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Becker Friedman Institute Data Acquisition Grant, 2019
Wharton Customer Analytics Data Grant, 2019
Joseph A. And Susan. E. Pichler PhD Fellowship, 2018
Selected Publications
Kong, X., Dubé, J.-P., and Alwan, V. (2026). The identification of the dynamic discrete-choice model with stockpiling. Marketing Science, in press.
Abstract
We study the identification of the discount factor for dynamic discrete-choice (DDC) models of demand with stockpiling of a storable good. We show that the DDC has built-in exclusion restrictions that set-identify the discount factor without requiring any auxiliary assumptions. We compare this approach to previous work that assumes auxiliary structure on the storage cost function, clarifying how such structure generates exclusion restrictions and the corresponding data moments used for identification. Our key results show that these auxiliary restrictions are not necessary for identification; but that they are testable and can be included to achieve point identification and improve statistical efficiency. Using a case study of laundry detergent from earlier published work, we find a mean discount factor estimate of 0.957, rejecting myopic models of choice in favor of the dynamic model. In counterfactual simulations, we show that some of the promotional lift during a discount period is indeed due to forward-buying. However, we predict considerably higher incremental sales compared to a standard discrete-choice model, which predicts that promotional discounts mainly cause substitution between brands. These results contribute to the long-standing discussion about the effectiveness of price promotions.
Firms often display product information on their front-of-package labels with some firms going as far as to make deceptive claims. We study the impact of the “Made in USA” claim—a disclosure not legally required on consumer-packaged goods and yet a claim highlighted by many firms, sometimes deceptively—on consumer demand. Leveraging the Federal Trade Commission’s investigation of four brands that resulted in removal of the claim from product packages, we study the impact such removal had on sales. We find a decline in demand following the removal of the “Made in USA” claim. Second, to ensure complete exogenous variation, we conduct a field experiment on eBay, on which we run more than 900 auctions, varying only whether a product contains this country-of-origin information. We find that, although products with the “Made in USA” claim have a slightly higher chance of drawing a zero valuation, such products obtain a 44% higher willingness-to-pay conditional on a positive valuation. However, this increased valuation is insufficient to economically justify firm relocation efforts. Auction transaction prices, on the other hand, are significantly and 28% higher with the claim, suggesting resellers and auctioneers have incentives to display the claim. The experiments alongside observational data allow us to rationalize firms’ incentives in making deceptive country-of-origin claims.
