Eventi del

2 2017 12:45 - 14:00
Meeting room 4.E4.SR03  Via Roentgen, 1

Designing Products for Children: When the Buyer is not the User

Paulo Albuquerque, INSEAD

In children products and services, the buyer - the parent - is frequently different from its user - the child. In this paper, we model this dual-agent choice setting and the interplay between purchase and usage incentives and empirically study it in the context of online educational services for children. To explain usage and purchase decisions, we propose a structural model of a child and parent behavior, adapting the multiple discrete-continuous extreme value (MDCEV) time allocation model to our problem to account for a learning production function by the child. We then apply this approach to guide the managerial decision of offering virtual games as a reward to children for their efforts spent on learning. To maximize retention, marketers should determine how much of the child's limited time should be allocated to the core product - education, which is valued by the parents - and to the non-core product - games, especially attractive for children.  To answer this question, we estimate our model with data on daily usage of a math software by children and data on subscription renewal by their parents. Our results suggest significant heterogeneity in usage and purchase incentives, calling for a customized platform design in terms of time offerings for the education and game components.