Academic Research
Trying Not To Spend
Financial literacy programs aim to prevent consumer overspending by teaching and encouraging fiscally sound habits (purchase restraint, responsible credit use, savings). Unfortunately, trying not to spend is at odds with the emotions consumers experience in a tempting marketplace. The theory of trying considers attitudes and intentions, but not emotions, when trying to consume. To address this gap, we examine indebted consumers opting into formal financial literacy training explicitly designed for debt repayment and avoidance of future debt. Through indebted consumers’ diary reflections and interviews with clients and debt management counselors, we show that financial literacy’s emphasis on budgeting needs versus wants is not sufficient when consumers try not to spend. To reconcile budgets with actual purchasing behavior when faced with temptations in the marketplace, consumers often adopt a linguistic exercise of imaginatively bending and blending utilitarian and hedonic discourses to justify purchases by recategorizing wants as needs. Further, consumers trying not to spend experience negative emotions; how they regulate those emotions impacts their success in getting out of debt. While financial literacy courses only give consumers budget-setting tools, indebted consumers cannot be successful without tools for trying not to spend in the marketplace.
Paper Link: https://link.springer.com/article/10.1007/s11747-025-01091-8
Authors: Mary C. Gilly, Mary Finley Celsi, Stephanie Dellande, Hope Jensen Schau, Russel Nelson & Chin-May Aradhye
ABSTRACT
Financial literacy programs aim to prevent consumer overspending by teaching and encouraging fiscally sound habits (purchase restraint, responsible credit use, savings). Unfortunately, trying not to spend is at odds with the emotions consumers experience in a tempting marketplace. The theory of trying considers attitudes and intentions, but not emotions, when trying to consume. To address this gap, we examine indebted consumers opting into formal financial literacy training explicitly designed for debt repayment and avoidance of future debt. Through indebted consumers’ diary reflections and interviews with clients and debt management counselors, we show that financial literacy’s emphasis on budgeting needs versus wants is not sufficient when consumers try not to spend. To reconcile budgets with actual purchasing behavior when faced with temptations in the marketplace, consumers often adopt a linguistic exercise of imaginatively bending and blending utilitarian and hedonic discourses to justify purchases by recategorizing wants as needs. Further, consumers trying not to spend experience negative emotions; how they regulate those emotions impacts their success in getting out of debt. While financial literacy courses only give consumers budget-setting tools, indebted consumers cannot be successful without tools for trying not to spend in the marketplace.
Engagement in Platform Markets: A (Video) Game Changer?
Empirical studies of two-sided platform markets, like the video game console industry, typically rely on software and platform sales data, thereby overlooking today’s managerial focus on engagement. This present research leverages a unique dataset tracking the daily engagement of over 14,000 users of Microsoft’s Xbox One and Xbox Series video game platforms to remedy this gap. We investigate how software development and release characteristics affect consumers’ engagement with software titles and the platforms on which they release. Our analysis finds that releasing software on subscription services is the strongest determinant of engagement, overshadowing established determinants like software quality or exclusivity. While superstar software and exclusive titles generate engagement, their relative importance is smaller compared to sales-based findings, reported in prior literature. Instead, franchises, non-superstars, and multihomed software perform much better on engagement than on sales, especially when included in a subscription service. These findings have important industry implications.
Paper Link: https://doi.org/10.1007/s11747-025-01089-2
Authors: Michiel Van Crombrugge, Stefan Stremersch
ABSTRACT
Empirical studies of two-sided platform markets, like the video game console industry, typically rely on software and platform sales data, thereby overlooking today’s managerial focus on engagement. This present research leverages a unique dataset tracking the daily engagement of over 14,000 users of Microsoft’s Xbox One and Xbox Series video game platforms to remedy this gap. We investigate how software development and release characteristics affect consumers’ engagement with software titles and the platforms on which they release. Our analysis finds that releasing software on subscription services is the strongest determinant of engagement, overshadowing established determinants like software quality or exclusivity. While superstar software and exclusive titles generate engagement, their relative importance is smaller compared to sales-based findings, reported in prior literature. Instead, franchises, non-superstars, and multihomed software perform much better on engagement than on sales, especially when included in a subscription service. These findings have important industry implications.
Utilizing Managerial Beliefs for Set Identification of Price Elasticities of Demand
Data-driven decision-making is increasingly prevalent but can clash with managerial beliefs, risking biased decisions. A prime example is pricing strategy optimization, where traditional methods for estimating price elasticities of demand often lead to counter-intuitive results due to model misspecification and the reliance on single-point estimates. To address this, we propose utilizing structural vector-autoregressions (SVARs) to generate identified sets of elasticities, integrating managerial beliefs into the analysis to improve decision-making processes. Using weak restrictions about the directional effects of supply and demand shocks on sales and prices, and assumptions about the functioning of in-store promotions effectively sharpens the identified sets. Specifically, we analyze the demand for beer at a large scale for 1,953 stores in the US. For many stores (i.e., at least 40%), both recent endogeneity-robust single-equation methods and alternative identification strategies for SVARs used in marketing studies yield positive price elasticity estimates that oppose behavioral fundamentals. Hence, these are hardly informative for designing pricing strategies. Instead, the suggested approach to set identification yields elasticity estimates that are sufficiently precise to improve the design of retail pricing strategies and offer insights into customer’s distinct price sensitivities in grocery and drug stores. Overall, our approach emphasizes the importance of combining data-driven analysis with managerial insights for evidence-based decision-making.
Paper Link: https://doi.org/10.1007/s11747-025-01090-9
Authors: Haschka, R.E., Herwartz, H.
ABSTRACT
Data-driven decision-making is increasingly prevalent but can clash with managerial beliefs, risking biased decisions. A prime example is pricing strategy optimization, where traditional methods for estimating price elasticities of demand often lead to counter-intuitive results due to model misspecification and the reliance on single-point estimates. To address this, we propose utilizing structural vector-autoregressions (SVARs) to generate identified sets of elasticities, integrating managerial beliefs into the analysis to improve decision-making processes. Using weak restrictions about the directional effects of supply and demand shocks on sales and prices, and assumptions about the functioning of in-store promotions effectively sharpens the identified sets. Specifically, we analyze the demand for beer at a large scale for 1,953 stores in the US. For many stores (i.e., at least 40%), both recent endogeneity-robust single-equation methods and alternative identification strategies for SVARs used in marketing studies yield positive price elasticity estimates that oppose behavioral fundamentals. Hence, these are hardly informative for designing pricing strategies. Instead, the suggested approach to set identification yields elasticity estimates that are sufficiently precise to improve the design of retail pricing strategies and offer insights into customer’s distinct price sensitivities in grocery and drug stores. Overall, our approach emphasizes the importance of combining data-driven analysis with managerial insights for evidence-based decision-making.
Dynamics Of Pre-release Consumer Buzz: Driving Communication, Search, And Participation For Market Performance
While pre-release consumer buzz may drive new product market performance, little is known about the importance of its distinct behavioral manifestations: communication, search, and participation. This paper not only studies how these three pre-release buzz behaviors affect market performance but also their dynamic interplay and how firms can drive pre-release buzz. Using movie data, we find self-enhancing and spillover effects of buzz throughout the pre-release period. For driving communication and search behaviors, firm social media posts are most effective, while movie trailers are most effective in evoking participatory behaviors. Furthermore, box office sales benefit the most from pre-release communication, followed by participation and search. These findings extend current knowledge by showing that while all buzz behaviors matter for driving market performance, communication plays a central role due to its powerful spillover effects on search and participation, and firms can effectively stimulate it through social media posts about the new product.
Paper Link: https://link.springer.com/article/10.1007/s11747-024-01077-y
Authors: Thomas F. Schreiner, Timo Mandler, Harald J. van Heerde, Carolin Haiduk
ABSTRACT
While pre-release consumer buzz may drive new product market performance, little is known about the importance of its distinct behavioral manifestations: communication, search, and participation. This paper not only studies how these three pre-release buzz behaviors affect market performance but also their dynamic interplay and how firms can drive pre-release buzz. Using movie data, we find self-enhancing and spillover effects of buzz throughout the pre-release period. For driving communication and search behaviors, firm social media posts are most effective, while movie trailers are most effective in evoking participatory behaviors. Furthermore, box office sales benefit the most from pre-release communication, followed by participation and search. These findings extend current knowledge by showing that while all buzz behaviors matter for driving market performance, communication plays a central role due to its powerful spillover effects on search and participation, and firms can effectively stimulate it through social media posts about the new product.