Kannan Srinivasan

Carnegie Mellon University | CMU

This work analyzes the impact of regulating explainable artificial intelligence.

When Does Beauty Pay? A Large-Scale Image Based Appearance Analysis on Career Transitions In this study, we collect up to 15 years of career histories for over 40,000 MBA graduates from top 100 MBA programs in the United States. We find that attractive MBA graduates earn at least $2,508 more in yearly salary compared with plain-looking (unattractiv...

The erosion of high-end fashion brands by fast-fashion copycats (e.g., Zara, H&M) has stirred controversies and unceasing legal attempts to copyright fashion designs. Despite the purported negative impact of copycats, the effect of fashion copycats on high-end brands remains empirically unclear. Research on this topic has been impeded by the absenc...

We assess different motives underlying mask-wearing behaviors and discuss novel strategies for segmenting customers based on the motives.

Recent AI algorithms are blackbox models whose decisions are difficult to interpret. eXplainable AI (XAI) seeks to address lack of AI interpretability and trust by explaining to customers their AI decision, e.g., decision to reject a loan application. The common wisdom is that regulating AI by mandating fully transparent XAI leads to greater social...

Bitcoin falls dramatically short of the scale provided by banks for payments. Currently, its ledger grows by the addition of blocks of ∼2,000 transactions every 10 minutes. Intuitively, one would expect that increasing the block capacity would solve this scaling problem. However, we show that increasing the block capacity would be futile. We analyz...

We study how Airbnb property demand changed after the acquisition of verified images (taken by Airbnb’s photographers) and explore what makes a good image for an Airbnb property. Using deep learning and difference-in-difference analyses on an Airbnb panel data set spanning 7,423 properties over 16 months, we find that properties with verified image...

Ensuring fairness in algorithmic decision making is a crucial policy issue. Current legislation ensures fairness by barring algorithm designers from using demographic information in their decision making. As a result, to be legally compliant, the algorithms need to ensure equal treatment. However, in many cases, ensuring equal treatment leads to di...

We study the effect of Airbnb’s smart-pricing algorithm on the racial disparity in the daily revenue earned by Airbnb hosts. Our empirical strategy exploits Airbnb’s introduction of the algorithm and its voluntary adoption by hosts as a quasinatural experiment. Among those who adopted the algorithm, the average nightly rate decreased by 5.7%, but a...

Purpose Since emerging in 1983, warehouse club growth outpaced traditional grocery stores. Individual consumption in the U.S. grew concurrently. We investigate whether there is a connection between the emergence of the warehouse clubs and Americans' unparalleled consumption levels. Findings Using standard principles from microeconomics, we postula...

In 2012, consumers paid $32 billion in overdraft fees, representing the single largest source of revenue for banks from demand deposit accounts during this period. Owing to consumer attrition caused by overdraft fees and potential government regulations to reform these fees, financial institutions have become motivated to investigate their overdraf...

Chronic diseases, which account for 75% of healthcare expenditure, are of particular importance in trying to understand the rapid growth of healthcare costs over the last few decades. Individuals suffering from chronic diseases can consume three types of services: secondary preventive care, which includes diagnostic tests; primary preventive care,...

Accurate forecasting of sales/consumption is particularly important for marketing because this information can be used to adjust marketing budget allocations and overall marketing strategies. Recently, online social platforms have produced an unparalleled amount of data on consumer behavior. However, two challenges have limited the use of these dat...

In this editorial accompanying the Special Section on Marketing Science in Emerging Markets (MSEM), we describe how research on emerging markets can contribute to richer theoretical and substantive understanding of markets and marketing. Such research can also aid in providing managerial guidance on how to operate in emerging markets. We conclude w...

Building on the structural two-sided matching model, we develop a framework to study the sourcing market in the context of marketing firms matching with manufacturers. Both sides prefer partners that could generate significant values with better sourcing process abilities. Moreover, experienced manufacturers are preferred by the branded marketing f...

This paper examines the effects of consumer preferences, firms’ costs, and advertising efficiencies on firms’ pricing and persuasive advertising strategies. We show that as the firms’ horizontal differentiation increases, the firm with a lower value-added product tends to increase persuasive advertising, whereas its competitor tends to reduce adver...

In many service markets such as consulting, auto repair, financial planning, and healthcare, the service provider may have more information about the customer's problem than the customer, and different customers may impose different costs on the service provider. In principle, the service provider should ethically care about the customer's welfare,...

This is an abridged version of an evaluation report for Marketing Science, which was commissioned by the INFORMS Publications Committee as part of its periodic review of every INFORMS journal. The coauthors listed here comprised the task force that conducted the research project and strategic analysis described below.

In this paper we quantify the economic worth of celebrity endorsements by studying the sales of endorsed products. We do so with the use of two unique data sets consisting of monthly golf ball sales and professional golfer (celebrity) quality levels. In particular, we examine the impact Tiger Woods had on sales of Nike golf balls. Our identificatio...

Marketing Science is in a great competitive position with a strong editorial board and infrastructure support. This editorial summarizes the state of the journal as perceived by its stakeholders. They believe that the journal should strive to remain a premier international journal and embrace diverse topics, methods, and foci. It should continue to...

Traditional advertising, such as TV and print advertising, primarily builds awareness of a firm's product among consumers. On the other hand, sponsored search advertising can target consumers in a later stage of the purchase process because they self-identify themselves by searching for a relevant keyword on a search engine. The ability to target t...

We propose a dynamic structural model that illuminates the economic mechanisms shaping individual behavior and outcomes on crowdsourced ideation platforms. We estimate the model using a rich data set obtained from IdeaStorm.com, a crowdsourced ideation initiative affiliated with Dell. We find that, on IdeaStorm.com, individuals tend to significantl...

We present an integrated framework for managing product variety in software features. Our framework includes multiple perspectives of variety that links customer requirements in software products to cost incurred by software developers. This link is established by identifying specific features in software products. We report empirical validation of...

Commercial open source software (COSS) products—privately developed software based on publicly available source code—represent a rapidly growing, multibillion-dollar market. A unique aspect of competition in the COSS market is that many open source licenses require firms to make certain enhancements public, creating an incentive for firms to free r...

Firms in several markets try to attract consumers by offering discounts in other unrelated markets. This promotion strategy, which we call "cross-market discounts," has been successfully adopted in the last few years by many grocery retailers in partnership with gasoline retailers across North America, Europe and Australia. In this paper, we use an...

Crowdsourcing initiatives are becoming an increasing popular tool for new idea generation for firms. Although such initiatives are widely adopted in many different industries, the number of ideas generated often decline over time and the implementation rates (percentage of posted ideas that are implemented by the firm) are very low. Critics of crow...

While millions of products are sold on its retail platform, Amazon.com itself stocks and sells only a very small fraction of them. Most of these products are sold by third-party sellers who pay Amazon a fee for each unit sold. Empirical evidence clearly suggests that Amazon tends to sell high-demand products and leave long-tail products for indepen...

The Robinson-Patman Act (RP), an antitrust statute aimed at protecting small businesses, limits price setting in distribution channels. To avoid costly penalties under RP, managers take a variety of precautions when pricing to retailers and wholesalers. But how likely is a court to find a defendant guilty of violating the RP? We find that this like...

This study explores the implications of rejecting the sealed-bid abstraction proposed by Zeithammer and Adams [Zeithammer, R., C. Adams. 2010. The sealed-bid abstraction in online auctions. Marketing Sci. 29(6) 964-987]. Using a conditional order statistic model that relies on the joint distribution of the top two proxy bids of an auction, Zeithamm...

We study the bidding strategies of vertically differentiated firms that bid for sponsored search advertisement positions for a keyword at a search engine. We explicitly model how consumers navigate and click on sponsored links based on their knowledge and beliefs about firm qualities. Our model yields several interesting insights and a main counter...

Internet auction companies have developed innovative tools that enable sellers to reveal more information about their credibility and product quality to avoid the "lemons" problem. On the basis of signaling and auction theories, the authors propose a typology of Internet auction quality and credibility indicators, adopt and modify Park and Bradlow'...

Internet auction companies have developed innovative tools that enable sellers to reveal more information about their credibility and product quality to avoid the “lemons” problem. On the basis of signaling and auction theories, the authors propose a typology of Internet auction quality and credibility indicators, adopt and modify Park and Bradlow'...

Recently fixed pricing and auctions have been brought together in a new pricing format that offers bidders the option of prematurely ending an auction at a fixed price. The growing popularity of auctions presents an interesting pricing decision for managers: whether to sell at a fixed price, in a regular auction, or through a buy-it-now auction. Th...

The growing dominance of large retailers has altered traditional channel incentives for manufacturers. In this paper, we present a theoretical model to illustrate a strategic manufacturer response to a dominant retailer. In our model, a dominant and a weak retailer compete for the sale of a single product supplied by a single manufacturer. The domi...

There has been rapidly growing interest in structural models, and the review paper by Chintagunta et al. (2006) is a timely contribution. The paper identifies the key issues and provides an excellent assessment. A contemporaneous paper by Erdem et al. (2005) also offers a critical examination on some of the issues. My comments are in three areas. F...

Manufacturers of consumer products often complain of lower profits in light of the growing channel dominance of retailers, such as Wal-Mart, Home Depot, and other "power retailers". We argue that this complaint might not be valid. In an analytical model of competing manufacturers and competing multi-product retailers, manufacturers might actually s...

The separation of buyers from sellers introduces severe information asymmetry on the product quality in internet auction. Based on signaling theory, the authors use eBay as an example to examine how the innovative tools introduced by eBay serve as quality indicators that allow sellers to reveal more information about their products. It is the first...

In certain product categories, large discount retailers are known to offer shallower assortments than traditional retailers. In this paper, we investigate the competitive incentives for such assortment decisions and the implications for manufacturers’ distribution strategies. Our results show that if one retailer has the channel power to determine...

etter targeting opportunities and the increasing role of information-intensive environments have created new challenges for firms in obtaining customer information. Such information can help firms increase their profits through cross-selling opportunities. However, revealing personal preferences and contact information can raise the risks for custo...

We explore issues in theory-driven choice modeling by focusing on partial-equilibrium models of dynamic structural demand with forward-looking decision-makers, full equilibrium models that integrate the supply side, integration of bounded rationality in dynamic structural models of choice and public policy implications of these models. Copyright Sp...

In this chapter, we discuss research conducted at a leading avionics and missile guidance systems manufacturer to identify the key managerial drivers in the design phase of new product development (NPD) projects. Three factors were found to significantly influence the time and financial performance metrics in the design and manufacturing phases. Ou...

Clickstream data provide information about the sequence of pages or the path viewed by users as they navigate a website. We show how path information can be categorized and modeled using a dynamic multinomial probit model of Web browsing. We estimate this model using data from a major online bookseller. Our results show that the memory component of...

We propose a structural model to investigate the impact of forgetting on consumers' brand choice decisions in frequently purchased products. Forgetting results in consumers imperfectly recalling their prior brand evaluations when making a purchase decision in the category. We conceptualize the imperfect recall by positing that consumers recall thei...

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 demand is low, firms hold excess capacities that would le...

Abstract Previous work in the area of new product development,(NPD) has focused mainly on the role of design in downstream value chain activities. In this field study, conducted at a leading avionics guidance systems manufacturer, we gathered primary data on time and cost performance of both

Logit choice models have been used extensively to study promotion response. This article examines whether brand-]switching elasticities derived from these models are overestimated as a result of rational consumer adjustment of purchase timing to coincide with promotion schedules and whether a dynamic structural model can address this bias. Using si...

In corporate policy statements, seminars, journal articles—even in television commercials—the message comes through loud and clear: To remain competitive, we must do a better job of listening to our customers. Through close contact with customers, designers can more accurately identify market requirements, quickly refine product specifications, and...

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 product upgrade with add-on features. While the firm...

We propose a structural model to investigate the impact of forgetting on consumer's brand choice decision in frequently purchased products. Forgetting results in consumers imperfectly recalling their prior brand evaluations while making a purchase decision in the category. We conceptualize the imperfect recall by positing that the consumers recall...

We offer an econometric framework that models consumer's consideration set formation as an outcome of her costly information search behavior. Because frequently purchased products are characterized by frequent price promotions of varying depths of discounts, a consumer faces significant uncertainty about the prices of the brands. The consumers enga...

Logit choice models have been used extensively to study consumer choice behavior and promotion response. A common finding is that promotion has a strong effect on brand choice. This paper examines whether brand switching elasticities derived from these models may be over-estimated due to rational consumer adjustment of purchase timing to coincide w...

The Internet gives incredible opportunities for companies to learn about their consumers.

corresponding author is Alan L. Montgomery. The authors wish to thank Comscore Media Metrix for their generous contribution of data without which this research would not have been possible. Additionally, we would like to thank Brett Gordon for his help with perl scripting, and Randy Bucklin for his comments.

We offer an econometric framework that models a consumer's brand choice decision as a two-stage process: consideration set formation followed by brand selection from the brands in the consideration set. The proposed structural model of consideration set is motivated by the fact that consumers have limited information-acquisition ability. In the con...

The authors investigate whether and how pricing and promotional activities influence prescription choice behavior using a comprehensive panel of physicians and data on competitive price and promotional activities. The authors find that physicians are characterized by fairly limited price sensitivity, detailing and samples have a mostly informative...

Reward programs, a promotional tool to develop customer loyalty, offer incentives to consumers on the basis of cumulative purchases of a given product or service from a firm. Reward programs have become increasingly common in many industries. The best-known examples include frequent-flier programs offered by airlines, frequent-guest programs offere...

Product design decisions substantially affect the cost and revenue drivers. A design configuration with commonality can lower manufacturing cost. However, such a design may hinder the ability to extract price premiums through product differentiation. We explicitly investigate the marketing-manufacturing trade-off and derive analytical implications...

We have very limited knowledge of the antecedents of household-level price sensitivity. In this paper, we systematically examine the price sensitivities of a large number of households across multiple product categories to attempt to uncover the antecedents of price sensitivity. Using ERIM scanner panel data provided by A. C. Nielsen, we estimate t...

Brand choice models implicitly assume that consumers incorporate all relevant marketing information such as price, display, and feature for key brands on each purchase occasion. The authors examine whether consumers actively evaluate the brands on every occasion. They propose a multistate choice model with varying levels of evaluation and estimate...

Supply chains today are increasingly depending on effective and efficient information exchanges between the value chain partners. Over the last decade, practices such as just in time management, quick response manufacturing and lean production systems have required coordinated and reliable information exchanges between trading partners (HBS 1991)....

Empirical studies examining responses to new product entries come to the puzzling conclusion that, in general, an incumbent reacts to a new entrant after a significant delay. Even easy-to-implement price cuts are observed after significant lag following entry. These findings seem to contradict the existing literature that either implicitly assumes...

We study the introductory signalling strategy for a durable product that faces optimistic expectations among customers about price declines over time. The firm introducing the product knows that experiential learning is low for the product. However, customers, being uncertain about the extent of experiential learning, assign a nonzero probability t...

In probit brand choice models, researchers increasingly focus on random variation of key parameters of interest. An important source of such variation may be due to differing consumer response to marketing efforts across purchase occasions. Also, variables common across alternatives influence purchase behavior, but may not be measured. Failure to a...

In this paper, we investigate if a manufacturer can simultaneously maximize own and channel profit with any quantity-based pricing policy, including a quantity-discount policy, when selling through heterogeneous retailers. We show that the manufacturer's best possible pricing policy, when retailers self-select quantities, is a quantity discount. Ho...

Our work represents one of the first attempts to assess the impact of IT (information technology) on both process output and quality. We examine the optical character recognition and barcode sorting technologies in the mail sorting process at the United States Postal Service. Our analysis is at the application level, and thus does not involve the a...

Network externality is an important consideration in many high-technology product markets. In these markets, consumers' expectations about the future installed base and the resultant externality benefits play a critical role in their product adoption decisions. The authors investigate the strategic implications of consumer uncertainty regarding net...

Network externality is an important consideration in many high-technology product markets. In these markets, consumers’ expectations about the future installed base and the resultant externality benefits play a critical role in their product adoption decisions. The authors investigate the strategic implications of consumer uncertainty regarding net...

In a comprehensive model, we capture the impact of price changes and coupon offers on brand switching behavior for a frequently purchased product. We incorporate two sources of variations: unobserved heterogeneity and brand loyalty propensity. We compare effectiveness of (manufacturer's) coupons with (retailer's) price cuts. Our results offer sever...

We define sources of heterogeneity in consumer utility functions relatedto individual differences in response tendencies, drivers of utility, formof the consumer utility function, perceptions of attributes, statedependencies, and stochasticity. A variety of alternative modelingapproaches are reviewed that accommodate subsets of these various source...

In fast-cycle, high technology industries, the speed and rate at which companies can introduce products into the market are critical for sustaining competitive advantage and market share. The authors analyze new product development by three international manufacturers that dominate a segment of the electronic component industry. The objective is to...

The authors study the impact of time-based product development on sustainable market share gains in a high-technology computer component industry. Three dominant firms, with international new product development and manufacturing facilities, have introduced more than 200 new products into this fast-cycle market in a five-year period. The authors sy...

The authors study the impact of time-based product development on sustainable market share gains in a high-technology computer component industry. Three dominant firms, with international new product development and manufacturing facilities, have introduced more than 200 new products into this fast-cycle market in a five-year period. The authors sy...

This paper describes an empirical study of the relationship between life-cycle cost, quality and customer satisfaction in software development projects. Our analysis enables the identification of management strategies for new product enhancements and service support. We study the relationship between life-cycle cost and quality using a dataset of 2...

Franchisors often charge a common franchise fee and royalty on all the products sold or serviced by their franchisees. Since the potential demand for each product may be different, a product specific pricing scheme may be optimal. Hence, the common strategy of aggregate pricing appears to be a puzzling practice. However, we show that under certain...

We examine the basic premise that consumers may anticipate future promotions and adjust their purchase behavior accordingly. We develop a structural model of households who make purchase decisions to minimize their expenditure over a finite period. The model allows for future expectations of promotions to enter the purchase decision. Households wit...

Empirical research on pioneering advantage establishes a strong association between pioneering and market share. Researchers, however, suggest that managerial skills may account for the relationship and underscore the need to control for such skills. The authors develop efficiency measures to represent a firm's managerial skills, employing the data...

Empirical research on pioneering advantage establishes a strong association between pioneering and market share. Researchers, however, suggest that managerial skills may account for the relationship and underscore the need to control for such skills. The authors develop efficiency measures to represent a firm's managerial skills, employing the data...

Direct marketing is witnessing explosive growth. As consumers increasingly purchase products from their homes, their ability to judge the quality of products they buy is significantly reduced. In this paper we study how money-back guarantees can signal product quality in such environments. We interpret product quality broadly to mean both the level...

We study the signalling strategy of a principal who is privately informed about its high demand potential to an uninformed risk-neutral agent. We analyze the model in the context of a contract between a franchisor and a franchisee. We examine the distortions of a two-part pricing scheme necessary to credibly inform the franchisee (agent). We also s...