Research Expertise: Pricing strategies, sales-force compensation, pharmaceutical industry, structural modeling
Assistant Professor Renna Jiang’s research interests are inspired by various challenges that researchers and practitioners face. Her doctoral dissertation looked at the issue of optimal contracting when a principal hires an agent to undertake certain actions its behalf. For example, a manufacturer can hire an independent sales organization (sales reps) to sell products in return for a commission. “I explored whether commission rates are set at the optimal level, and if not, what are the economic consequences,” said Jiang.
In her model, salespeople had better information than the manufacturer about opportunities in the field. “The empirical results show that optimal commission rates are higher than what are observed in the data,” she reported. “Manufacturers could achieve greater profits by increasing their rates.”
In another line of research, Jiang reflects upon the recent withdrawal of two Cox-2 inhibitor pain killers (Vioxx and Bextra; only Celebrex remains on the market), and asks if the market—patients—learn the efficacy of new drugs, or does it depend solely on manufacturer advertising and FDA updates. Jiang reports that “the market is indeed able to learn. Prescription choice is sensitive to many sources of information, from direct reports of patient satisfaction to doctor recommendations, newspaper articles, FDA updates and advertising.”
Jiang is also interested in methodological issues, and has explored how more efficient statistical procedures for analyzing economic problems may be developed. She proposes a Bayesian approach for analyzing aggregate level sales data in a market with differentiated products to help managers make more profitable pricing decisions.
Jiang earned her Ph.D. in marketing and an MBA at the University of Chicago, Booth School of Business. She did her undergraduate studies in economics at Tsinghua University in Beijing, China. Her research has been published in Quantitative Marketing and Economics and the Journal of Econometrics. Jiang has presented at seminars at the Booth School of Business, University of Chicago, New York University’s Stern School of Business and at the INFORMS Marketing Science Conference.