Job Market Paper
How Does Online Shopping Affect Offline Price Sensitivity?
with Shirsho Biswas and Hema Yoganarasimhan
-- Under Review at Marketing Science
📖 Abstract
The rapid growth of e-commerce has significantly transformed consumer behavior, raising questions about how the adoption of online shopping influences offline shopping. This paper investigates whether consumers who adopt online shopping with a retailer become more price sensitive in their subsequent offline purchases with the same retailer. Using transaction-level data from a large Brazilian pet supplies retailer operating both online and offline channels, we compare “adopters” – customers who began shopping online after a period of offline-only purchasing – with “non-adopters” who remained offline-only. We estimate a discrete choice logit model with individual-level heterogeneity, using a novel algorithm to handle high-dimensional fixed effects and address price endogeneity. We apply a staggered difference-in-differences approach to estimate the Average Treatment Effect on the Treated (ATT). We find that offline price sensitivity increases significantly post-online adoption in three of four product categories, particularly in low-switching-cost items like pet hygiene. Counterfactual pricing simulations show that incorporating these behavioral spillovers into pricing strategies can increase firm profits by up to 4.1%. These results underscore the importance of recognizing cross-channel effects in consumer behavior and contribute to the literature on pricing and multichannel retailing by identifying online adoption as a key driver of offline price sensitivity.
Working Papers
Channel Choice and Customer Value
with Shirsho Biswas and Hema Yoganarasimhan
-- Revise and Resubmit at Journal of Marketing
📖 Abstract
We investigate how the adoption of a retailer's digital shopping channels (e-commerce website and/or mobile app) affects the purchase behaviors of consumers who had previously only shopped at the retailer's physical stores. We consider two types of adopters – (a) those who adopted online shopping due to the environmental shock of COVID-19 (covid adopters), and (b) those who adopted online shopping of their own volition without any external stimulus, pre-COVID-19 (organic adopters). We find that both groups of online shopping adopters increase their total spend post-online adoption, and the magnitude of this increase in spend is similar for both groups. However, we uncover significant differences in how the two groups use the online and offline channels post-online-adoption. While both groups slowly shift more of their purchases to online channels, covid adopters do so at a significantly slower rate. These differences in channel share lead to significant differences in the profitability of the two groups, with covid adopters being more profitable than organic adopters. Our findings highlight the need for managers to consider the different reasons for consumers' selection into the adoption of new channels when forecasting the impact on post-adoption purchase behavior and profitability.
Content and Pricing Strategies for Digital Video Games
with Scott Shriver and Hema Yoganarasimhan
-- Working Paper
📖 Abstract
The video game industry has experienced a wave of disruption as consumers rapidly shift to acquiring and consuming content through digital channels. Incumbent game publishers have struggled to adapt their content and pricing strategies to shifting consumption patterns and increased competition from low-cost independent suppliers. Recently, game publishers have pursued new business models that feature downloadable content (DLC) services offered in conjunction with or as a replacement for traditional physical media. While service-based models can potentially extract additional surplus from the market by allowing for more customized content bundles and pricing than with physically distributed media, exploiting these opportunities poses a challenge to firms who must attempt to optimize their offerings over a formidably complex decision space. In this paper, we develop a structural framework to facilitate the recovery of consumer preferences for game content and the optimization of firm content/price strategies. Our approach is to leverage rich covariation in observed content consumption and DLC service subscriptions to infer consumer content valuations and price sensitivities. We devise a joint model of video game activity and demand for downloadable content, where consumers sequentially make (discrete) DLC subscription choices followed by (continuous) choices of how much to play. Our model accounts for forward-looking consumer expectations about declining content prices and attendant concerns for dynamic selection bias in our demand estimates. We document evidence of heterogeneous preferences for content and significant effects of DLC availability on game usage. Our counterfactual experiments suggest that compressing the DLC release cycle and moving to a recurring fee structure are both viable ways to increase revenues.
The Hidden Costs of Flexibility: JIT Scheduling and Turnover in a U.S. Restaurant Chain
with Qiuping Yu
-- Working Paper
📖 Abstract
Just-in-time (JIT) scheduling, increasingly augmented by algorithmic tools, allows service firms to dynamically match labor supply with demand. While effective in reducing labor costs, such systems often generate precarious schedules—particularly in retail and service sectors—raising concerns about employee well-being and long-run firm performance. Using granular shift-level data covering over 2.3 million hours worked by 2,400+ frontline employees over three years at a national casual dining chain, we examine how scheduling quality – along three dimensions: predictability (advance notice), consistency (temporal stability), and sufficiency (adequacy of hours) – affects worker turnover. Leveraging a Cox proportional hazards model with an instrumental variables approach, we find that: (1) a 10 p.p. increase in real-time shift additions (with no advance notice) raises turnover risk by 7.1%, while additions with short (two-day) notice have no significant effect; (2) variability in shift timing increases attrition, but volatility in weekly hours does not; and (3) each additional weekly hour worked reduces turnover risk by 2.3%. These results highlight the hidden costs of just-in-time scheduling that prioritizes flexibility over schedule quality. Our findings offer actionable insights for firms seeking to improve workforce stability and contribute empirical evidence to ongoing policy debates on fair scheduling practices.