Essays on Communication in Marketing

Date of Award

Spring 1-1-2025

Document Type

Dissertation

Degree Name

Doctor of Philosophy (PhD)

Department

Management

First Advisor

Shin, Jiwoong

Abstract

Communication fundamentally influences consumer decision-making and firm success across various contexts. This dissertation explores three key instances of communication in marketing: the design of query-based recommender systems, the role of advertising content in advertising, and the strategic disclosure of information on social media platforms. The first essay presents a model for designing recommended choice sets based on consumer queries, where a firm can either distribute its recommendations across multiple subcategories (breadth) or concentrate them within the predicted preferred subcategory of a consumer (depth) . We demonstrate that the optimal design hinges on factors such as the accuracy of the firm's consumer preference predictions, consumer decision thresholds, the firm's relative market power, differences between subcategories, and variance in product match values relative to decision thresholds. Our findings reveal that greater prediction accuracy and higher consumer decision thresholds favor depth, whereas higher relative market power and larger differences between subcategories require a focus on breadth. Additionally, when variance in match values within the consumer's preferred subcategory rises, firms prioritize depth for low decision thresholds and breadth for high thresholds. The second essay explores the role of advertising content with a focus on messenger selection, where advertising can generate product-match signals for consumers. We consider advertising as a problem of Bayesian persuasion with costly information processing, where the type of communication messenger is costless to observe and determines the information structure consumers will face, thereby affecting their attention decisions. Messengers are classified as high-type or low-type based on their likelihood of generating positive signals about product match. Our findings highlight that the optimal choice of messengers depends on their signal elasticities and the firm's decision on whether to induce consumer attention. In particular, we find that when it is crucial to raise prices and high-type messengers overshadow the product match value by providing generally positive signals, a low-type messenger can effectively capture consumer attention and persuade them to pay a higher premium. The third essay investigates how users' private expertise and incentives shape their selective sharing of verifiable information on social media platforms. We present a framework for signaling unverifiable expertise through verifiable evidence disclosure, considering different sender motivations. Within this framework, a positive post about an issue may indicate that an expert also holds private positive information, and vice versa. We show that greater access to evidence can reduce the informational value of communication for the receiver. Furthermore, when the receiver’s decisions depend on expertise signaling and the sender has a low reputation, strong reputational concerns can hinder communication. However, if expertise signaling is not critical to the receiver or the sender has a strong reputation, reputational concerns can restore effective communication for highly biased senders. Together, these essays offer a comprehensive perspective on how communication mechanisms—whether through query-based recommender systems, advertising content, or interpersonal communication—shape consumer behavior and market outcomes, offering valuable implications for firms, advertisers, and platform designers or regulators to optimize their strategies in an increasingly information-driven marketplace.

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