Quant Marketing 2: Consumer Demand & Implications for Firms
(A2025-125927)

AUTHORS

Rafael P. Greminger, University College London, School of Management; Arash Laghaie, Nova School of Business and Economics; Daniela Schmitt, Nova School of Business and Economics; Max Pachali, Tilburg University; Johannes Kasinger, Tilburg University; Chu (Ivy) Dang, The University of Hong Kong

ABSTRACT

This quantitative marketing session, titled “Consumer Demand & Implications for Firms,” explores models of consumer demand and the implications for firms. The session features four papers that tackle the questions of how to price subscriptions given consumers’ usage intensity, how to estimate consumers’ polarized preferences for sustainable foods, how shrinkflation influenced consumer demand, and how influencers provide shoppertainment experiences to consumers. The first paper, “Rethinking Pricing and Consumption in Subscription Settings” by Pedro M. Gardete, Daniela Schmitt, and Florian Stahl, investigates the relationship between subscription pricing and consumer usage. Using data from an online news publisher, the authors find that subscribers who signed up during a promotion consumed more content compared to regular subscribers and that this consumption difference persisted for over a year. The authors develop and estimate a model that captures both subscription and consumption decisions, providing insights into how pricing affects subsequent usage. The second paper, “Modeling Polarized Preferences for Sustainable Foods” by Tetyana Kosyakova, Max Pachali, Adam Smith, and Thomas Otter, introduces an empirical approach to model preference heterogeneity in markets with polarized consumer segments, such as markets for sustainable foods. Applying this model to the market for conventional and organic strawberries in Florida, the authors show that their approach effectively mitigates the issue of weak price signals in such a market with polarized preferences. As a result, the method substantially improves counterfactual price simulations. The third paper, “Shrinkflation and Consumer Demand” by Aljoscha Janssen and Johannes Kasinger, analyzes the phenomenon of shrinkflation in the U.S. retail market. The authors document the frequency of product downsizing relative to upsizing, examine the accompanying price adjustments, and evaluate consumer responses. Their findings reveal that product downsizing has been a consistent trend over the past decade. The fourth paper, “A Structural Model of Shoppertainment Salesforce in Live-Commerce” by Ivy Dang, studies the effort allocation of influencers during live shopping sessions, where they must balance between entertaining the audience and selling products. The paper introduces a structural model of these effort allocation decisions and uses it to evaluate counterfactual policies. The analysis provides insights into how engagement metrics and compensation schemes determine influencer behavior, offering guidance for designing incentives in the shoppertainment industry.