Essays in quantitative marketing

The first chapter investigates search and matching in online marketplaces, emphasizing how user behavior responds to the presence of others on the platform, which I call ``market thickness". Unlike standard settings in which firms typically benefit from increasing their customer base, in two-sided markets, changes in market thickness can induce complex effects in matching due to the endogenous adjustment of search and selectivity. Motivated by the observed correlation between an individual's selectivity and the number of potential matches and competitors in this market, this chapter causally measures the independent effects of market size and competition size on behavior and explores its implications for platform design in the context of online dating. I design and implement a field experiment that varies information sent to platform participants about the number of potential matches (market size) and number of competitors. Consistent with intuition and observational patterns, the experiment shows that individuals become more selective when they are told that they have more potential matches, and less selective when they are told they have more competition. The effect of changes in selectivity on matching is however an equilibrium outcome. I therefore use the exogenous variation generated by the experiment to identify the parameters of a microfounded model, which then allows me to estimate the equilibrium and evaluate platform-design-linked counterfactuals. I find that matching exhibits decreasing returns to scale when more men and women join the platform, and an increase in market size does not necessarily increase match quality due to heterogeneous effects of market thickness on selectivity. I then show how changing selectivity through a platform design feature may mitigate negative effects of changes in market and competition size. The second chapter is joint work with Megan Hunter. This chapter studies information avoidance and explores its impacts on financial health. We find that individuals who would benefit the most from information about their financial health are the ones who are most likely to avoid the information. In a setting where individuals opt in to receive information about their credit score, we document that the individuals who experience a decrease in their credit score are less likely to seek information about their credit report in the future. Through a series of A/B tests on email campaigns, we measure the causal effect of checking credit information on future credit scores for information avoiders. We find that checking credit information decreases credit scores by 30 points for individuals who are likely to avoid information, compared to individuals who are not likely to avoid information. This finding suggests that encouraging people to access information when they are doing worse can actually worsen their outcomes. The final chapter, which is joint work with Wesley Hartmann, involves measuring frequency effects from advertising. Firms regularly use multiple creatives in their advertising campaigns. This may help them reach diverse sets of consumers with creatives tailored more toward each of their needs and may mitigate the diminishing marginal effects of consumers repeatedly seeing the same creative. We measure the effect of multiple creatives in the context of the Super Bowl, which allows us to disentangle this effect from frequency effects that might also exist when airing the same creative. We assess this question by using exogenous variation in viewership across different creative airings within Super Bowl that arises from the way viewership changes with the score of the game. One challenge unique to measuring frequency effects with multiple creatives is that frequency effects may be difficult to separate from variation in creative effectiveness. To address this challenge, we first show that heterogeneity in creative effectiveness can be explained by the creative's likeability. We then build a model of goodwill accumulation that accounts for both frequency and creative effectiveness. The model estimates confirm that likability captures heterogeneity in creative effectiveness and illustrates that including measures of creative effectiveness affect inference about frequency effects of advertising. We also show that not controlling for the creative's baseline level of effectiveness can confound the estimation of frequency effects.

Keywords: Business.
Advisor: Hartmann Wesley R. (Wesley Robert)
Nair Harikesh S. (Harikesh Sasikumar)
Bronnenberg Bart J. 
Sahni Navdeep