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Understanding Social Effects in the In-Flight Marketplace: Characterization and Managerial Implications

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  • Gardete, Pedro M.

    (Stanford University)

Abstract

This paper investigates the in-flight marketplace. It uses detailed data of inflight purchases to understand social effects in purchase behavior, and determine their potential for designing marketing promotions. We find that on average a passenger is approximately 30% more likely to buy after being exposed to a lateral purchase. Analyses on the underlying mechanisms reveal that the classical social influence theories do not suffice to explain all the patterns in the data. Omission neglect, product contagion and goal balancing are proposed as complementary theories. Finally, we find that consumers' willingness-to-buy is positively correlated with responsiveness to social influence. Because of this homophily and social feedback effects, classically seen as nuisances, can provide targeting value for the firm. Taking them into account in behavioral-based targeting can up to double the social spillovers of marketing actions.

Suggested Citation

  • Gardete, Pedro M., 2014. "Understanding Social Effects in the In-Flight Marketplace: Characterization and Managerial Implications," Research Papers 3134, Stanford University, Graduate School of Business.
    • Handle: RePEc:ecl:stabus:3134
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    File URL: http://www.gsb.stanford.edu/faculty-research/working-papers/social-effects-flight-marketplace-characterization-managerial
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