Nathan Yang, Assistant Professor in Marketing, selected participant in joint Quebec and China seminar Big Data and Management.
Congratulations to Yu Ma, Associate Professor in Marketing, Laurette Dubé, Professor in Marketing and Nathan Yang, Assistant Professor in Marketing, on being awarded the 2018 SSHRC Insight Grant “An Empirical Investigation of Digital Goods Consumption and Its Impact on Word-of-
Authors: Kosuke Uetake, Nathan Yang
Publication: Marketing Science, Forthcoming
We investigate the role of heterogeneous peer effects in encouraging healthy lifestyles. Our analysis revolves around one of the largest and most extensive databases about weight loss that track individual participants' meeting attendance and progress in a large national weight loss program. The main finding is that while weight loss among average performing peers has a negative effect on an individual's weight loss, the corresponding effect for the top performer among peers is positive. Furthermore, we demonstrate that our results are robust to potential issues related to selection into meetings, endogenous peer outcomes, individual unobserved heterogeneity, lagged dependent variables, and contextual effects. Ultimately, these results provide guidance about how the weight loss program should identify role models.
Authors: Jason R. Blevins, Ahmed Khwaja and Nathan Yang
Publication: Management Science, Forthcoming
We develop and estimate a dynamic game of strategic firm expansion and contraction decisions to study the role of firm size on future profitability and market dominance. Modeling firm size is important because retail chain dynamics are more richly driven by expansion and contraction than de novo entry or permanent exit. Additionally, anticipated size spillovers may influence the strategies of forward looking firms making it difficult to analyze the effects of size without explicitly accounting for these in the expectations and, hence, decisions of firms. Expansion may also be profitable for some firms while detrimental for others.
Thus, we explicitly model and allow for heterogeneity in the dynamic link between firm size and profits as well as potential for persistent brand effects through a firm-specific unobservable. As a methodological contribution, we surmount the hurdle of estimating the model by extending the Bajari, Benkard and Levin (2007) two-step procedure that circumvents solving the game. The first stage combines semi-parametric conditional choice probability estimation with a particle filter to integrate out the serially correlated unobservables.
The second stage uses a forward simulation approach to estimate the payoff parameters. Data on Canadian hamburger chains from their inception in 1970 to 2005 provides evidence of firm-specific heterogeneity in brand effects, size spillovers and persistence in profitability. This heterogeneous dynamic linkage shows how McDonald’s becomes dominant and other chains falter as they evolve, thus affecting market structure and industry concentration.
Read full article: Management Science
Unobserved heterogeneity in dynamic games: Cannibalization and preemptive entry of hamburger chains in Canada
Authors: Igami, M., Yang, N.
Publication: Quantitative Economics
Authors: Uetake, K., Yang, N.