Alan Sorensen

• University of Wisconsin–Madison

We estimate an equilibrium model of ticket resale in which consumers' and brokers' decisions in the primary market reflect rational expectations about the resale market. Estimation is based on a unique dataset that merges transaction details from both the primary and secondary markets for tickets to major rock concerts. In our model, the presence o...

We develop a model of herds in which consumers observe only the aggregate purchase history, not the complete ordered history of search actions. We show that the purchasing information changes the conditions under which herds can occur for both low- and high-quality products. Inferior products are certain to be ignored; high quality products may be...

Multiproduct firms can set separate prices for all possible bundled combinations of its products "mixed bundling"). However, this is impractical for firms with more than a few products, because the number of prices increases exponentially with the number of products. We find that simple pricing strategies are often nearly optimal. Specifically, we...

Can negative information about a product increase sales, and if so, when? Although popular wisdom suggests that “any publicity is good publicity”, prior research has only revealed downsides to negative press. Negative reviews or word-of-mouth, for example, have been found to harm product evaluations and sales. This research flashlight (page 50) con...

Changes in technologies for reproducing and redistributing digital goods (e.g., music, movies, software, books) have dramatically affected profitability of these goods, and raised concerns for future development of socially valuable digital products. However, broader illegitimate distribution of digital goods may have offsetting demand implications...

Can negative publicity ever increase consumer choice, and if so, when? Three studies, using a combination of econometric analysis and experimental methods, delineate contexts under which negative publicity will have positive versus negative effects. While prior research have shown only downsides to negative press (e.g., reduced product evaluations...

This paper evaluates a pilot program run by a company called OPOWER, previously known as Positive Energy, to mail home energy reports to residential utility consumers. The reports compare a household’s energy use to that of its neighbors and provide energy conservation tips. Using data from randomized natural field experiment at 80,000 treatment an...

We develop an equilibrium model of ticket resale in which buyers' decisions in the primary market, including costly efforts to "arrive early" to buy underpriced tickets, are based on rational expectations of resale market outcomes. We estimate the parameters of the model using a novel dataset that combines transaction data from both the primary and...

Yes, “incomplex ” is a word. We looked it up. We are grateful to Amitay Alter for research assistance, and to TheatreWorks for providing the data. Thanks also to Lanier Benkard, Garth Saloner and Andy Skrzypacz for Under mixed bundling a firm that sells K products can set different prices for all (2K −1) bundled combinations of its products. For tw...

This paper studies the role of product discovery in the demand for recorded music. We show that releasing a new album causes a substantial and permanent increase in sales of the artist's old albums-especially if the new release is a hit. Patterns in these "backward spillovers" suggest that they result from consumers discovering the artist upon hear...

In principle, a multiproduct firm can set separate prices for all possible bundled combinations of its products (i.e., "mixed bundling"). However, this is impractical for firms with more than a few products, because the number of prices increases exponentially with the number of products. In this study we show that simple pricing strategies are oft...

This paper uses detailed weekly data on sales of hardcover fiction books to evaluate the impact of the New York Times bestseller list on sales and product variety. In order to circumvent the obvious problem of simultaneity of sales and bestseller status, the analysis exploits time lags and accidental omissions in the construction of the list. The e...

ABSTRACT Can negative information about a product increase sales, and if so, when? Although popular wisdom suggests that “any publicityis good publicity,” prior research has demonstrated only downsides to negative press.Negative reviews or word-of-mouth, for example, have been found to hurt product evaluation and sales. Using a combination of econo...

This paper analyzes the welfare effects of resale using detailed data on primary and secondary market sales of rock concert tickets. We have detailed sales data from Ticketmaster (the primary market) for several hundred rock concerts from the summer of 2004, and we have matched those data with transactions on eBay and StubHub (the secondary market)...

This paper studies the role of consumer learning in the demand for recorded music by examining the impact of an artist%u2019s new album on sales of past and future albums. Using detailed album sales data for a sample of 355 artists, we show that the release of a new album increases sales of old albums, and the increase is substantial and permanent%...

We use data on the enrollment decisions of federal annuitants to estimate the influence of publicized ratings on health plan choice. We focus on the impact of ratings disseminated by the National Committee for Quality Assurance (NCQA), and use our estimates to calculate the value of the information. Our approach exploits a novel feature of the data...

I use data from the University of California to empirically examine the role of social learning in employees' choices of health plans. The basic empirical strategy starts with the observation that if social learning is important, health plan selections should appear to be correlated across employees within the same department. Estimates of discrete...

This paper uses detailed weekly data on sales of hardcover fiction books to evaluate the impact of the New York Times bestseller list on sales and product variety. In order to circumvent the obvious problem of simultaneity of sales and bestseller status, the analysis exploits time lags and accidental omissions in the construction of the list. The e...

This paper uses detailed weekly data on sales of hardcover fiction books to evaluate the impact of New York Times book reviews on sales. In order to weigh the relative propensity of reviews to inform and to persuade, the analysis utilizes a measure of review opinion obtained through a systematic reading of each review. The estimates indicate that i...

This paper uses unique data from the state of Connecticut to examine discounting patterns in the state's hospital industry for the years following deregulation (1995-1998). The data provide a rare opportunity to study payer-level differences in negotiated discounts for hospital services. In addition to presenting descriptive evidence on how discoun...

This paper uses detailed data on retail pharmacy transactions to make inferences about the nature and intensity of consumer search for prescription drugs. Prescription prices exhibit patterns that should, in principle, induce search: in particular, prices vary widely across stores, and stores' price rankings are inconsistent across drugs (so the lo...

This study seeks to establish the empirical importance of price dispersion due to costly consumer search by examining retail prices for prescription drugs. Posted prices in two geographically distinct markets are shown to vary considerably across pharmacies within the same market, even after one controls for variation due to pharmacy differences. P...

In many differentiated good markets like music, books, and movies, the choice set of available products is overwhelmingly large and growing as new products flow into the market each month. Consumers are not aware or poorly informed about many of the available products. They learn about the products and their preferences for them from the purchasing...