Marketing Seminar (2019-26)

Topic: The Mnemonomics of Contract Overchoice

Speaker: Liang Guo, Professor, The Chinese University of Hong Kong

Time: Friday, 29 Nov, 13:30-15:00

Location: Room K02, Guanghua Building 2

Abstract:

Consumers may systematically overchoose contracts that seem ex post suboptimal. This is typically interpreted as evidence for naivety about present-biased preference. We offer an alternative theory of contract overchoice as optimal response to limited memory. Motives underlying contract choice maybe forgotten. As ex ante screening facilitates subsequent retrospection, a front-loaded contract maybe favored as self-motivating instrument for future consumptions. In the absence of ex ante sorting, memory constraint would yield endogenous overconsumption that can nevertheless be self-regulated by a back-loaded contract. Furthermore, equilibrium market response to memory management can restore social welfare and improve consumer surplus.

Introduction:

Liang Guo is a Professor of Marketing at The Chinese University of Hong Kong (CUHK) Business School. He received a PhD in Business Administration from University of California at Berkeley, and a BA in Economics from Beijing University. His research interests include economics of psychology, marketing strategy, industrial organization, and applied economics. His research work has been accepted for publication at the Journal of Economics and Management Strategy, Journal of Marketing Research, Management Science, Marketing Science, and Productions and Operations Management. He is on the editorial board of Marketing Science, and serves as the Associate Editor for Quantitative Marketing and Economics and Management Science. He was named the “MSI Young Scholar” in 2009, and the “Cheung Kong Chair Professor” in 2015.

Your participation is warmly welcomed!