Two Essays on Retailing and Political Advertising Strategy
- Author(s): Shanmugam, Ravi Kumar
- Advisor(s): Iyer, Ganesh
- et al.
Essay A ("Anchor Store Quality and Competition in Shopping Malls"): The ability of shopping centers to attract customers and increase sales depends in part on their anchor stores, the small number of large-sized, high-profile tenants located in every mall. In this paper, I develop a theoretical model of competition between anchor and non-anchor stores in a shopping mall, with the goal of explaining an observed pattern of choices of anchor-store quality levels made by mall developers. In particular, I examine the relationship between a mall's anchor-store quality levels, size, and measures of mall performance (visitor traffic and revenues). I find that mall size, because of its relationship to the probability that consumers will find a "fit" between their preferences and the non-anchor store's goods, has varying effects on price competition between the stores, visitor traffic, mall revenues, and anchor quality levels chosen by mall developers. The primary analytical result is that mall size has a positive and concave, i.e. inverse U-shaped, relationship with the probability that the developer chooses a high-quality anchor over a low-quality one. I then validate the predictions of this model using a data set containing information about key strategic variables for major North American malls, showing that the proposed relationships are robust to the inclusion of inter-mall competitive effects and additional relevant controls.
Essay B ("Negative Advertising and Voter Choice"): Negative advertising in political campaigns has been especially timely in recent years, given the increased presence of negative advertising with each successive U.S. election cycle. Using data containing detailed information from both voter surveys and automated ad monitoring, we model choices made by both voters and candidates in U.S. House and Presidential elections in 2000. On the voter side, we model and estimate both voter candidate choice as well as voter turnout, and find that negative advertising has a positive effect both on voter turnout and on the likelihood of voting for the candidate sponsoring the ad. We then examine the campaign's choice of negative advertising and the manner in which it is related to various voter and market characteristics. The key findings are that negative advertising is more likely to be chosen when the cost of advertising is low, when races are closer, when the candidate is a "challenger" rather than an incumbent, and when the voter market is less educated, which makes it less likely that there will be greater scrutiny of candidates by voters.