Title: Product-Line Design in the Presence of Consumers’ Anticipated Regret

Time: 2019年4月1日 15:00-16:30

Address: bat365中文官方网站大楼214

主讲人: Baojun Jiang （姜宝军） Ph.D. Associate Professor, Washington University in St. Louis

邀请部门：运营与供应链管理研究中心

 

Abstract: Consumers are often uncertain about their valuations for product quality when choosing among different options in a product line and will learn their valuations only after buying and using a product. Some consumers may thus experience over-purchase or under-purchase regret, depending on whether they have purchased a higher or lower quality level than what they would have chosen had they known their true valuations. When consumers anticipate their potential post-purchase regret, their purchase decisions may be affected. Our analysis shows that over-purchase regret lowers the firm’s profit, but under-purchase regret can benefit the firm if the consumers’ over-purchase regret is not strong. When the firm optimally designs its product line, the quality difference between its offerings will be larger (smaller) if consumers’ anticipated regret increases (reduces) its profit. Surprisingly, although anticipated regret tends to reduce the consumers’ utility, in equilibrium, the presence of anticipated regret can increase consumers’ expected surplus. We also examine when the firm should allow consumers to return their products by paying a restocking fee, and how the optimal restocking fee will change with consumers’ propensities of the two types of regret.

 

Presenter Biography: Baojun Jiang is an associate professor of marketing at the Olin Business School at Washington University in St. Louis. He received a B.A. in economics and physics from Grinnell College, an M.S. in physics and an M.S. in electrical engineering from Stanford University, an M.B.A. from the University of Texas at Austin, and an M.S. and Ph.D. in information systems from Carnegie Mellon University. His current research interests include the sharing economy, platform-based business models, channels, innovations, competitive strategy, behavioral economics, and marketing-operations interface. His research has been published in top-tier journals such as Marketing Science, Management Science, Journal of Marketing Research, and Production and Operations Management. He was selected as a 2017 MSI Young Scholar by the Marketing Science Institute, and serves on the Editorial Review Boards of Journal of Marketing Research and Marketing Science.