Contact

Chris Nosko
Assistant Professor of Marketing

Office: (773) 834-5953

Email: chris.nosko[at]chicagobooth.edu

The University of Chicago, Booth School of Business
Room 356
5807 South Woodlawn Avenue
Chicago, IL 60637

Curriculum vitae

Publications

"Supply responses to digital distribution: Recorded music and live performances" with Julie Mortimer and Alan Sorensen. Information Economics and Policy 24 (2012) pp 3-14.

Technologies that enable free redistribution of digital goods (e.g., music, movies, software, books) can undermine sellers’ ability to profitably sell such goods, which raises concerns about the future development of socially valuable digital products. In this paper we explore the possibility that broad, illegitimate distribution of a digital good might have offsetting effects on the demand for complementary non-digital goods. We examine the impact of file-sharing on sales of recorded music and on the demand for live concert performances. We provide evidence suggesting that while file-sharing reduced album sales, it simultaneously increased demand for concerts. This effect is most pronounced for small artists, perhaps because file-sharing boosts awareness of such artists. The impact of file-sharing on large, well-known artists’ live performances is negligible.

Working Papers

"Consumer Heterogeneity and Paid Search Effectiveness: A Large Scale Field Experiment" with Thomas Blake and Steven Tadelis. Coverage: Economist; Harvard Busines Review; BBC

Internet advertising has been the fastest growing advertising channel in recent years with paid advertisements on search platforms (e.g., Google and Bing) comprising the bulk of this revenue. We present results from a series of large-scale field experiments done at eBay that are designed to detect the causal effectiveness of paid search advertisements. Results show that brand-keyword ads have no short-term benefits, and that returns from all other keywords are a fraction of conventional estimates. We find that new and infrequent users are positively influenced by ads but that existing loyal users whose purchasing behavior is not influenced by paid search account for most of the advertising expenses, resulting in average returns that are negative. We discuss substitution to other channels and implications for advertising decisions in large firms.

"Competition and Quality Choice in the CPU Market"

This paper uses the CPU market to study how multiproduct firms generate returns from innovation. Using a new dataset, I estimate a discrete-choice model of CPU demand and then recover estimates of the sunk cost of product introductions. I combine these estimates with a model of firm product choice to examine how product line decisions change with asymmetric technological capabilities and with the competitive environment. I use the model to show how technological leaders can use product lines as strategic weapons, isolating competition to less desirable areas of the product spectrum. I apply this insight to a large shift in technological leadership -- Intel's introduction of the Core 2 Duo -- and quantify the portion of returns that came from Intel's ability to push its principle competitor, AMD, into lower-margin product segments. I find that competition plays a key role in determining firms' product line decisions and that these decisions are important in generating returns from innovation. Ignoring endogenous product choices leads to underestimates of the social welfare losses from monopoly.

Current Research

Quality and Reputation in Two-sided Markets. Presented at University of Rochester (Simon), University of Michigan (econ), Columbia University (econ)

In many two-sided markets, buyers have imperfect information about the quality of the sellers that participate in the market. In these cases, buyers may learn about the overall distribution of seller types from the quality of their initial transactions. Bad transactions early in a buyers' tenure on the platform may cause them to not return. Because the probability of an individual buyer transacting with an individual seller again in the future is small, sellers exert externalities on each other that they don't internalize. By shirking on quality, an individual seller gains in the short run but the whole platform bears the cost of a buyer that doesn't return. Using data from a large online platform, we present evidence that buyers actively learn about the distribution of seller types. Furthermore, using a controlled experiment we show that a platform can increase profits by using unobservable (to the buyer) information about seller quality to manipulate the choice set of the buyer.


How do Consumers Search on the Internet?. Presented at the International Choice Symposium, The Sixth Conference on the Economics of Advertising and Marketing, Marketing Science