Marketing Seminar（2017-02）

Title: A Two Stage Dynamic Model with Non-parametric Learning

Speaker: Mantian (Mandy) Hu, The Chinese University of Hong Kong

Time: Wednesday, March 22, 13:30-15:00

Place: Room217, Guanghua Building 2

Abstract:

Daily deal fatigue refers to a phenomenon in which consumers get tired of deals from daily deal sites. Such “fatigue” if it exists, is a challenge faced by the daily deal industry which includes online sites such as Groupon and LivingSocial. In this project, we study consumer behavior in daily deal websites. For this, we utilize a proprietary dataset consisting of the complete clickstream within the browsing sessions of people who newly subscribed to the Groupon website between January and March 2011. Based on the data, we aim at proposing a rational explanation for this phenomenon and providing insights for the companies to deal with this challenge. The data reveal two interesting patterns – the probability that a consumer clicks on a merchant in the emailed newsletter indeed declines over time consistent with “fatigue.” Second, the probability that the consumer actually makes a purchase is increasing over time. We propose a model of search and learning that tries to explain these observations. We find that in daily deal websites, consumers are uncertain about the quality of future deals and constantly face the tradeoff between whether click the deal and purchase it now or wait for another one. Consumers tend to click on more deals in the beginning to learn about the quality distribution of deals. As their knowledge accumulates, they can form better expectations of the deal quality; thus the incentive of learning is declining so they click fewer deals. But once they click, they are more likely to purchase the deal.

Introduction:

Mantian (Mandy) Hu is an Assistant Professor of Marketing at the Chinese University of Hong Kong. She received Phd degree in Marketing from New York University. Her current research interests include Word of Mouth; Network Effects, Social Learning, Social Networks; Consumer Behavior in Dynamic Social Settings; Brand Equity. Her research has been published in journals such as International Journal of Research in Marketing, Marketing Science.

http://www.bschool.cuhk.edu.hk/index.php/schools-departments/marketing/faculty/full-time-faculty?pid=698&sid=162:Hu-Mandy-Mantian

Your participation is warmly welcomed!