Should I Stay or Should I Go? How loss-aversion influences choice
Alexander Chernev has spent his career studying consumer behavior. In a recent study he found that a consumer’s personal goals, particularly their concern for safety and security, strongly influence how likely they are to switch to something new or stay with what they know.
Content: Article | Author: Alexander Chernev | Source: Kellogg Insight | Subject: Marketing / Sales
Agreeing to Disagree: Differing Beliefs Lead to Price Drift
Differing beliefs lead to price drift: The standard view of how stock prices move—that investors act rationally on information and that markets are efficient—does not account for price drift. Snehal Banerjee explains that price drift may occur because investors agree to disagree about the average valuation of an asset.
Content: Article | Authors: Ilan Kremer, Ron Kaniel, Snehal Banerjee | Source: Kellogg Insight | Subjects: Economics, Finance
Too Conscious to Decide?
Recent research by Loran Nordgren and his colleagues Ap Dijksterhuis, Maarten Bos, and Rick van Baaren adds some surprising insights to our understanding of thought and its influence on decision making. Published in Science, the work highlights the value of unconscious thought, suggesting that when it comes to complex decisions, many of our best choices are made in the absence of attentive deliberation. Contrary to … [ Read more ]
Content: Article | Source: Kellogg Insight | Subject: Organizational Behavior
Liquidity Rules: Manage innovation or risk repeating history
New research from Arvind Krishnamurthy argues that the rapid adoption of financial innovations—in this case, subprime mortgage-backed securities—set the stage for crisis. His report with coauthor Ricardo J. Caballero found that when popular new financial instruments behave unexpectedly, investors flee the market. The liquidity supply tightens, making it hard for market participants to get the capital they need.
Content: Article | Authors: Arvind Krishnamurthy, Ricardo J. Caballero | Source: Kellogg Insight | Subjects: Economics, Finance
Counterfeit Competition: Driving up price and quality
Driving up price and quality: Strong intellectual property rights (IPRs) are generally considered necessary to encourage innovation and protect the price of authentic products. However, research by Yi Qian (Assistant Professor of Marketing at the Kellogg School of Management) shows that under some circumstances the quality and prices of authentic goods can actually increase with the market entry of counterfeit products.
Content: Article | Author: Yi Qian | Source: Kellogg Insight | Subject: Marketing / Sales
People are Talking
Talk may be cheap, but listening to what people are saying about your product can be a valuable method of improving corporate performance. According to recent research, there is a measurable connection between what is being said about a product in online posts and real-time customer behavior. Becoming aware of online comments and learning how to use the information can avert potential downturns in sales … [ Read more ]
Content: Article | Authors: Jacquelyn Thomas, Lakshman Krishnamurthi, Shyam Gopinath | Source: Kellogg Insight | Subjects: Market Research, Marketing / Sales