Scholars Seminar | "Consumer Observational Learning among Brands and Generics considering Strategic Supply" joint with Mariana Carrera - CANCELED

Friday, April 5, 2024 - 12:00pm
Online Event - Login credentials via email for registered participants

This event has been canceled and will be rescheduled at a later date!

We empirically investigate the welfare effects of providing information to consumers about their peers' choices for generic products vis a vis the brand name products in the over the counter (OTC) pharmaceutical category in a field experiment. In a first step using pre and post experimental data, we estimate structural random utility demand models separately for the pain, allergy and digestive relief categories and assume that the labels affect utility linearly. Second, given demand and assuming strategic supply retail pricing behavior we estimate welfare changes due to the information treatments in counterfactual scenarios. We reject the notion that our experimental shelf labels uniformly increased consumers attention. Instead, we detect label specific informative effects across both peer rate treatments that suggest our shelf labels rotated consumer demand for OTC products. Specifically, we estimate that the labeling treatment led to an increased valuation for the pain category when the label features the generic peer rate, while it had no significant effect when the label featured the brand peer rate. Our findings are consistent with customers valuing those labels and updating their beliefs about the quality of generic products from learning what their peers' generic purchase rate is.

This seminar is co-sponsored by the Institute for Social Science Research and the College of Social and Behavioral Sciences at the University of Massachusetts, Amherst. The ISSR Scholars Program promotes successful research and grants development for social science faculty across UMass Amherst. Dr. Villas-Boas joins us at UMass in support of her mentorship of ISSR Scholar Christoph Bauner (Resource Economics).

Sofia Villas-Boas is a professor in the Department of Agricultural and Resource Economics at U. C. Berkeley. She holds the Class of 1934 Robert Gordon Sproul Chair in Agricultural Economics. Born in Portugal in 1971 she received her Ph.D. in Economics from U. C. Berkeley in May 2002 and an undergraduate degree in Economics from the Universidade Católica Portuguesa. She teaches Econometrics in the ARE Ph. D. program and in the undergraduate major of Environmental Economics and Policy at the Rausser College of Natural Resources. She has published in top economics and field journals such as Review of Economic Studies, Rand Journal of Economics, American Journal of Agricultural Economics, Journal of Environmental Economics and Management, Marketing Science, Management Science, and Review of Economics and Statistics.

Her research interests include industrial organization, consumer behavior, food policy, and environmental regulation. Her recent empirical work estimates the effects of policies on consumer behavior, such a bottled water tax, a plastic bag ban, and a soda tax campaign and its implementation. Other published work has focused on the economics behind wholesale price discrimination banning legislation, contractual relationships along a vertical supply chain, and identifying the role of those contracts in explaining pass-through of cost shocks along the supply chain into retail prices that consumers face.