Wharton-SMU Research Center

In-House Seminar

Guest Speaker:

David R. BELL
Associate Professor of Marketing, The Wharton School, University of Pennsylvania.

Date & Venue:
Date: 18 August 2004, Wednesday
Time: 4.00pm-5.00pm
Venue: Eu Tong Sen, Level 1, Seminar Room 3,
Singapore Management University
469 Bukit Timah Road, Singapore 259756
(Location Map)

Topic:
Social Contagion and Trial on the Internet: Evidence from Online Grocery Retailing

About the Seminar:
For a traditional retailer, the size of the customer pool can evolve over time but is largely bounded in space. In contrast, an Internet retailer with the appropriate shipping infrastructure can draw customers from a wide-ranging geographical area (e.g., the entire United States). We examine the trial decision for customers shopping at an Internet grocery retailer (netgrocer.com). Drawing on literature in economics, marketing and sociology, we conjecture that exposure to the actions of spatially proximate others – either through direct social interaction or passive observation – influences
the trial decision of those who have yet to experience the service.
This idea is tested in a discrete time hazard framework in which consumer trial decisions arise from utility-maximizing behavior. Moreover, our derivation allows use of region-level data to estimate a model consistent with individual utility maximization, even in the absence of individual level covariates. We find that the marginal impact of the so-called “neighborhood e.ect” is economically meaningful as it results in an approximately fifty percent increase in the baseline hazard of trial. The e.ect is robust to the inclusion of a broad set of covariates, region-level fixed e.ects, and time-dependent heterogeneity in the baseline rate. The model is calibrated on a unique dataset spanning: (1) 29,701 residential zip codes, (2) transactions from forty-five months since the inception of the service, and (3) zip-code specific contiguity data from geographic Information System (GIS) analysis. Substantive implications for customer base evolution and Internet retailing are discussed.

Registration:
This seminar is free. Please register early. (Admission on a first-come-first-served basis.)
For registration, please click here (Registration closes on 17 August 2004, Tuesday)

Enquiries:
Ms. Lim Lih Yeng
Email: lylim@smu.edu.sg, Tel: 6822-0197
Ms. Priscilla Cheng
Email: priscillacheng@smu.edu.sg, Tel: 6822-0383