Ayelet Israeli - Faculty & Research - Harvard Business School
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Ayelet Israeli

Assistant Professor of Business Administration


Ayelet Israeli is an assistant professor of business administration in the Marketing Unit. She teaches the Marketing course in the MBA required curriculum.

In her research, Professor Israeli focuses on pricing and pricing policies, channel management, and online marketing. Her research has been published in Marketing Science and Journal of Marketing Research. Her dissertation won the 2014 INFORMS Society for Marketing Science Doctoral Dissertation Proposal Award, and her work has been cited by The Wall Street JournalThe Atlantic, and MSN Money.

Professor Israeli received her PhD in marketing from the Kellogg School of Management at Northwestern University. She holds an MBA from the Hebrew University of Jerusalem, where she also earned her MSc and BSc in computer science. In addition to her academic experience, Professor Israeli served as a lieutenant in the Intelligence Corps of the Israeli Defense Forces and worked as an engineer at Israel Aerospace Industries and at Intel Corporation in Israel.

Journal Articles
  1. Online MAP Enforcement: Evidence from a Quasi-Experiment

    Ayelet Israeli

    This paper investigates a manufacturer’s ability to influence compliance rates among its authorized online retailers by exploiting changes in the Minimum Advertised Price (MAP) policy and in dealer agreements. MAP is a pricing policy widely used by manufacturers to influence prices set by their downstream partners. A MAP policy imposes a lower bound on advertised prices, subjecting violating retailers to punishments such as termination of distribution agreements. Despite this threat, violations are common. I uncover two key elements to improve compliance: customization to the online environment and credible monitoring and punishments. I analyze the pricing, enforcement, and channel management policies of a manufacturer over several years. During this period, new channel policies take effect, providing a quasi-experiment. The new policies lead to substantially fewer violations. With improved compliance, channel prices increase by 2% without loss in volume. The reduction in violations is particularly stark among authorized retailers with lower sales volume, those that previously operated unapproved websites and those that have received violation notifications for the specific product before. Moreover, low service providers improve their service. At the same time, there is an increase in opportunistic behavior among top retailers, retailers that received notifications for other products, and for less popular products via deep discounting.

    Keywords: Pricing policies; pricing; channel management; legal aspects of business; retail; Price; Policy; Governance Compliance; Distribution Channels; Management; Retail Industry;

    Citation:

    Israeli, Ayelet. "Online MAP Enforcement: Evidence from a Quasi-Experiment." Marketing Science (forthcoming).  View Details
  2. Repairing the Damage: The Effect of Price Knowledge and Gender on Auto-Repair Price Quotes

    Meghan Busse, Ayelet Israeli and Florian Zettelmeyer

    In this paper we investigate whether sellers treat consumers differently on the basis of how well informed consumers appear to be. We implement a large-scale field experiment in which callers request price quotes from automotive repair shops. We show that sellers alter their initial price quotes depending on whether consumers appear to be correctly informed, uninformed, or misinformed about market prices. We find that repair shops quote higher prices to callers who cite a higher benchmark price. We find that women are quoted higher prices than men when callers signal that they are uninformed about market prices. However, gender differences disappear when callers mention a benchmark price for the repair. Finally, we find that repair shops are more likely to offer a price concession if asked to do so by a woman than a man.

    Keywords: pricing; price discrimination; information; internet; gender; Automobiles; field experiment; Information; Fairness; Price; Knowledge Use and Leverage; Internet; Gender; Service Industry; Auto Industry;

    Citation:

    Busse, Meghan, Ayelet Israeli, and Florian Zettelmeyer. "Repairing the Damage: The Effect of Price Knowledge and Gender on Auto-Repair Price Quotes." Journal of Marketing Research (JMR) 54, no. 1 (February 2017): 75–95.  View Details
  3. Minimum Advertised Pricing: Patterns of Violation in Competitive Retail Markets

    Ayelet Israeli, Eric Anderson and Anne Coughlan

    Manufacturers in many industries frequently use vertical price policies, such as minimum advertised price (MAP), to influence prices set by downstream retailers. Although manufacturers expect retail partners to comply with MAP policies, violations of MAP are common in practice. In this research, we document and explain both the extent and the depth of MAP policy violations. We also shed light on how retailers vary in their propensity to violate MAP policies and the depth by which they do so. Our inductive research approach documents managerial wisdom about MAP practices. We confront these insights from practice with a large empirical study that includes hundreds of products sold through hundreds of retailers. Consistent with managerial wisdom, we find that authorized retailers are more likely to comply with MAP than are unauthorized partners. By contrast to managerial wisdom, we find that authorized and unauthorized markets are largely separate, and that violations in the authorized channel have a small association with violations in the unauthorized channel. Last, we link our results to the literatures on agency theory, transaction cost analysis, and theories of price obfuscation.

    Keywords: Pricing policies; pricing; channel management; legal aspects of business; Price; Governance Compliance; Marketing Channels; Retail Industry;

    Citation:

    Israeli, Ayelet, Eric Anderson, and Anne Coughlan. "Minimum Advertised Pricing: Patterns of Violation in Competitive Retail Markets." Marketing Science 35, no. 4 (July–August 2016): 539–564. (Lead article.)  View Details
Cases and Teaching Materials
  1. Predicting Consumer Tastes with Big Data at Gap

    Ayelet Israeli and Jill Avery

    CEO Art Peck was eliminating his creative directors for The Gap, Old Navy, and Banana Republic brands and promoting a collective creative ecosystem fueled by the input of big data. Rather than relying on artistic vision, Peck wanted the company to use the mining of big data obtained from Google Analytics and the company's own sales and customer databases to select the next season's assortment. Peck was betting that intelligence fueled by big data could outperform a fashion industry creative director at predicting the future fashion trends and tastes of consumers.

    Keywords: marketing; marketing strategy; Brands; Brand & product management; big data; "marketing analytics"; consumer behavior; predictive analytics; Forecasting; preferences; Marketing channels; operation management; Distribution Channels; Marketing; Marketing Channels; Marketing Strategy; Brands and Branding; Forecasting and Prediction; Data and Data Sets; Retail Industry; Fashion Industry; Apparel and Accessories Industry; United States; North America;

    Citation:

    Israeli, Ayelet, and Jill Avery. "Predicting Consumer Tastes with Big Data at Gap." Harvard Business School Teaching Note 518-053, November 2017.  View Details
  2. Predicting Consumer Tastes with Big Data at Gap

    Ayelet Israeli and Jill Avery

    CEO Art Peck was eliminating his creative directors for The Gap, Old Navy, and Banana Republic brands and promoting a collective creative ecosystem fueled by the input of big data. Rather than relying on artistic vision, Peck wanted the company to use the mining of big data obtained from Google Analytics and the company’s own sales and customer databases to select the next season’s assortment. Peck was betting that intelligence fueled by big data could outperform a fashion industry creative director at predicting the future fashion trends and tastes of consumers.

    Keywords: marketing; marketing strategy; retailing; brands and branding; consumer behavior; Preference elicitation; big data; predictive analytics; artificial intelligence; e-commerce; fashion; Marketing; Marketing Strategy; Marketing Channels; Brands and Branding; Consumer Behavior; Demand and Consumers; Data and Data Sets; Forecasting and Prediction; Apparel and Accessories Industry; Consumer Products Industry; Fashion Industry; Retail Industry; United States; Canada; North America;

    Citation:

    Israeli, Ayelet, and Jill Avery. "Predicting Consumer Tastes with Big Data at Gap." Harvard Business School Case 517-115, May 2017. (Revised March 2018.)  View Details
  3. Angie's List: Ratings Pioneer Turns 20

    Robert J. Dolan and Ayelet Israeli

    In 1995, before people “googled” or “yelped,” Angela Hicks (HBS, 2000) was establishing her Angie’s List as a pioneer in the accumulation and dissemination of consumer rating information. Hicks focused on the home repair and maintenance market and, as she put it, “particularly on high cost of failure situations where good information on potential service providers is correspondingly of high value.” Angie's List had a paid subscription model as it charged “members” for access to the information they collectively provided on service providers. More recently, companies such as Yelp, TripAdvisor, and Google have started offering free access to their reviews while relying totally on site advertising and service provider fees for their revenues. In 2015, Angie's List collected close to $68 million in membership fees. In January 2016, with recent declines in the growth rate of member numbers, Angie’s List has to decide if it was time to drop the “paid subscription for all” model and introduce a free version of its service to its product line.

    Keywords: pricing; Pricing strategy; service industry; services; product line management; Growth; Conjoint Analysis; Market research; freemium; growth strategy; Business Model; Internet; Business Growth and Maturation; Service Industry;

    Citation:

    Dolan, Robert J., and Ayelet Israeli. "Angie's List: Ratings Pioneer Turns 20." Harvard Business School Case 517-016, September 2016. (Revised February 2017.)  View Details