Kristina Brecko
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My research applies empirical industrial organization techniques to unique data contexts to analyze questions relevant to academics and firms. Substantively, I am interested in questions related to product strategy (e.g., pricing, advertising, entry) and sustainability marketing.

Curriculum Vitae

Research Papers

In many durable good contexts, firms have the opportunity to price discriminate on quality by charging higher prices for the latest functionality. In the software good market, on the other hand, we often do not observe price discrimination on the latest versions, despite new versions being introduced over time. I propose that the software firm's ability to price discriminate on latest functionality is restricted by two factors: (1) the extent to which consumers value the innovation from one version to the next and (2) the extent to which legacy software products are costly for the firm to maintain. To analyze this question, I use a unique dataset on individual consumer subscriptions to a Fortune 500 firm's software products. The firm releases new product versions each year, but allows consumers to adopt the latest functionality for free. Despite this policy, descriptive analysis reveals that consumers frequently choose not to upgrade, electing to renew legacy versions of the product instead. To distinguish between the different factors driving this pattern, I develop a dynamic model of consumer choice of different product versions, renewal opportunities and upgrades. This model allows me to separately account for version usage utility, non-monetary costs of purchasing and upgrading and the heterogeneity therein. The estimates of the model reveal that although the majority of the consumers value the new versions, the high value, price insensitive consumers do not, causing it to be unprofitable for the firm to price latest functionality at a premium. Using the estimates and the structure of the model, I further describe a counterfactual that allows me to quantify how much a firm must innovate in order to be able to price new functionality at a premium when legacy versions are costly. The final counterfactual allows me to calculate the minimum legacy version cost that would cause the firm to shift from releasing distinct intertemporal versions to maintaining one continuously upgraded version of the product.

This paper investigates the effectiveness of pursuing conservation goals by promoting harm reduction, a once controversial approach to health care that aims to reduce the harmful impacts of unhealthy behaviors without promoting full abstinence or stigmatizing said behaviors. Conservation proponents often heavily promote solutions more akin to full abstinence, which do not recognize the inherent preference trade-off the heaviest users face when giving up a behavior that may be harmful to the environment, such as driving a car, eating meat and dairy or watering a lawn. We employ two sequential field experiments to market and test effectiveness of a smart irrigation controller, a lawn watering efficiency device. This solution has an ex-ante lower expected impact on conservation than turf removal, the highest impact solution in this context, but is nevertheless more aligned with the preferences of the heaviest users. We show that marketing this preference-aligned solution induces the highest adoption among the heaviest irrigators and those previously disinclined to conserve. Given these compliance patterns, our interventions lead to large and long-lasting individual and social benefits: water savings from the device recover its cost in half a year and are of the magnitude of one household's basic (indoor) water needs. We find no meaningful increase in water usage among those irrigating less and no evidence of reduced turf removal, suggesting that the harm reduction intervention grows, rather than cannibalizes, the adoption of water conservation alternatives. Our results underscore the importance of considering heterogeneous preferences when designing interventions aimed at fostering pro-social behaviors such as conservation and shed light on how to use marketing to engage the least pro-socially inclined.

Work in Progress

Place-Making or Consumer-Making: The Role of Amenities in Shaping Consumption Patterns

Preference Aligned Messaging for Water Conservation

Voluntary Disclosure of Sustainability Claims: Evidence from Consumer Packaged Goods

Water Conservation Collaboration Project: Long-Run Impact of Advertising and Durable Technology Adoption

Teaching

MKT402: Marketing Management

  • 2017-present

Introduction to marketing for students in the full-time MBA program.