We investigate the salesforce compensation strategy of a firm selling products in a category that several consumers find technically sophisticated, such as electronics or financial products with legal fine print. Consumers are unable to judge the value difference between a baseline product and a...

This paper studies the relation between endogenous and exogenous switching costs. A firm can determine the size of endogenous switching costs, but not the size of exogenous switching costs. This paper develops a game theoretical model to investigate whether these two types of switching costs...

We consider the case of a first-time interaction between a buyer and a supplier who is unreliable in delivery. The supplier declares her estimate of the ability to meet the order obligations, but the buyer may have a different estimate, which may be higher or lower than the supplier's estimate....

Rewarding customers with own products or services has become an increasingly popular practice across a spectrum of industries such as airlines, hotels, and telecommunication. In these service industries, firms face demand uncertainty and strict short-term capacity constraint. When the market...

In this paper we study such pricing practices like MCI's Friends and Family Program that employ price discriminations on the basis of callers' social ties. We characterize a consumer's personal communication network by the number of strong and weak ties that the consumer has. We then derive a...

Consumer choice is influenced in a direct and meaningful way by the actions taken by others. These “actions” range from face-to-face recommendations from a friend to the passive observation of what a stranger is wearing. We refer to the set of such contexts as “social interactions” (SI)....

This paper investigates the dynamic relation between callers' social ties and their wireless phone service consumption. We construct a large pair-level panel dataset with information on the number of each pair's common contacts, calling activities, prices, and each caller's characteristics over...

Sweepstakes and contests are an extremely common promotional strategy used by firms. The sweepstakes and contests often differ significantly in the design of reward structure. For example, in 1999, Godiva Chocolates conducted a sweepstakes where one box of chocolates contained a diamond...

In goal--oriented services, consumers want to get transported from one well--defined state (start) to another (destination) state without much concern for intermediate states. A cost--based evaluation of such services should depend on the total cost associated with the service---i.e., the price...

Wireless number portability (WNP) is a telecommunication regulatory policy that requires cellular phone service providers to allow customers who switch service subscriptions to retain their original phone numbers. The right to retain the number lowers the switching cost for a consumer. Thus, the...