The last BizTalk session in the Fall Term featured insightful presentations on the theme of ‘Serving Individuals by Type’ by Professor Utpal BHATTACHARYA from the Department of Finance, and Professor LIN Song from the Department of Marketing.
Do Women Receive Worse Financial Advice?
Prof. Bhattacharya’s research suggests that at financial planning firms, but not at securities firms, women were more likely than men to receive advice to buy only individual or only local securities. Female clients who signaled that they were highly confident, highly risk tolerant, or had a domestic outlook, were especially likely to receive suboptimal advice. The theoretical model explains these patterns as the result of statistical discrimination interacting with advisors’ incentives. Taste-based discrimination is unlikely to explain the results. Find out more about the research here.
Two-Sided Price Discrimination by Media Platforms
An increasingly common practice among media platforms is to provide premium content versions with fewer or even no ads. This practice leads to an intriguing question: how should ad-financed media prices discriminate through versioning? Prof. Lin develops a two-sided media model and illustrates that price discrimination on one side can strengthen the incentive to discriminate on the other. Under this self-reinforcing mechanism, the ad allocations across different consumer types depend crucially on how much nuisance an ad “costs” consumers relative to the value it brings to them. Interestingly, higher-type consumers, who value content and advertising quality highly, may see more ads than lower-type consumers if the nuisance cost is relatively low. Learn more about his research here.