These are some of my current projects. Comments and suggestions are welcome.
The differential effects of time and usage on the brand premiums of automobiles
co-authored with Eyal Biyalogorsky and Amir Heiman, 2021.
We investigate how status and functional benefits of cars’ brands lose value over time. Theoretically, we show that brands with a higher status, or that appeal to status-conscious consumers, exhibit steeper price decline over time. Empirically, we take advantage of the phenomenon of twin cars – pairs of car models that are nearly identical from a structural and mechanical standpoint, but that are sold under differing brand names – to disentangle the effects of physical wear and tear, which should impact both the premium brand and the corresponding standard brand similarly; and time-related price decline, which should affect each brand differently. The main result is that a premium car’s price declines much faster than that of the corresponding standard car (controlling for physical condition, mileage, and initial price). This result suggests that status declines faster than do functional attributes, and status seekers tend to replace their cars earlier.
Customer salvage value: Selling and swapping customers in the mobile game industry
co-authored with Michael Haenlein and Barak Libai, 2020.
Taking a customer as an asset approach, we focus on the emerging practice of firms in the mobile game industry to transfer customers to other brands by proactively churning them via outside advertising, or by swapping customers with another firm via cross-promotion. We show how customer satiation - a well observed phenomenon for mobile games and for other hedonic experiences - drives the creation of an "inside market" where firms can sell and swap customers, in addition to the option of classic customer acquisition from outside markets such as Google and Facebook. Thus, in addition to their lifetime value, customers will have a "salvage value" that stems from the ability to transfer them when they are satiated. Looking at the joint interests of customer buyers and sellers among games, we examine when buyers will acquire a customer from an outside market, or else purchase a customer or swap in an inside market. We show how the quality of conversion in outside and inside markets combined with satiation intensity drives the market dynamics and the salvage value of customers, explain other phenomena prevalent in the mobile game industry such as blacklisting and clustering of games, and discuss the managerial implications.