Doctoral Student

Bhavya Mohan

Bhavya is a fifth year student in the marketing department. She studies the impact of firm transparency on consumer behavior. Bhavya graduated from Stanford University in 2006, where she received her BA in Economics and English with Honors. After graduating, she worked for the marketing analytics group at Google Inc, and the marketing strategy group at Safeway Inc.​​
Bhavya is a fifth year student in the marketing department. She studies the impact of firm transparency on consumer behavior. Bhavya graduated from Stanford University in 2006, where she received her BA in Economics and English with Honors. After graduating, she worked for the marketing analytics group at Google Inc, and the marketing strategy group at Safeway Inc.​​

Journal Articles

  1. Percentage Cost Discounts Always Beat Percentage Benefit Bonuses: Helping Consumers Evaluate Nominally Equivalent Percentage Changes

    Bhavya Mohan, Pierre Chandon and Jason Riis

    Marketing offers that are framed as a "percentage change" in consumer cost vs. benefit can have highly non-linear impacts in terms of actual value for consumers. Even though two offers might appear identical, we show that consumers are better off choosing the offer framed as a percentage cost change over one framed as the opposite percentage benefit change, regardless of whether the net result is a gain (e.g., 50% less cost is better than 50% more benefit) or a loss (e.g., 50% less benefit is worse than 50% more cost) and regardless of whether costs or benefits are in the nominator or denominator of the standard rate (cost/benefit or benefit/cost). Three lab studies and one field experiment show that a majority of consumers (and particularly those with low numeracy) fail to accurately recognize the superiority of percentage cost changes over percentage benefit changes across various tasks and contexts. Even highly numerate consumers are prone to error. However, the provision of salient standard rates can reduce consumer error.

    Citation:

    Mohan, Bhavya, Pierre Chandon, and Jason Riis. "Percentage Cost Discounts Always Beat Percentage Benefit Bonuses: Helping Consumers Evaluate Nominally Equivalent Percentage Changes."Journal of Marketing Behavior 1, no. 1 (2015): 75–107. View Details

Working Papers

  1. Paying Up for Fair Pay: Consumers Prefer Firms with Lower CEO-to-Worker Pay Ratios

    Bhavya Mohan, Michael I. Norton and Rohit Deshpandé

    Prior research examining consumer expectations of equity and price fairness has not addressed wage fairness, as measured by a firm's pay ratio. Pending legislation will require American public companies to disclose the pay ratio of CEO wage to the average employee's wage. Our six studies show that pay ratio disclosure affects purchase intention of consumers via perceptions of wage fairness. The disclosure of a retailer's high pay ratio (e.g., 1000 to 1) reduces purchase intention relative to firms with lower ratios (e.g., 5 to 1 or 60 to 1, Studies 1A, 1B, and 1C). Lower pay ratios improve consumer perceptions across a range of products at different price points (Study 2A and 2B), increase consumer ratings of both firm warmth and firm competence (Study 3), and enhance perceptions of Democrats and Independents without alienating Republican consumers (Study 4). A firm with a high ratio must offer a 50% price discount to garner as favorable consumer impressions as a firm that charges full price but features a lower ratio (Study 5).

    Keywords: pay ratio; wage fairness; purchase intention; customers; financial disclosure;

    Citation:

    Mohan, Bhavya, Michael I. Norton, and Rohit Deshpandé. "Paying Up for Fair Pay: Consumers Prefer Firms with Lower CEO-to-Worker Pay Ratios." Harvard Business School Working Paper, No. 15-091, May 2015. View Details
  2. Lifting the Veil: The Benefits of Cost Transparency

    Bhavya Mohan, Ryan W. Buell and Leslie K. John

    A firm's costs are typically tightly-guarded secrets. However, across a field study and six laboratory experiments we identify when and why firms benefit from revealing unit cost information to consumers. A natural field experiment conducted with an online retailer suggests that cost transparency boosts sales. Six subsequent controlled lab experiments replicate this basic effect (Studies 2-6) and provide evidence for why it occurs: just as interpersonal disclosure of intimate information increases attraction, cost transparency by a firm increases brand attraction, in turn boosting consumer purchase interest. This relationship persists even after controlling for perceptions of price fairness and product quality (Study 3). Study 4 suggests that the beneficial effect of cost transparency holds when firms spend more on "less desirable" costs relative to "more desirable" costs. Studies 5-6 show that the effect of cost transparency weakens when high profit margins are made salient. Finally, Study 7 shows that the beneficial effect reverses (i.e. cost transparency backfires) when it is revealed that a firm's profit margins are high relative to those of its competitors.

    Keywords: cost transparency; operational transparency; purchase intentions; brand attraction; customers; Cost; Corporate Disclosure; Marketing;

    Citation:

    Mohan, Bhavya, Ryan W. Buell, and Leslie K. John. "Lifting the Veil: The Benefits of Cost Transparency." Harvard Business School Working Paper, No. 15-017, September 2014. (Revised May 2015.) View Details