Faculty & Research

Pradeep K. Chintagunta

Joseph T. and Bernice S. Lewis Distinguished Service Professor of Marketing

Phone :
(773) 702-8015
Address :
5807 South Woodlawn Avenue
Chicago, IL 60637

Pradeep K. Chintagunta conducts research into the analysis of household purchase behavior, pharmaceutical markets, and technology products. "A lot of my early research was with scanner panel data trying to understand how consumers respond to different marketing activities of firms - prices, promotions, advertising, etc.," explained Chintagunta. "My research has expanded in two directions - one was to expand the domain beyond CPG products to pharmaceuticals and technology products and the other was to go beyond the consumer to other players in the broader 'ecosystem' to obtain a more holistic view of the effects of marketing."

Chintagunta is on the advisory editorial board of Marketing Science, and is the Editor of Quantitative Marketing and Economics. His research has appeared in the Journal of Marketing Research, Marketing Science, Management Science, the International Journal of Research Marketing, the Journal of the American Statistical Association, and the Journal of Econometrics

In addition to being a finalist for the O'Dell award in both 1996 and 2001, Chintagunta is the recipient of the Hillel J. Einhorn Award for Excellence in Teaching and has been named one of the Chicago Booth's top professors by BusinessWeek.

"Teaching across programs such as full-time, evening, weekend, XP, and international XP exposes me to a variety of perspectives and experiences that I can then integrate into my subsequent teaching and research." He hopes his students learn that there is always more progress to be made.

He earned a bachelor's degree in mechanical engineering from Banaras Hindu University in 1984, a postgraduate diploma in management from the Indian Institute of Management in 1986, and a PhD in marketing from Northwestern University in 1990. In addition to teaching at Chicago Booth, he has taught courses at the Harvard Business School and the S.C. Johnson Graduate School of Management at Cornell University. He joined the Chicago Booth faculty in 1995.

Pradeep serves on the advisory boards of Operation ASHA and MuSigma. He collects vintage electronics, enjoys traveling, movies, and spending time with his family.

 

2013 - 2014 Course Schedule

Number Name Quarter
37000 Marketing Strategy 2014 (Winter)
37601 Marketing Workshop 2014 (Spring)
37800 Marketing Management 2014 (Spring)
37882 Marketing Strategy Simulation 2013 (Fall)
37902 Foundations of Advanced Quantitative Marketing 2014 (Winter)

2014 - 2015 Course Schedule

Number Name Quarter
37000 Marketing Strategy 2015 (Winter)
37800 Marketing Management 2015 (Spring)
37902 Foundations of Advanced Quantitative Marketing 2015 (Winter)

Research Activities

Analysis of household purchase behavior; pharmaceutical markets; technology products.

New Drug Diffusion when Forward-Looking Physicians Learn from Patient Feedback and Detailing (with Ron Goettler and Minki Kim), Journal of Marketing Research (forthcoming).

Investigating brand preferences across social groups and consumption contexts (with Minki Kim), Quantitative Marketing & Economics (forthcoming).

Quantifying Transaction Costs in Online and Offline Grocery Channel Choice (with Junhong Chu and Javier Cebollada), Marketing Science (forthcoming).

A Pre-Diffusion Growth Model of Intentions and Purchase (with Jonathan Lee), Journal of the Academy of Marketing Science, (40:137–154 (2012).

Effect of Marketing Contacts in Business Markets (with V. Kumar, S. Sriram and Anita Luo), Marketing Science, Vol. 30, No. 5, pp. 924–940 (September–October 2011).

For a listing of research publications please visit ’s university library listing page.

REVISION: Simultaneous or Sequential? Search Strategies in the U.S. Auto Insurance Industry
Date Posted: May  01, 2014
We show that the search method consumers use when resolving uncertainty in the prices of alter- natives is identified in data where consumers’ consideration sets (but not sequence of searches), prices for the considered alternatives and market-wide price distributions are observed. The search method is identified by different patterns of actual prices in consumers’ consideration sets across search methods. We also provide a new estimation approach for the sequential search model; com- plementing earlier work that has estimated a simultaneous search model with such data. Using a novel data set on consumer shopping behavior in the U.S. auto insurance industry that contains in- formation on consideration sets and choices, we find that the pattern of actual prices in consumers’ consideration sets are consistent with consumers searching simultaneously. Our counterfactuals show that the largest insurance companies are better off in terms of market share when consumers search sequentially, ...

REVISION: Service Quality Variability and Termination Behavior
Date Posted: Mar  20, 2014
While researchers have documented a positive relationship between the average quality of a service and customer retention, the effect of variability on customer retention has been viewed more ambiguously in the literature. We investigate the roles of the level and variability in quality in the context of a new video on demand service in driving customer retention. We find that while high average quality helps in retaining customers, high variability leads to higher termination rates. Apart from these main effects, we empirically document the presence of an interaction effect between average service quality and its variability on termination rates; customers who experience low variability are more responsive to mean quality compared to those experiencing high variability. As an extreme outcome, at the lower end of the quality spectrum, customers experiencing high variability have a higher retention rate than those experiencing low variability; this is contrary to what the main effect ...

New: Advertising Spillovers: Drug Detailing in Combination Therapy
Date Posted: Mar  08, 2014
A growing literature has investigated various sources of advertising spillovers. Spillover can be across markets within a brand, across related brands within a firm, across rival brands, and across media and channels. Using the empirical context of combination therapy in the pharmaceutical industry, we examine advertising spillovers when products from different firms are consumed as a bundle. With data from the HIV/AIDS category, we first provide reduced-form evidence for the nature of relationships that exist among the various drugs. We then estimate a formal hierarchical Bayesian logit model across treatment regimens to investigate how the detailing effort for one drug spills over to related drugs. Spillover effects create a tradeoff for the firm – increased detailing of one’s own drug benefits sales of that drug but also those of other drugs in the combination. The latter effect could lead to free riding by the drug benefitting from the spillover. We numerically solve a dynamic ...

New: Editorial — Marketing Science: A Strategic Review
Date Posted: Nov  12, 2013
Marketing Science is in a great competitive position with a strong editorial board and infrastructure support. This editorial summarizes the state of the journal as perceived by its stakeholders. They believe that the journal should strive to remain a premier international journal and embrace diverse topics, methods, and foci. It should continue to draw upon allied fields while being open to the various methods and philosophies as recognized in those fields. It should strive to avoid silos and embrace applications and relevance while not sacrificing rigor. The path may not be easy, but we can move forward successfully. We highlight potential threats to success and recommend how the journal might overcome those threats.

REVISION: New Drug Diffusion When Forward-Looking Physicians Learn from Patient Feedback and Detailing
Date Posted: Sep  18, 2013
We study physicians' prescription choices when uncertainty about drug efficacy is resolved through two channels: firms' marketing activities (e.g., detailing) and patients' experiences with the drugs. We first provide empirical evidence that suggests the well-understood information incentive for physicians to experiment with new drugs is reduced when physicians anticipate future detailing. Increased detailing activity therefore triggers opposing forces: adoption is hastened as physicians become informed (assuming priors are initially low), and slows as they reduce experimentation and instead obtain information from detailing at no cost. We then estimate a dynamic Bayesian learning model that embodies these trade-offs using physician-level data on prescription choices and detailing received in the months surrounding the introduction of two erectile dysfunction drugs, Levitra and Cialis. Detailing elasticities are lower when physicians anticipate changes in detailing activity than ...

REVISION: Impact of Competition on Product Quality Provision: Case of the Motion Picture Exhibitors
Date Posted: Feb  25, 2013
We study product quality choice as a competitive tool to answer two related questions. What is the impact of competition on the quality provision of firms? How does the ability to adjust quality impact business stealing? We present empirical evidence of quality responses to market structure changes in the movie exhibition industry. We show that competitive incentives, all else constant, exert an upward pressure on quality. The incumbent's quality response to entry is negative if the entrant is o

REVISION: Wireless Carriers’ Exclusive Handset Arrangements: An Empirical Look at the iPhone
Date Posted: Feb  18, 2013
Since the Apple iPhone’s first launch in 2007 with an exclusive arrangement with AT&T, it has garnered overwhelmingly positive responses from consumers and from the media. With its success, exclusive contracts between handset makers and wireless carriers have come under increasing scrutiny by regulators and lawmakers. Such practices have been criticized by regulators, by the media, and by “locked-out” consumers, due to the fact that a consumer has to subscribe to a particular service provi

REVISION: Blogs, Advertising and Local-Market Movie Box-Office Performance
Date Posted: Feb  14, 2013
We measure the effects of pre- and post-release blog volume, blog valence and advertising on the performance of 75 movies in 208 geographic markets of the U.S. We attribute the variation in blog effects across markets to differences in demographic characteristics of markets combined with differences across demographic groups in their access and exposure to blogs as well as their responsiveness conditional on access. We study the effects of pre-release factors on opening day box-office performanc

New: Quantifying Transaction Costs in Online/Off-Line Grocery Channel Choice
Date Posted: Oct  24, 2012
Households incur transaction costs when choosing among off-line stores for grocery purchases. They may incur additional transaction costs when buying groceries online versus off-line. We integrate the various transaction costs into a channel choice framework and empirically quantify the relative transaction costs when households choose between the online and off-line channels of the same grocery chain. The key challenges in quantifying these costs are (i) the complexity of channel choice decisio

New: Investigating Brand Preferences Across Social Groups and Consumption Contexts
Date Posted: Apr  28, 2012
Using a unique dataset on U.S. beer consumption, we investigate brand preferences of consumers across various social group and context related consumption scenarios (“scenarios”). As sufficient data are not available for each scenario, understanding these preferences requires us to share information across scenarios. Our proposed modeling framework has two main building blocks. The first is a standard continuous random coefficients logit model that the framework reduces to in the absence of info

New: Wireless Carriers’ Exclusive Handset Arrangements: An Empirical Look at the iPhone
Date Posted: Nov  21, 2011
Since the Apple iPhone’s launch in 2007 in an exclusive arrangement with AT&T, it has garnered overwhelmingly positive responses from consumers and from the media. With its success, exclusive contracts between handset makers and wireless carriers have come under increasing scrutiny by regulators and lawmakers. Such practices have been criticized by regulators, by the media, and by “locked-out” consumers, due to the fact that a consumer has to subscribe to a particular service provider if he or s

REVISION: Quantifying Transaction Costs in Online/Offline Grocery Channel Choice
Date Posted: Sep  01, 2011
Households incur transaction costs when choosing among offline stores for grocery purchases. They may incur additional transaction costs when buying groceries online versus offline. We integrate the various transaction costs into a channel choice framework and empirically quantify the relative transaction costs when households choose between the online and offline channels of the same grocery chain. The key challenges in quantifying these costs are (i) the complexity of channel choice decision,

New: Roi Implications for Pharmaceutical Promotional Expenditures: The Role of Marketing Mix Interactions
Date Posted: Jun  05, 2011
In recent years, pharmaceutical companies have increased their promotional expenditures, particularly on direct to consumer advertising (DTC) and detailing. Given the large dollar amounts involved, this study focuses on the likely effect of these expenditures on a firm's revenues. More specifically, using data from a category of pharmaceutical products, the study empirically explores the impact of interactions between pairs of marketing mix elements on ROI. The findings of this study from the

New: The Role of Self Selection, Usage Uncertainty and Learning in the Demand for Local Telephone Service
Date Posted: Jun  04, 2011
elephone services are often characterized by the presence of ‘fixed’ plans, involving only a fixed monthly fee, as well as ‘measured’ plans, with both fixed fees and per-unit charges for usage. Consumers are faced with the decisions of which plan to choose and how much to use the phone and these decisions are not, in general, independent. Due to the presence of a time lag between plan choice and usage decisions, consumers are uncertain about usage at the plan-choice stage. We develop a structura

REVISION: Marketing Models of Consumer Demand
Date Posted: Mar  02, 2011
Marketing researchers have used models of consumer demand to forecast future sales; to describe and test theories of consumer behavior; and to measure the response to marketing interventions. The basic framework typically starts from microfoundations of expected utility theory to obtain a statistical system that describes consumers’ choices over available options, and to thus characterize product demand. The basic model has been augmented significantly to account for quantity choice decisions; t

REVISION: A New Multivariate Count Data Model to Study Multi-Category Physician Prescription Behavior
Date Posted: Feb  03, 2011
Multivariate count models represent a natural way of accommodating data from multiple product categories when the dependent variable in each category is represented by a positive integer. In this paper, we propose a new simultaneous equation multi-category count data model – the Poisson-lognormal simultaneous equation model – that allows for the Poisson parameter in one equation to be a function of the Poisson parameters in other equations. While generally applicable to any situation where simul

New: Marketing Models of Consumer Demand
Date Posted: Dec  04, 2010
Marketing researchers have used models of consumer demand to forecast future sales; to describe and test theories of consumer behavior; and to measure the response to marketing interventions. The basic framework typically starts from microfoundations of expected utility theory to obtain a statistical system that describes consumers' choices over available options, and to thus characterize product demand. The basic model has been augmented significantly to account for quantity choice decisions; t

REVISION: The Effects of Online User Reviews on Movie Box-Office Performance: Accounting for Sequential Rollou
Date Posted: Mar  01, 2010
Our objective in this paper is to measure the impact of national online user reviews (valence, volume and variance) on Designated Market Area (DMA) level local geographic box-office performance of movies. We account for three complications with analyses that use national level aggregate box-office data – (i) aggregation across heterogeneous markets (“spatial aggregation”); (ii) serial correlation due to sequential release of movies (“endogenous rollout”); and (iii) serial correlation due to othe

REVISION: Complementarities and the Demand for Home Broadband Internet Services
Date Posted: Feb  26, 2009
Before the deregulation of Digital Subscriber Line (DSL) services by the FCC in 2005, phone companies were required to share their DSL bandwidth with independent DSL providers. However, despite the large number of independent providers that entered the market, phone companies accounted for 95.3% of all DSL subscribers in 2005. A common explanation for this is based on supply-side factors such as the costs faced by these providers to lease the telephone lines from the phone companies with whom th

REVISION: Investigating Consumer Adoption of Related Technology Products
Date Posted: Feb  26, 2009
We present a framework for modeling consumer adoption of multiple categories of technology products that may be related as complements (or substitutes). The context of technology products as well as the relationship between categories poses some unique challenges. First, the declining prices (and the corresponding increase in quality levels) over time imply that consumers anticipate these changes and make a trade-off between adopting the product early on and consuming the product for a longer ti

New: Information, Learning, and Drug Diffusion: The Case of Cox-2 Inhibitors
Date Posted: Sep  05, 2008
The recent withdrawal of Cox-2 Inhibitors has generated debate on the role of information in drug diffusion: can the market learn the efficacy of new drugs, or does it depend solely on manufacturer advertising and FDA updates? In this study, we use a novel data set to study the diffusion of three Cox-2 Inhibitors - Celebrex, Vioxx and Bextra - before the Vioxx withdrawal. Our study has two unique features: first, we observe each patient's reported satisfaction after consuming a drug. This patien

REVISION: Accounting for Primary and Secondary Demand Effects with Aggregate Data
Date Posted: Jun  11, 2008
Discrete choice models of aggregate demand, such as the random coefficients logit, can handle large differentiated products categories parsimoniously while still providing flexible substitution patterns. However, the discrete choice assumption may not be appropriate for many categories in which we expect consumers may purchase more than one unit of the selected item. We derive the aggregate demand system corresponding to a discrete/continuous household-level model of demand. We also propose a Me

Structural Modeling in Marketing: Review and Assessment
Date Posted: Apr  22, 2008
The recent marketing literature reflects a growing interest in structural models, stemming from: 1) the desire to test a variety of behavioral theories with market data, and 2) recent developments that facilitate estimation of and inference for these models. Whether one should always go through the effort of developing such tightly parameterized models with the associated computational burden of estimating them, and whether it pays off to make strict behavioral assumptions in terms of better dec

Recovering SKU-level Preferences and Response Sensitivities from Market Share Models Estimated on It...
Date Posted: Apr  22, 2008
We propose an alternative approach to obtaining SKU-level preferences and response sensitivities. An attribute-level model in which the unit of analysis is the market share for an alternative created by aggregation e.g., Colgate toothpaste) is distinguished from a truly disaggregate SKU-level model and develop an analytical relationship between parameters obtained from these two models is established. We show that the researcher can recover SKU-level parameters via calculation from estimated att

Estimating an SKU-level Brand Choice Model Combining Household Panel Data and Store Data
Date Posted: Apr  22, 2008
The extant literature using household scanner data to estimate consumer choice models has identified two key sources of bias in estimated mean responses to marketing variables. Omitted heterogeneity may bias mean responses towards zero. At the same time, omitted time-varying characteristics of alternatives that influence consumer choices may also bias mean responses towards zero if these characteristics are correlated with observed factors such as price - the endogeneity bias. Both these issu

Response Modeling with Non-random Marketing Mix Variables
Date Posted: Apr  22, 2008
Sales response models are widely used as the basis for optimizing the marketing mix or for allocation of the sales force. Response models condition on the observed marketing mix variables and focus on the specification of the distribution of observed sales given marketing mix activities. These models fail to recognize that the levels of the marketing mix variables are often chosen with at least partial knowledge of the response parameters in the conditional model. This means that, contrary to

Time Varying Competition
Date Posted: Apr  22, 2008
Normative models typically suggest that prices rise in periods of high demand and cost. Yet in many markets, prices fall when demand or costs rise. This inconsistency occurs because the normative models assume that competitive intensity does not change with demand and cost conditions over time. We therefore introduce the notion of time varying competition by suggesting that it is important to not account for the direct effect of demand and cost on prices (e.g., higher demand means higher prices)

Empirical Analysis of Indirect Network Effects in the Market for Personal Digital Assistants
Date Posted: Apr  22, 2008
We present a framework to measure empirically the size of indirect network effects in high-technology markets with competing incompatible technology standards. These indirect network effects arise due to inter-dependence in demand for hardware and compatible software. By modeling the joint determination of hardware sales and software availability in the market, we are able to describe the nature of demand inter-dependence and to measure the size of the indirect network effects. We apply the mode

REVISION: Tipping and Concentration in Markets with Indirect Network Effects
Date Posted: Jan  25, 2008
This paper develops a framework to measure 'tipping' - the increase in a firm's market share dominance caused by indirect network effects. Our measure compares the expected concentration in a market to the hypothetical expected concentration that would arise in the absence of indirect network effects. In practice, this measure requires a model that can predict the counter-factual market concentration under different parameter values capturing the strength of indirect network effects. We build su

New: Nonparametric Discrete Choice Models With Unobserved Heterogeneity
Date Posted: Sep  03, 2007
In this research, we provide a new method to estimate discrete choice models with unobserved heterogeneity that can be used with either cross-sectional or panel data. The method imposes nonparametric assumptions on the systematic subutility functions and on the distributions of the unobservable random vectors and the heterogeneity parameter. The estimators are computationally feasible and strongly consistent. We provide an empirical application of the estimator to a model of store format choice.

REVISION: Quantifying the Benefits of Individual Level Targeting in the Presence of Firm Strategic Behavior
Date Posted: Jun  30, 2007
Targeting - setting marketing policy differentially for different customers or segments - is an important marketing practice. Previous approaches to quantifying the benefits from targeting have typically calibrated a response model and used the variation in response parameter estimates to compare the firm's profits under targeting schemes at different levels of aggregation. Implicit in this approach is the assumption that the data do not reflect any strategic behavior that the firm may be engage

REVISION: The Effects of Service Quality and Word of Mouth on Customer Acquisition, Retention and Usage
Date Posted: Apr  10, 2007
This paper documents the existence of the direct and indirect (via word-of-mouth) effects of service quality on new customer acquisition, usage and retention using behavioral data from the launch of a new video on demand type service. For this technology, service quality - the quality of the signal determining the number of movies available for viewing - is exogenously determined and objectively measured. This information, coupled with location and neighborhood information for each subscriber a

New: Diffusion of New Pharmaceutical Drugs in Developing and Developed Nations
Date Posted: Nov  17, 2006
In the context of introducing new products around the world, it is important to understand the relative attractiveness of various countries in terms of maximum penetration potential and diffusion speed. In this paper, we examine these market characteristics for a new category of prescription drugs in both developing and developed countries. Using data from fifteen countries, and a logistic specification in the Hierarchical Bayesian framework, we report the differences in diffusion speed and maxi

Banner Advertising as a Customer Retention Tool in Customer Relationship Management
Date Posted: Jan  05, 2006
One of the major advances of the digital economy is the facilitation of building and managing individual customer relationships - a process usually referred to as "customer relationship management" or CRM. For a typical web site selling frequently-purchased consumer items, the most important stage of CRM is customer retention. This is because the long-term viability of a website is based on its ability to retain a significant customer base. In this study, we focus on a hitherto unexplored questi

Effects of Brand Preference, Product Attributes, and Marketing Mix Variables in Technology Product M
Date Posted: Nov  04, 2005
We develop a demand model for technology products that captures the effect of changes in the portfolio of models offered by a brand as well as the influence of the dynamics in its intrinsic preference on that brand's performance. In order to account for the potential correlation in the preferences of models offered by a particular brand, we use a nested logit model with the brand (e.g., Sony) at the upper level and its various models (e.g., Mavica, FD, DSC, etc.) at the lower level of the nest.

Empirical Analysis of Indirect Network Effects in the Market for Personal Digital Assistants
Date Posted: Mar  15, 2004
We present a framework to measure empirically the size of indirect network effects in high-technology markets with competing incompatible technology standards. These indirect network effects arise due to inter-dependence in demand for hardware and compatible software. By modeling the joint determination of hardware sales and software availability in the market, we are able to describe the nature of demand inter-dependence and to measure the size of the indirect network effects. We apply the mode

The Informative versus Persuasive Role of Marketing Communication in New Product Categories: An Appl...
Date Posted: Dec  08, 2003
Marketing communication plays a major role in influencing consumer purchases in new product categories. An important question about this communication is whether it plays an informative or a persuasive role over the life cycle of the new product category. We expect that consumers are not well informed about product quality in the early stages of the product life cycle but they become better informed over time. The informative role of marketing communication is likely to have a much larger effe

Empirical Analysis of Competitive Product Line Pricing Decisions: Lead, Follow, or Move Together?
Date Posted: May  04, 1998
Researchers have recently developed models for determining which market conduct best describes observed data. We apply these techniques from the "new empirical industrial organization" literature to the competitive product line pricing decision, where a firm strategically prices its brands when determining the profit-maximizing conduct in the market. Demand, cost, and market structure are estimated endogenously. Empirical results from analyzing price competition in the laundry detergent market b