Reference groups and product line decisions: An experimental investigation of limited editions and product proliferation

Some luxury goods manufacturers offer limited editions of their products, whereas some others market multiple product lines. Researchers have found that reference groups shape consumer evaluations of these product categories. Yet little empirical research has examined how reference groups affect the product line decisions of firms. Indeed, in a field setting it is quite a challenge to isolate reference group effects from contextual effects and correlated effects. In this paper, we propose a parsimonious model that allows us to study how reference groups influence firm behavior and that lends itself to experimental analysis. With the aid of the model we investigate the behavior of consumers in a laboratory setting where we can focus on the reference group effects after controlling for the contextual and correlated effects. The experimental results show that in the presence of strong reference group effects, limited editions and multiple products can help improve firms' profits. Furthermore, the trends in the purchase decisions of our participants point to the possibility that they are capable of introspecting close to two steps of thinking at the outset of the game and then learning through reinforcement mechanisms. © 2010 INFORMS.

Different stimuli, different spatial codes: a visual map and an auditory rate code for oculomotor space in the primate superior colliculus.

Maps are a mainstay of visual, somatosensory, and motor coding in many species. However, auditory maps of space have not been reported in the primate brain. Instead, recent studies have suggested that sound location may be encoded via broadly responsive neurons whose firing rates vary roughly proportionately with sound azimuth. Within frontal space, maps and such rate codes involve different response patterns at the level of individual neurons. Maps consist of neurons exhibiting circumscribed receptive fields, whereas rate codes involve open-ended response patterns that peak in the periphery. This coding format discrepancy therefore poses a potential problem for brain regions responsible for representing both visual and auditory information. Here, we investigated the coding of auditory space in the primate superior colliculus(SC), a structure known to contain visual and oculomotor maps for guiding saccades. We report that, for visual stimuli, neurons showed circumscribed receptive fields consistent with a map, but for auditory stimuli, they had open-ended response patterns consistent with a rate or level-of-activity code for location. The discrepant response patterns were not segregated into different neural populations but occurred in the same neurons. We show that a read-out algorithm in which the site and level of SC activity both contribute to the computation of stimulus location is successful at evaluating the discrepant visual and auditory codes, and can account for subtle but systematic differences in the accuracy of auditory compared to visual saccades. This suggests that a given population of neurons can use different codes to support appropriate multimodal behavior.