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 358
5807 South Woodlawn Avenue
Chicago, IL 60637

Curriculum vitae

Publications

"Consumer Heterogeneity and Paid Search Effectiveness: A Large Scale Field Experiment" with Thomas Blake and Steven Tadelis. forthcoming, Econometrica.

Coverage: Slate; The Atlantic; Economist; Harvard Busines Review; BBC

Internet advertising has been the fastest growing advertising channel in recent years with paid search ads comprising the bulk of this revenue. We present results from a series of large-scale field experiments done at eBay that were designed to measure the causal effectiveness of paid search ads. Because search clicks and purchase intent are correlated, we show that returns from paid search are a fraction of non-experimental estimates. As an extreme case, we show that brand-keyword ads have no measurable short-term benefits. For non-brand keywords we find that new and infrequent users are positively influenced by ads but that more frequent users whose purchasing behavior is not influenced by ads account for most of the advertising expenses, resulting in average returns that are negative.

"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

"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.

"The Limits of Reputation in Platform Markets: An Empirical Analysis and Field Experiment"

An excellent summary: Digitopoly

We argue that reputation mechanisms used by platform markets suffer from two problems. First, buyers may draw conclusions about the quality of the platform from single transactions, causing a reputational externality across sellers. Second, for a variety of reasons we discuss, reputations will be biased. We document these problems using eBay data and claim that platforms can benefit from identifying and promoting higher quality sellers. We create an unobservable measure of seller quality and demonstrate the benefits of our approach through a controlled experiment that prioritizes better quality sellers. We highlight the importance of reputational externalities and chart an agenda that aims to create more realistic models of platform markets.

Current Research


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