Essays on nudging customers' behaviors: Evidence from online grocery shopping and crowdfunding

Na Zhang, Purdue University

Abstract

The dissertation consists of three essays that employ predictive analytics, structural modeling techniques and field experiments to understand and nudge customers’ behaviors in two types of online engagement platforms. The first one is customers’ purchase behaviors in an online grocery store and the other is customer’ contribution behaviors in a reward-based crowdfunding platform. In both contexts, we study how to actively nudge their behaviors. In Chapter 2, we investigates how, when dealing with products that are available in limited quantities, customers may be nudged to purchase them. Specifically, our main problem is to identify targeted customers to receive the limited number of coupons. We develop a Support Vector Machines (SVM) based approach to rank order customers. We conduct a field experiment in an online grocery store to evaluate how well the identified customers are nudged through information and/or couponing. We find that, in terms of the successful nudges, our SVM-based approach performed better than other approaches. We are not just focusing on nudging customers to purchase but also on nudging them to contribute. In Chapter 3, we examine how to leverage the project reward structure (PRS) to nudge backers to contribute on reward-based crowdfunding platforms. We develop a structural model of the backer’s dynamic pledging and learning behaviors. We use it to test a variety of behavioral theories of how PRS and intertemporal changes in the PRS influence backers’ pledging decisions over the course of a project’s funding period. We also use the model to run market simulations and shed lights on how to offer the PRS changes and what is the optimal timing to make such changes. Coupons often act as price discrimination tools to nudge low willingness-to-pay customers to purchase. However, in our context where there is limited product availability, strategies other than just sending coupons may be desirable. For some customers, it is sufficient that we provide information alone but no coupons. Also coupons of different discount depths might play a different role as customers might update their expectations. Particularly, in Chapter 4, we investigate the impact of different nudging strategies on customers’ purchase behaviors. We evaluate the effectiveness of those different nudging strategies via a randomized field experiment. Consistent with the prior literature, we found coupons could serve as a form of “advertisement”. Furthermore, our findings show that coupons with a low discount rate could have a longer information carryover effect than those with a higher discount one. The experiment also generated insights about when couponing as opposed to information is more effective when nudging.

Degree

Ph.D.

Advisors

Shanthikumar, Purdue University.

Subject Area

Marketing|Management|Information Technology

COinS