How Changes in the House Advantages of Reel Slots Affect Game Performance

backgammon-2488089_1920[We’re pleased to welcome authors Dr. Anthony F. Lucas of the University of Nevada and Katherine Spilde of San Diego State University. They recently published an article in Cornell Hospitality Quarterly entitled “How Changes in the House Advantages of Reel Slots Affect Game Performance,” which is currently free to read for a limited time. Below, they reflect on the inspiration for conducting this research:]

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Our motivation for this research stemmed from inquiries regarding extant policies for par selection and from the results of our previous research projects. Our prior work suggested that the highly skewed outcome distributions of modern slot machines would obscure even considerable differences in programmed casino advantages (i.e., pars), especially given the limited number of trials produced by individual players. In spite of these results, many industry stakeholders and casino operators contended that experienced players from high-visitation segments would be able to detect such differences over time. It was for these reasons that we decided to conduct the longitudinal field study with data collected from venues relying on a repeat clientele.

Our work is the first to focus on the longitudinal effects of par on unit-level game performance, within live casino settings. The results of our study were surprising in a couple ways. First, the high par games outperformed their low par counterparts, in terms of theoretical win. This surprised many operators who believed that frequent players would quickly recognize the value of the low par games, which were located a mere three feet away. Second, there was a lack of evidence of play migration, i.e., from the high par games to the low par games. The time series analyses failed to indicate a statistically significant and positive change in the magnitude of differences for both daily coin-in and theoretical win levels, over the sample periods. That is, the data failed to indicate a growing recognition of the differences in pars. If players were able to detect such differences we would expect to see both increased play and theoretical win levels on the low par game, over time. We would also expect to see simultaneous decreases in the same metrics on the high par game. To the contrary, these difference metrics remained stable within each two-game pairing, in spite of the clear economic disincentive for players to risk and lose bankroll to the game with the greater par.

Our results present an empirical challenged to the innervate wisdom regarding player hypersensitivity to par settings. Other slot operating paradigms related to “price” positioning and revenue optimization strategies are also contradicted by our findings. Because these all represent critical operating platforms, we are not sure how this work will ultimately impact the gaming industry. In large part, it depends on the willingness of those within it to re-examine longstanding beliefs and predispositions, and place evidence above instinct. While we expect some operators to accelerate in-house experimentation, it is likely that many will wait for future research, which we have in the pipeline.

It should be noted that without the cooperation of willing casino operators this research cannot be completed. They deserve a great deal of credit for bringing this work to light. Open minds bring positive change.

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The Impact of FSMA on Restaurants

restaurant-2623071_1920[We’re pleased to welcome author Mark Johnson of Michigan State University. He recently published an article in Cornell Hospitality Quarterly entitled “An End User Perspective: The Impact of FSMA on Restaurants,” which is currently free to read for a limited time. Below, Dr. Johnson talks about the background of this research:]

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On January 4, 2011, President Obama signed into law the Food Safety Modernization Act (FSMA or P.L. 111-353). This act may be the most far-reaching food safety legislation since the Food, Drug and Cosmetics Act of 1938 (FDCA). FSMA aims to ensure that the U.S. food supply is safe by shifting the focus of regulation from contamination response to prevention. This legislation imposes administrative costs on the food supply chain in the U.S. by requiring additional record keeping and safety procedures.

The law created record keeping requirements for firms. These requirements are often referred to as one-up-one-down. This nickname emphasizes the fact that the act requires grocers, wholesalers, and food processors to keep track of the immediate parties that they buy food and food products from as well as the parties that they sell food and food products too. This ensures that any contamination problems in the U.S. food supply chain can quickly and efficiently be traced to its source and aid in the rapid response to foodborne illness before it becomes widespread. The Congressional Budget office (August 12, 2010) estimated that FSMA would directly cost taxpayers $1.4 Billion through federal administrative costs. However, attempts to measure the costs imposed on businesses by the legislation were largely ignored until we reported, in a previous study, that expected costs to food processors, wholesalers and grocers was approximately 10% of equity value (Johnson and Lawson 2016). This represented a market value cost of $33 Billion. This previous result encouraged me to consider that others in the food supply chain, end users, such as consumers and restaurants may bear some of these supply chain costs.

The surprising evidence from my current article indicates that restaurants lost approximately 5% of firm value. In this case of restaurants this represents approximately 7.5 billion dollars of lost value. These equity costs represent expected future cash flow and risk effects for the firms studied. These costs, 1.4+33+7.5= $42B, should be weighed against the potential benefits to consumers that the act brings. These benefits may be directly measurable in a potential drop in food borne illness cases over the next 5-10 years as the act is fully implemented.

Previous article:
The Impact of the Food Safety and Modernization Act on Firm Value,” M. Johnson and T. Lawson, Agricultural Finance Review, 2016, 76(2): 233-245.
Current article:
An End User Perspective: The Impact of FSMA on Restaurants,” M. Johnson, Cornell Hospitality Quarterly, Forthcoming

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Kitchen photo attributed to StockSnap. (CC)

The Bias of Size in Gambling Decisions: Evidence from a Casino Game Hierarchy

backgammon-2488089_1920[We’re pleased to welcome author Lawrence Hoc Nang Fong, Davis Ka Choi Fong, Robin Chark, Peter Man Wai Chui of the University of Macau. They recently published an article in Cornell Hospitality Quarterly entitled “The Bias of Size in Gambling Decisions: Evidence from a Casino Game,” which is currently free to read for a limited time. Below, Dr. Wang reflects on the inspiration for conducting this research:]

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What motivated you to pursue this research?
This study stems from the authors’ observations of Cussec players in casinos. As gamblers strive to predict the outcome based on previous outcome pattern shown on the screen which is attached to the table, is there any other hint they are trying to locate? While the Chinese characters “Big” and “Small” are clearly displayed on the screen, they can be the hint. Our feeling is that gamblers would incline to bet on “Big” as it sounds more positive than “Small” and they may intrinsically link “Big” to win which is the positive outcome in gambling. Given this speculation, we’ve tried to find whether there had been a study about the said phenomenon, but we got nothing. We think this topic deserves documentation in the literature and thus initiated this research.

In what ways is your research innovative, and how do you think it will impact the field?
Cognitive bias has been a popular research agenda for decades. The bias of size, to our best understanding, remains unexamined. We believe that this study opens a new research stream of cognitive bias in gambling. Future research may examine the questions that we raised at the end of the paper:
“Is the bias maintained if the cue is physical size? In the gambling context, will an outcome option with a larger area on the table layout signal a higher chance of winning?”

What is the most important/ influential piece of scholarship you’ve read in the last year?
Peetz and Soliman’s (2016) paper entitled “Big money: The effect of money size on value perceptions and saving motivation” is an importance piece of work that sheds light to our study. They found that a picture of money with larger size was perceived as more valuable. While gambling is an activity overwhelmed by monetary reward, the mental link between “Big” and win (money as reward) is not unreasonable. We felt blessed to discover and read Peetz and Soliman’s paper.

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Breaking Bad Habits: How Marketing Incentives Can Lead to Healthy Food Choices

9153746729_9fb261fcdf_zThe rise of processed foods in the past century has brought with it a rising tide of health concerns. Obesity, heart disease, and diabetes have all been linked to diets high in fat, sodium, and sugar, leading many to seek out healthier alternatives. But making the switch from cookies and potato chips to broccoli and apples is easier said than done–so how can consumers start to make better food choices? A recent article from published in Cornell Hospitality Quarterlyentitled “McHealthy: How Marketing Incentives Influence Healthy Food Choices” delves into how certain marketing incentives can help consumers break their unhealthy habits and make better choices. Authors Elisa K. Chan, Robert Kwortnik, and Brian Wansink specifically compare the efficacy of behavioral rewards versus financial discounts in motivating individuals to change their eating habits. The abstract for the article:

Food choices are often habitual, which can perpetuate Current Issue Coverunhealthy behaviors; that is, selection of foods high in sodium, saturated fat, and calories. This article extends previous research by examining how marketing incentives can encourage healthy food choices. Building on research examining marketing incentives, temporal goals, and habitual behavior, this research shows that certain incentives (behavioral rewards vs. financial discounts) affect individuals with healthy and less healthy eating habits differently. A field study conducted at a corporate cafeteria and three lab studies converge on a consistent finding: The effects of marketing incentives on healthy food choice are particularly prominent for people who have less healthy eating habits. Results showed that behavioral rewards generated a 28.5% (vs. 5.5%) increase in salad sales; behavioral rewards also led to 2 pounds more weight loss for individuals with less healthy eating habits. The research offers important implications for scholars, the food industry, consumers, governments, and policy makers.

You can read “McHealthy: How Marketing Incentives Influence Healthy Food Choices” from Cornell Hospitality Quarterly free for the next two weeks by clicking here. Want to stay current on all of the latest research from Cornell Hospitality QuarterlyClick here to sign up for e-alerts!

*Image attributed to Sonny Abesamis (CC)

Do Consumers Avoid Genetically Modified Wines?

25725080022_cd89993d82_z[We’re pleased to welcome Christina Chi of Washington State University. Christina recently published an article in Cornell Hospitality Quarterly entitled “Ready to Embrace Genetically Modified Wines? The Role of Knowledge Exposure and Intrinsic Wine Attributes” with co-authors Lu Lu of Washington State University and Imran Rahman of Auburn University.]

  • What inspired you to be interested in this topic?

The consumption of genetically modified (GM) products is one of the most debatable and significant issues that influence consumers’ purchase behaviors and dining trends. As a critical component of hospitality business, alcoholic beverages (e.g., wines) are highly influential on guests’ dining experience and business revenues. However, existing research provides little insight concerning consumers’ experience with GM wines and their purchase decisions. Therefore, we were inspired to open up a research avenue in this area.

  • Were there findings that were surprising to you?

What slightly surprised us was the strength of aroma and taste in wine drinkers’ decision making. Our study reveals that consumers’ decision making is solely driven by wines’ aroma and taste, which override health or environmental concerns. This finding is critical for wine sellers to better understand the importance of different wine attributes in influencing wine appreciation and purchase decision making.

  • How do you see this study influencing future research and/or practice?

CQ CoverIn addition to opening up a significant but underexplored research stream, this study highlights the rigor of using experimental approach and sensory techniques to understand the behavioral dynamics of experiential products, which may not be fully captured using self-report surveys. More importantly, this research delivers timely strategies for the industry against the backdrop of labeling GM products and offers an in-depth analysis of wine drinkers’ behavior involving conflicts of choice.

The abstract for the paper:

This study examines whether knowledge exposure and supreme wine attributes such as appearance, aroma, taste, and hangover avoidance influence consumers’ quality evaluation and purchase intentions of genetically modified (GM) wines. We conducted two experimental studies in two different settings involving a total of 321 subjects. Results indicate that educating consumers with knowledge on GM wines efficiently reduces the fear caused by GM identity. Importantly, the desirable organoleptic and functional performances of GM wines not only reduce consumers’ concerns with GM products but also enable GM wines to surpass conventional options that are less salient in these performances. Specifically, consumers would choose a GM wine over traditional options if the GM wine has a superior appearance and the ability to eliminate a hangover. Furthermore, consumers express equal acceptance of GM wines and traditional counterparts when there are no differences in aroma and taste. This research delivers significant implications for wine marketing through examining a timely and controversial subject matter.

You can read “Ready to Embrace Genetically Modified Wines? The Role of Knowledge Exposure and Intrinsic Wine Attributes” from Cornell Hospitality Quarterly free for the next two weeks by clicking here. Want to know all about the latest research from Cornell Hospitality QuarterlyClick here to sign up for e-alerts!

*Wine image attributed to James Petts (CC)

Christina Geng-Qing Chi is an associate professor at the School of Hospitality Business Management in the Carson College of Business, Washington State University. Her area of research includes tourism marketing, hospitality/tourism consumer behavior and sustainability in tourism/ hospitality industry. Her research has been published broadly in top tier tourism/hospitality journals and presented at numerous hospitality/tourism conferences. Dr. Chi serves on the editorial boards for several hospitality/tourism journals and reviews papers for top tier hospitality/tourism journals.

Imran Rahman is an Assistant Professor in the department of Nutrition, Dietetics, and Hospitality Management at Auburn University, Auburn, Alabama, USA. His current research program focuses on sustainability in the hospitality industry with an emphasis on consumer behavior in green hotels. He is also actively researching in food and beverage emphasizing primarily on wine consumer behavior.

Lu Lu is a Ph.D. candidate and instructor of School of Hospitality Business Management, Carson College of Business at Washington State University. Her research interests encompass consumer behavior in food and beverage consumption, culture and tourists’ destination experience and complaining efforts.

Diversify and Conquer: An Argument for Reinvigorating Marketing Science with Behavioral Science and Humanities

[We’re pleased to welcome Gerald Zaltman of Harvard Business School and Olson Zaltman Associates. Dr. Zaltman recently published an article in Cornell Hospitality Quarterly with co-authors Jerry Olson and James Forr of Olson Zaltman Associates, entitled “Toward a New Marketing Science for Hospitality Managers.”]

In “Toward a New Marketing Science for Hospitality Managers,” published in the Cornell Hospitality Quarterly, Jerry Olson, James Forr, and I point out that much of CQ_57_1_Cover.inddmarketing research and a great deal of marketing thought and action is influenced by the ideas and methods of an old marketing science.  We argue that a New Marketing Science is needed in which scientifically sound ideas and methods from the behavioral sciences and humanities are integrated around a coherent scientific perspective.  We feel this is especially important since life in the marketplace is experienced holistically and not in the silo like ways that companies, universities, and specific professions are organized.

Although current marketing does explore new ideas and methods, including neuro/biometric methods and big data approaches, these ideas are often treated piecemeal — used in isolation or as independent add-ons to more traditional work.  In contrast, we advocate integrating the best ideas and approaches from diverse fields to develop a new marketing science.  In “Toward a New Marketing Science” we focus on how key ideas from the mind sciences can produce a deeper and richer understanding of the minds of customers and also the minds of managers.  Other fields containing equally exciting marketing related advances include, linguistics, anthropology, sociology, philosophy, ethnomusicology, and art therapy, to name a few.

We provide four examples of applying a New Marketing Science approach to create emotionally resonant hospitality experiences.  However, the principles of a NMS can be applied to any marketing problem in any industry.  Practicing the NMS requires bold, imaginative thinking that goes beyond simple borrowing of ideas and imitation of best practices.

The abstract:

A New Marketing Science (NMS) is proposed that can dramatically improve a firm’s marketplace performance. The NMS challenges managers to dare to think and act differently. It generates deep insights into the thoughts and actions of both customers and managers and how the two mind-sets interact. As several examples illustrate, it departs from the “old” marketing science by its emphasis on imagination, knowing how and why a practice works, understanding the total customer experience, and focus on effectiveness over efficiency. The NMS is grounded in principles from the behavioral sciences and humanities such as the importance of the unconscious mind, the way mental frames serve as interpretative lenses, the centrality of emotions, the reconstructive nature of memory, and the importance of metaphor for learning about and influencing choices.

You can read “Toward a New Marketing Science for Hospitality Managers” from Cornell Hospitality Quarterly free for the next two weeks by clicking here. Want to know all about the latest research from Cornell Hospitality Quarterly? Click here to sign up for e-alerts!


 
Gerald ZaltmanGerald Zaltman is Founding partner in Olson Zaltman Associates and the Joseph C. Wilson Professor of Business Administration Emeritus at Harvard Business School, where he also was co-director of The Mind of the Market Laboratory. He has authored over 20 books including: How Customers Think: Essential Insights into the Mind of the Market and Marketing Metaphoria: What Deep Metaphors Reveal about the Minds of Consumers.

Jerry OlsonJerry Olson is Founding Partner in Olson Zaltman Associates and Professor Emeritus at Penn State University’s Smeal College of Business where he was Earl P. Strong Professor of Marketing and Department Chair. He has published more than 60 papers on these topics in conference proceedings and academic journals , including Journal of Consumer Research, Journal of Marketing Research, and Journal of Marketing.

James ForrJames Forr is a director at Olson Zaltman Associates. He has led projects for Fortune 100 clients including IBM, Bank of America, PepsiCo, and P&G along with non-profit and public sector clients such as the AFL-CIO and the Funeral Service Foundation.  He also has led two projects that have helped clients win prestigious Ogilvy Awards from the Advertising Research Foundation.

 

A Focus on High-Quality Research

[Editor’s Note: We are pleased to reproduce Michael LaTour’s editorial from the most recent issue of Cornell Hospitality Quarterly.]

cqx coverMore than ever before, the quality of academic research is crucial for both journals and authors. Of course, impact factors are a reflection of this. But let us dig deeper. Does the article take a sophisticated reader on a well-crafted journey? Imagine examining an expensive handmade wallet that “unfolds” beautifully and impresses the holder with its carefully thought-through construction. Analogous to such, hypotheses should be theoretically rich and elegant. Measures should be not only appropriate but also optimal. Methodology should impress and should Captureflow like a symphony. Data should be rich and robust. Finally, artful discussion should whet our appetites for more research to come in the future. Not a small task, but certainly worth the outcome. Hence, I ask prospective authors to send their best work to Cornell Hospitality Quarterly (CQ) and impress us as I have outlined.

Read Michael LaTour’s editorial from the May issue of Cornell Hospitality Quarterly for free by clicking here. Don’t forget to click here to sign up for e-alerts and get all the latest from Cornell Hospitality Quarterly.