Luc Wathieu
Selected Publications
Journal Articles
- Are you ignoring trends that could shake up your business? Harvard Business Review 88(7/8, July-August): 124–131.
- How to stop customers from fixating on price Harvard Business Review 88(5, May): 84–91.
- Ambiguity aversion and the preference for established brands Management Science 55(12, December): 1933–1941.
- Attention arousal through price partitioning Marketing Science 27(2, March-April): 236–246.
- Superfluous choices and the persistence of preference Journal of Consumer Research 33(4, March): 454–460.
- Price as a stimulus to think: The case for willful overpricing Marketing Science 26(1, January-February): 118–129.
- The asymmetric effect of discount retraction on subsequent choice Journal of Consumer Research 31(3, December): 652–657.
- Consumer habituation Management Science 50(5, May): 587–596.
- Consumer control and empowerment: A primer Marketing Letters 13(3, August): 297–305.
- Yesmail.com Journal of Interactive Marketing 14(3): 79–92.
- Risk perception in the short run and in the long run Marketing Letters 10(3): 267–283.
- Habits and the anomalies in intertemporal choice Management Science 43(11): 1552–1563.
- Asymmetric promotion effects and brand positioning Marketing Science 15(4): 379–394.
- Productivity gaps and underemployment Economics Letters 41(1): 35–39.
Book Chapters
- Rooting marketing strategy in human universals In Global market: Developing a strategy to manage across borders, ed. John A. Quelch, Rohit Deshpandé, 83–91. San Francisco: Jossey Bass.
- Hierarchies and the self-control of risk attitude In Economic and environmental risk and uncertainty: New models and methods, ed. Robert Nau, Olvar Bergland, Mark J. Machina, Erik Grønn, 227–243. Dordrecht: Kluwer Academic Publishers.
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Marketing social responsibility
ESMT No. 10-002
Subject(s): Economics, Politics & Business Environment, Strategy & General Management, Marketing, Ethics & Social Responsibility, Management Sciences, Decision Sciences & Quantitative Methods, Keyword(s): corporate social responsibility, cause marketing, signaling games JEL Classification: D42, D21, M3, M14
This paper analyzes the optimal strategy of a profit-maximizing firm in response to social responsibility concerns of consumers. We show that firms will address responsibility demands if consumers are sufficiently motivated and society provides minimal monitoring of false claims. We further show that there is an interaction between the firm's basic positioning and the type of responsibility initiative it undertakes. A firm selling a low quality product commits to social responsibility in the form of good citizenship by investing in compliance with social norms valued by all consumers. In contrast, a firm selling a high quality product tends to contribute to social causes endorsed by its target customers. Under asymmetric information, when consumers cannot observe product quality, we find that a firm can signal its commitment to social responsibility by charging a higher price and by making exaggerated claims that would be too damaging if they were not largely true. Finally, in a vertically differentiated duopoly, we find that only one firm will take on social responsibility initiatives. Overall, these findings suggest that profit-driven competitive marketing strategies can fulfill social responsibility just as much as any other driver of consumer utility.
Published: 2010 -
Enjoy! Assertive language and consumer compliance in (non)hedonic contexts
ESMT No. 09-007
Subject(s): Marketing, Knowledge, Information & Comms System Management, Keyword(s): assertive message, consumer compliance, hedonic consumption, utilitarian consumption, forceful language, persuasion, freedom of choice, reactance JEL Classification: D18, M37
This paper is concerned with the tension between consumer persuasion and
freedom of choice. We study how assertive language (as in the slogan Just do it!)
affects consumer compliance in hedonic vs. utilitarian contexts. Previous
literature consistently claimed that forceful language would cause reactance and
decreased compliance. However, we find in four studies that assertive persuasion
is effective in contexts involving hedonic goods and hedonically framed
utilitarian goods. Our hypotheses emerge from sociolinguistic research and
confirm the relevance of linguistic research in consumer behavior.Published: 2009 -
An empirical approach to understanding privacy concerns
ESMT No. 09-001
Subject(s): Economics, Politics & Business Environment, Keyword(s): privacy, opt-in/opt-out, insurance JEL Classification: D8, M38
This paper shows that privacy concerns in commercial contexts are not solely driven by a desire to control the transmission of personal information or to avoid intrusive direct marketing campaigns. When they express privacy concerns, consumers anticipate indirect economic consequences of data use, such as price discrimination. Our general hypothesis is that consumers are capable of expressing differentiated levels of concerns in the presence of changes that suggest indirect consequences of information transmission. We suggest that there is a homo economicus behind privacy concerns, not simply a primal fear. This hypothesis is tested in a large-scale experiment evoking the context of affinity-based direct marketing of insurances, which relies on data transmitted by alumni associations. Because opt-in and opt-out choices offered by firms to consumers usually capture non-situational preferences about data transmission, their ability to enact privacy concerns is questioned by our findings.
Published: 2009 -
Cosmopolitanism, assignment duration, and expatriate adjustment: The trade-off between well-being and performance
ESMT No. 08-011
Subject(s): Human Resources Management/Organizational Behavior, Keyword(s): expatriates, international assignment, cosmopolitanism, crossculture adjustment, multinational corporations, preference persistence, assignment duration, survey method JEL Classification: D23
This paper questions the notion that expatriates should adjust to their host country, by showing that adjustment and its consequences are affected by cosmopolitanism and expected assignment duration. A study of 260 expatriates in the U.S. reveals that cosmopolitans expecting shorter (longer) assignments adjust more (less) to both work and non-work aspects of their host country, and that this is associated with increased well-being. In contrast, for non-cosmopolitans, more well-being occurs when longer (shorter) expected assignments are accompanied by increased (decreased) work and non-work adjustment. Further, from the findings emerges a clash between two aspects of successful expatriation - well-being and professional success: while non-work adjustment is not always associated with well-being, work adjustment is positively related to assignment performance across conditions and subjects.
Published: 2008 -
Ambiguity aversion and the power of established brands
ESMT No. 07-005
Published in Management Science 55(12): 1993-1941.
Subject(s): Management Sciences, Decision Sciences & Quantitative Methods, Keyword(s): branding, brand choice, consumer behavior, decision making under uncertainty JEL Classification: C91, D10, D80, M31
This paper investigates situations where a sizable sub-set of consumers prefer an inferior (dominated) offer made by an established brand to a superior (dominating) offer made by a less-established brand. Established brands are those for which consumers hold more confident beliefs concerning overall quality. Through a series of eight experiments, we test the hypothesis that the preference for a dominated established brand is linked to ambiguity aversion, a seemingly unrelated pattern of choice behavior between monetary gambles. We first show a correlation between ambiguity aversion and the preference for dominated established brands. We then demonstrate that the preference for established brands is enhanced when ambiguity aversion is made more salient in unrelated preceding choices. To further study the ambiguity-reducing properties of established brands, the last experiments assign brand names to monetary gambles, and it appears that (a priori unrelated) established brand names increase the likelihood of choosing ambiguous gambles. Overall, this research argues that brand equity for longstanding brands derives (at least in part) from consumers' tendency to avoid ambiguity.
Published: 2007 -
An empirical approach to understanding privacy valuation
Harvard Business School No. 07-075
Subject(s): Ethics & Social Responsibility, Knowledge, Information & Comms System Management, Technology, R&D Management Keyword(s): privacy, experiments
The purpose of this paper is to detect the presence of sophisticated economic motives behind individual concerns for privacy. Recent theories of privacy demands in commercial contexts have assumed an economically aware and sophisticated consumer, capable of evaluating the indirect consequences of information transmission. We present evidence, from a large-scale experiment evoking a realistic context, that privacy concerns are indeed sensitive to the indirect consequences of information transmission.
Published: 2007
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