Organization and Strategy Seminar（2019-19）

Topic: Why Advertising Safety isn’t Safe? Limited Attention and Consumers’ Negative Responses to Product Quality Information

Speaker: Juan Ma,INSEAD

Time: Friday, 27 December, 10:00-11:30 am

Location: Room 217 , Guanghua Building 2

Abstract:

Many countries regulate the quality of food and drugs, yet it remains unclear whether markets can self-regulate in the absence of regulation, notably where businesses can gain a strategic advantage by advertising the superior quality of their products. We present evidence from two field experiments in China’s infant formula industry, which has seen a consumer trust crisis after the melamine scandal. We show that disclosure of product quality information has a negative impact on consumers’ purchase decisions and self-reported trust in the industry. We draw on the behavioral literature and interpret such a result as information draws consumers’ attention to product safety risks. Our study suggests that reassuring product safety, the most intuitive strategic response to safety scandals, may not offer a strategic advantage to high-quality producers and allow the market to self-regulate.

Introduction:

Juan Ma is an Assistant Professor of Strategy at INSEAD. Her research tackles institutional distrust, the collective distrust in business institutions due to rampant rent-seeking and corruption, as well as its implications on firm behaviour. Using emerging economies as an empirical window, one stream of her work tackles product market failures, examining the collective scepticism and distrust in product market institutions in the context of product safety scandals. Another stream of her work studies institutional corruption in financial markets, with a focus on the rent-seeking behaviour of board directors and securities regulators. Professor Ma’s work has been published in reputed academic journals, including theStrategic Management Journal, and cited by media outlets including theFinancial TimesandForbes.

Professor Ma earned a doctorate in Business Administration with a specialisation in Strategy from Harvard University, and received the Wyss Award for outstanding doctoral dissertation in business administration, as well as the Weiss Family Program Fund for outstanding research in development economics. She holds a bachelor degree in Business Economics from the University of Toronto, and in 2011, received the Governor General’s Silver Medal.

Professor Ma is a global competitiveness advisor to companies across the world, as well as governments and non-profit organisations including Industry Canada and the Department of Foreign Affairs and International Trade (DFAIT) Canada. Before pursuing her doctorate, she advised DFAIT Canada as an economist.

Professor Ma was born in Nanjing, China, and speaks English, Mandarin, and Cantonese.

//www.insead.edu/faculty-research/faculty/juan-ma

Your participation is warmly welcomed!