While on a research visit to the University of Zurich, Professor Dr. Luxi Shen from CUHK will be giving a research talk to the group members.

“The Fun and Function of Uncertainty”

How do people behave under uncertainty? Specifically, how do consumers respond to incentives associated with exogenous uncertainty (e.g., a loyalty reward of $10 or $20 with even chances)? Both lay intuition and decision theories expect uncertainty aversion. However, I found that under specific circumstances, uncertainty can be motivating. In those predictable situations, consumers work harder under an uncertain incentive than under a certain incentive, even when the uncertain incentive ($10 or $20 with even chances) is strictly worse than the certain incentive ($20 for sure). I further propose a theoretical framework to reconcile “uncertainty loving” that I found in my research with “uncertainty aversion” in extant behavioral decision-making literature. This theoretical framework sheds light on why people behave differently under uncertainty under different circumstances. 

Bio

Luxi Shen (PhD, University of Chicago Booth School of Business) studies judgment and decision-making, and consumer behavior. Her recent research focuses on the general topic of uncertainty in pricing strategies, incentive designs, and investment decisions. For example, she explores when and why consumers expend more effort to earn an uncertain reward than a certain reward. Shen’s work has been published in top academic journals, including the Journal of Consumer Research, the Journal of Marketing Research, Management Science, Psychological Science, and Organizational Behavior and Human Decision Processes. She was named a 2019 Young Scholar by the Marketing Science Institute for her early career achievements. She has received the runner-up of the 2015 Hillel Einhorn New Investigator Award by the Society for Judgement and Decision Making for the first essay in her doctoral dissertation (The Motivating-Uncertainty Effect, JCR, 2015) and the Honorable Mention of the 2020 Ferber Award (best dissertation-based article in the Journal of Consumer Research) by the Association for Consumer Research for the second essay in her doctoral dissertation (The Fun and Function of Uncertainty, JCR, 2018).

Shen is currently an Associate Professor of Marketing (with tenure) at CUHK Business School, the Chinese University of Hong Kong. At CUHK, she teaches Marketing Management (MBA), Strategic Marketing (IBBA), and Business Negotiation (MSc). All courses are offered in English. At the University of Chicago Booth School of Business, she has teaching experience in Marketing Management, Marketing Research, Managerial Decision Making, and Negotiations for the MBA, EMBA, and executive programs. Shen won the Faculty Teaching Merit Awards over multiple years and the 2016 Dean’s Nomination of University Education Award by CUHK Business School, and the Dean’s Performance Awards for Exceptional Service to the Executive MBA Programs over multiple years by Chicago Booth.