raise prices to "locked-in" consumers, at least up to the cost of switching to a lower-priced alternative. However, there is some evidence, both theoretical and empirical, that tends to show the opposite. Namely, suppliers, anticipating the pool of rents potentially available, compete aggressively to acquire non-switching consumers. Moreover, fixed shopping costs and uncertain prices imply that there is a "real option" value embedded in consumers' shopping behavior, and which must be compensated if consumers are to switch stores. We argue that retail prices are lower when retailers use programs designed to increase customer retention, or "stickiness." We test our theory using a panel of household-level store-choice data. Contrary to the conventional wisdom, we find that loyalty is pro-competitive and leads to lower prices than would otherwise be the case. We also find that approximately 50% of the loyalty effect is attributable to the existence of a real option in store choice.

Mobile web technology enables discriminatory, or personalized, pricing for many more consumer good categories than has traditionally been the case. Setting prices according to individual valuations, however, generates adverse consumer reaction unless consumers are invited to participate in the price-formation process. Consumer perceptions of price fairness are key to the sustainability of any discriminatory pricing regime. Perceptions of price fairness, in turn, are hypothesized to be shaped by “self-interested inequity aversion” in which prices tend to be regarded as unfair, and purchase probabilities fall, if others are perceived to pay a lower price, while prices tend to be regarded as more fair, and consumers more likely to purchase, if inequity is in the buyers favor. Our experimental data also shows that the implications of inequity aversion for sellers can be at least partially reversed if consumers are allowed to participate in the price-formation process by negotiating the price they pay. The primary implication of our findings is that, in order to be viable, any system of discriminatory pricing for consumer goods should invite consumers to have a stake in the price they pay. Such participatory pricing may provide one way out of the current trap of Hi–Lo, or promotional, pricing that neither retailers nor manufacturers regard as sustainable.

The impact of three menu-labeling formats on changes in dietary quality of an away-from-home meal is measured. The analysis is based on a lunchtime experiment using 232 student participants, with a control group and three treatments: (1) a calorie-content posting, (2) a complete nutrition-facts panel, and (3) health-related claims. We find that the calorie content posting lead to the highest calorie reduction, but it was also the only treatment associated with a significant reduction in the fiber content of the meal. The complete nutrition-facts panel treatment resulted in most sizable decreases in problematic nutrient content such as empty calories and calories from fat and added sugar. The health-related claims treatment led to a reduction in carbohydrates and calories from fat. The nutrient density of selected meals remained mostly unchanged across all treatments, but the empty calories proportion of total calories was reduced in the nutrition-facts and health-related claims treatments, with the latter also leading to some reduction in added sugar density. [EconLit citations: I12, I18, Q18].

We examine whether the effects of information about product labels change over time. The analysis is based on 110 adult (nonstudent) participants who participated in a two-stage economic experiment taking place three months apart. In the first stage of the experiment, willingness-to-pay (WTP) was elicited for items that were stated to contain bovine growth hormones, genetically modified ingredients, ingredients that have been exposed to antibiotics, and ingredients that were irradiated. Depending on the treatment, each first-stage auction was supplemented with positive or negative information about each of the labels. The second-stage experiments re-elicited WTP for the same group of participants and the same items accompanied with the original labels, but this time without any secondary information. Our results suggest that the adverse impact of negative information does not persist over time; whereas in the case of positive information, changes in WTP from the initial to the follow-up auctions are not statistically significant. This study enhances our understanding of how consumers retain information over a longer time period and suggests that previous studies that measure labeling impacts on WTP using isolated, single-shot experiments may overstate the longer term effects of labels and negative information. La presente etude vise a determiner si les effets de l'information concernant les etiquettes d'un produit changent ou non au fil du temps. Cent-dix sujets adultes (non etudiants) ont participe a une experience realisee en deux etapes espacees de trois mois. Lors de la premiere etape, nous avons recueilli le consentement a payer (CAP) des participants pour des produits dont on disait contenir des hormones de croissance bovines, des ingredients genetiquement modifies, ayant ete exposes a des antibiotiques et ayant ete irradies. Au cours de cette premiere etape, les participants ont recu de l'information supplementaire, positive ou negative, a propos de chaque etiquette. Lors de la deuxieme etape, nous avons recueilli de nouveau le CAP des participants pour les memes produits sur lesquels figuraient les etiquettes originales, sans toutefois fournir d'information supplementaire. Les resultats de notre etude montrent que l'effet defavorable de l'ajout d'information negative ne persiste pas avec le temps; dans le cas de l'ajout d'information positive, les changements quant au CAP entre les premieres encheres et les encheres suivantes ne sont pas statistiquement significatifs. Cette etude nous a permis de mieux comprendre de quelle facon les consommateurs retiennent l'information a long terme et autorise a penser que les etudes anterieures qui ont mesure les repercussions de l’etiquetage sur le CAP en realisant des experiences uniques et isolees ont peut-etre surestime les effets a long terme de l’etiquetage et de l'information negative.

Media multitasking competes with television advertising for consumers’ attention, but may also facilitate immediate and measurable response to some advertisements. This paper explores whether and how television advertising influences online shopping. We construct a massive data set spanning $3.4 billion in spending by 20 brands, measures of brands’ website traffic and transactions, and ad content measures for 1,224 commercials. We use a quasi-experimental design to estimate whether and how TV advertising influences changes in online shopping within two-minute pre/post windows of time. We use nonadvertising competitors’ online shopping in a difference-in-differences approach to measure the same effects in two-hour windows around the time of the ad. The findings indicate that television advertising does influence online shopping and that advertising content plays a key role. Action-focus content increases direct website traffic and sales. Information-focus and emotion-focus ad content actually reduce website traffic while simultaneously increasing purchases, with a positive net effect on sales for most brands. These results imply that brands seeking to attract multitaskers’ attention and dollars must select their advertising copy carefully. Data, as supplemental material, are available at http://dx.doi.org/10.1287/mksc.2014.0899 .

Price promotions are typically offered in groups on websites, mailings, and circulars, but little is known about how promotional offers in near proximity affect each other. Across two large-scale field experiments (N = 66,184) conducted on a multibrand coupon website, we find that when lead promotions offer high-value deals, consumers are more likely to print subsequent offers, a finding we call “lead offer spillover.” In the first field experiment, doubling the value of three lead offers increased the printing of subsequent offers by 18% and redemptions by 12%. In the second, doubling the value of a single lead offer increased subsequent offer prints by 12%. Additional analyses and experiments indicate that larger lead offers increase consumer search for subsequent offers and are not primarily driven by changes in evaluative judgments or complementarities between lead and subsequent offers.

Absence labels promote the absence of a particular ingredient or production practice. Consumers usually perceive organic labels as an umbrella absence label for a variety of ingredients and production practices. Such organic labels often use similar language but are based on different certification requirements. For example, both organic wine and wine made with organic grapes are available to U.S. consumers, but little is known about consumer preferences for such labeled products when information about the certification standards is available. Moreover, while absence labels, which advertise the absence of certain attributes or practices, are prevalent on the market, little is known about how information on conventional production practices impacts consumer behavior. Using an artefactual experiment with 128 adult non-student participants, we investigate consumer demand for conventional wine, organic wine, and wine made with organic grapes when information about production standards is provided to participants with and without details regarding conventional winemaking practices. We find that while both organic labels carry a significant and very similar willingness-to-pay (WTP) premium, information about certification standards and conventional wine making practices can reduce WTP for all wines. Providing information about the two organic certification standards reduces consumer WTP for both absence labeled and conventional wine categories. This effect largely disappears for organic wine, but not wine made with organic grapes, when information about conventional wine-making practices is also provided.

We develop an empirical study of the information�persuasion trade-off in advertising using data on the information content of ads, which we measure with the number of information cues in ads within an entire industry. The data are from video files of all advertisements in the OTC analgesics industry from 2001 to 2005. We propose a simple theoretical framework to motivate an ordered probit model of information content. We find that stronger vertical differentiation is positively associated with the delivery of more product information in a brand's advertisements: brands with higher levels of quality include more information cues. Next, comparative advertisements contain significantly more product information than self-promotional advertisements. Finally, brands with larger market shares and brands competing against generic substitutes with large market shares use ads that have less information content.

Using a lab experiment with 351 adult non-student subjects, we investigate the impact of labels and secondary information on willingness to pay (WTP) for foods that use various ingredients and processes that have been the subject of food policy discussions. We find a distinct asymmetry of WTP sensitivity between 'Contains X' and 'Free of X' labels with negatively-framed secondary information. The 'Free of X' label has an impact only when secondary information is provided, and the negative impact of 'Contains X' is mitigated by secondary information. We also consider how the results of our study can inform the ongoing debate about mandatory food labeling regulations in the United States: if mandatory labeling is adopted, providing additional information about what the product contains would significantly lessen the negative impact on demand. Copyright 2013, Oxford University Press.

Firms are increasingly using technology to enable targeted, or "personalized" pricing strategies. In settings where prices are transparent to all consumers, however, there is the potential that inter-personal price differences will be perceived as inherently unfair. In response, firms may strategically obfuscate their prices so that direct interpersonal comparisons are more difficult. In this article, we conduct an experimental analysis of strategic obfuscation in an environment in which price transparency varies exogenously and endogenously, and consumers are inherently inequity-averse. We find that obfuscating price information among buyers can be effective in alleviating peer-induced fairness concerns, and increase the likelihood that price offers are accepted. Sellers understand that buyers are inequity-averse, and that buyers are aware of the incentives present to obfuscate price offers. As a result, equilibrium prices are higher when a firm chooses to obfuscate prices, but they remain constrained by perceptions of distributional fairness between buyers and sellers.

This study investigates consumer response to various types of advertising for fruits and vegetables—a food category which health officials uniformly agree is significantly under-consumed in the United States. Using an adult, non-student subject pool of 271 participants in an economic experiment, consumers’ response to different types of fruit and vegetable advertising is measured empirically. This study finds that broad-based advertising, which is generic advertising for the entire fruit and vegetable category, increases consumer willingness to pay by an average of 24.6%. The simulation model shows that broad-based advertising for fruits and vegetables, either alone or as a hybrid with individual commodity-specific campaigns (e.g., apple advertising), would reduce average caloric intake per person by approximately 1800 kcal per year. The results of this study may contribute to new public policy initiatives that aim to reduce diet-related illnesses and obesity, which have become increasingly prevalent in the United States.

Generic promotion activities have traditionally been used for individual agricultural commodities, yet there is renewed interest in implementing a mandatory "broad-based" promotion program for all fruits and vegetables. Here we use data from an experiment that introduce subjects to various promotional efforts for fruits and vegetables to estimate the shift and rotational effects of advertising. Econometric results indicate that commodity-specific promotional efforts may not be effective at increasing demand for fruits and vegetables. After controlling for various demographic differences among treatments, our results show that consumers' valuation of fruits and vegetables was highest among subjects exposed to broad-based advertisements. Copyright 2011, Oxford University Press.

We model comparative advertising as brands pushing up own brand perception and pulling down the brand image of targeted rivals. We watched all TV advertisements for OTC analgesics 2001-2005 to construct matrices of rival targeting and estimate the structural model. These attack matrices identify diversion ratios and hence comparative advertising damage measures. We find that outgoing comparative advertising attacks are half as powerful as self-promotion in raising own perceived quality and cause more damage to the targeted rival than benefit to the advertiser. Comparative advertising causes most damage through the pull-down effect and has substantial benefits to other rivals.

Promotion programs that subsidize advertising for exported agricultural products continue to be used despite much criticism that they are an inefficient use of taxpayer money. At the same time, others have advocated for an increase in funds to support domestic advertising for fruits and vegetables. We investigate the economic and nutritional effects from changes in both export and domestic promotion expenditures for horticultural and nonhorticultural commodities. Simulation results show that even modest decreases in trade promotion expenditures coupled with a corresponding increase in domestic promotion efforts have the capacity to influence domestic market conditions, caloric intake, and nutrient consumption.

Media multitasking competes with television advertising for consumers’ attention, but it also may facilitate immediate and measurable response to some advertisements. This paper explores whether and how television advertising influences online shopping. We construct a massive dataset spanning $3.4 billion in spending by 20 brands, measures of brands’ website traffic and transactions, and ad content measures for 1,224 commercials. We use a quasi-experimental design to estimate whether and how TV advertising influences changes in online shopping within two-minute pre/post windows of time. We use non-advertising competitors’ online shopping in a difference-in-differences approach to measure the same effects in two-hour windows around the time of the ad. The findings indicate that television advertising does influence online shopping and that advertising content plays a key role. Action-focus content increases direct website traffic and sales. Product-focus and emotion-focus ad content actually reduce website traffic while simultaneously increasing purchases, with a net effect on sales that is positive for most brands. These results imply that brands seeking to attract multitaskers’ attention and dollars must select their advertising copy carefully.

We empirically study the information-persuasion trade-off in advertising using data on the information content of advertisements, which we measure with the number of information cues in ads. We propose a simple theoretical framework to motivate an ordered probit model of information content. We find that stronger vertical differentiation is positively associated with the delivery of more product information in a brand’s advertisements: brands with higher levels of quality include more information cues. Next, comparative advertisements contain significantly more product information than self-promotional advertisements. Finally, brands with higher market shares and brands competing against strong generic substitutes have less information content.

We derive equilibrium incentives to use comparative advertising that pushes up own brand perception and pulls down the brand image of targeted rivals. Data on content and spending for all TV advertisements in OTC analgesics enable us to construct matrices of dollar rival targeting and estimate the structural model. Using brands’ optimal choices, these attack matrices identify diversion ratios, from which we derive comparative advertising damage measures. We find that comparative advertising causes more damage to the targeted rival than bene fit to the advertiser. We simulate banning comparative advertising to find industry profi ts rise.