Subimal Chatterjee

How Critical Are Critical Reviews? The Box Office Effects of Film Critics, Star Power, and Budgets

The authors investigate how critics affect the box office performance of films and how the effects may be moderated by stars and budgets. The authors examine the process through which critics affect box office revenue, that is, whether they influence the decision of the film going public (their role as influencers), merely predict the decision (their role as predictors), or do both. They find that both positive and negative reviews are correlated with weekly box office revenue over an eight-week period, suggesting that critics play a dual role: They can influence and predict box office revenue. However, the authors find the impact of negative reviews (but not positive reviews) to diminish over time, a pattern that is more consistent with critics’ role as influencers. The authors then compare the positive impact of good reviews with the negative impact of bad reviews to find that film reviews evidence a negativity bias; that is, negative reviews hurt performance more than positive reviews help performance, but only during the first week of a films run. Finally, the authors examine two key moderators of critical reviews, stars and budgets, and find that popular stars and big budgets enhance box office revenue for films that receive more negative critical reviews than positive critical reviews but do little for films that receive more positive reviews than negative reviews. Taken together, the findings not only replicate and extend prior research on critical reviews and box office performance but also offer insight into how film studios can strategically manage the review process to enhance box office revenue.

Asymmetric Decoy Effects on Lower-Quality Versus Higher-Quality Brands: Meta-Analytic and Experimental Evidence

Prior research demonstrates that adding decoys to choice sets can increase choice shares of brands similar to decoys while reducing shares of brands dissimilar to decoys. Such effects have been dubbed attraction effects and violate the principles of independence of irrelevant alternatives (IIA) and regularity. We report a metaanalysis that, in addition to revealing heretofore unsupported range effects, demonstrates an effect of brand quality Decoys reduce shares of lower-quality competitors more than they reduce shares of higher-quality competitors. Moreover, whereas IIA is violated throughout, regularity is violated only when higher-quality brands are targeted. Decoys increase shares of higher-quality brands but typically do not increase shares of lower-quality brands. To assess the generalizability of the meta-analytic pattern, we tested decoy effects on two distinct populations in a large experiment The more traditional population replicated the meta-analytic pattern (standard asymmetry) while the more nontraditional population reversed it. These findings suggest that while the standard asymmetry is replicable, it may not generalize to all market segments.

The differential processing of price in gains and losses: the effects of frame and need for cognition

Perhaps the most fundamental principle of decision theory is that more money is preferred to less: the principle of desired wealth. Based on this and other principles such as reference dependence and loss aversion, researchers have derived and demonstrated mental accounting (MA) rules for multiple outcome situations. Experiment 1 tested the invariance of the desired wealth principle and two mental accounting rules (mixed gain, e.g.

Asymmetric Competition in Choice and the Leveraging of Competitive Disadvantages

100 gain and a

Complexity, uniqueness, and similarity in between‐bundle choice

50 loss; mixed loss, e.g.

Failing to Suspect Collusion in Price-Matching Guarantees: Consumer Limitations in Game-Theoretic Reasoning

100 loss and a

Innovation Sequences over Iterated Offerings: A Relative Innovation, Comfort, and Stimulation Framework of Consumer Responses

50 gain) across types of decision maker and frame. The desired wealth principle and the MA rule for mixed gains were found to vary depending upon (1) the thoughtfulness of the decision maker (need for cognition, NC), and (2) the frame used to describe gains and losses (e.g. a gain of

Choosing the sure gain and the sure loss: uncertainty avoidance and the reflection effect

x versus a gain of y%). The MA rule for mixed losses, however, was found to be immune to framing effects, even among people who are generally less thoughtful. The differential processing of gains and losses across frames (dollar versus percentage) and individuals (less versus more thoughtful) was tested further in Experiment 2 where evaluations of mixed losses were made at the level of the gestalt as well as the constituent (the gain and the loss being evaluated separately). Framing effects were evidenced only among subjects lower in NC and only when the constituent gain was evaluated. Evaluations of the overall mixed loss and the constituent loss were comparable across situation and individual, suggesting that losses motivate greater processing among people otherwise inclined toward cognitive miserliness.

How consumers value transactions that entail using windfall money to offset missed price discounts

Studies of grocery sales show that consumers of store brands switch to (price) discounted national brands more than consumers of national brands switch to discounted store brands. Such asymmetric price competition can be explained with numerous mechanisms proposed here and elsewhere. We report a choice experiment that replicates asymmetric price competition favoring higher‐quality competitors and demonstrates asymmetric quality competition favoring lower‐quality competitors. Also demonstrated are multiple mechanisms contributing to competitive asymmetries, where dominance involving the otherwise preferred brand is particularly potent (e.g., when a higher‐quality competitor matches the price of an otherwise preferred lower‐quality brand). The findings implicate modifications to (1) theories of decision making when extended to repeat choice, (2) empirical models of secondary purchase data, and (3) strategies for positioning and attacking brands. Whereas improving competitive disadvantages often attracts consumers from competitors more than does improving competitive advantages, this benefit must be weighed against the differentiation sacrificed by improving competitive disadvantages (improving competitive advantages, in contrast, increases differentiation).

Mental Accounting and Changes in Price: The Frame Dependence of Reference Dependence

When offering product/service bundles to customers, marketers must decide how best to configure the bundles such that consumers do not find the bundle‐choice particularly difficult. This paper examines perceived decision difficulty in selecting from a menu of bundles, where the bundles vary on the number of component services, the number of unique services between competing bundles, and their perceived similarity. It is found that larger bundles make decisions more difficult, more unique services between the competing bundles increases decision difficulty for small, but not large, bundles and similar bundles pose greater choice difficulty than dissimilar bundles. Implications of the results are discussed.