The Data Center

Duncan Simester is a Professor at M.I.T.'s Sloan School of Management and the head of the Marketing Group at Sloan. His research focuses on understanding customer behavior and how firms respond to that behavior. He has consulted for a variety of corporations on pricing, marketing strategy, marketing research and related marketing issues, and has provided expert testimony regarding marketing research and the impact of marketing strategies.

In each of these studies, policies that maximize short-term outcomes lead to sub-optimal long-term outcomes. In the direct-mail promotion study, optimizing over the long-term may increase profits by as much as 40% compared to the current myopic policies.

Professor Simester's work on price cues investigates how customers form inferences about competitive prices from common marketing cues such as sale signs, price endings, installment billing offers and credit card logos. His work shows that customers are often more sensitive to these cues than to actual prices.

Professor Simester's research is often inter-disciplinary in nature, using methodologies developed in Economics or Operations Research to contribute to a marketing problem. While the projects make generalizable contributions to the academic literature, they also address problems of relevance to industry. Indeed, they rely heavily on industry participation, and often include large-scale field tests conducted with a variety of retail firms. For example, in his work on the long-term impact of stockouts. Professor Simester and his colleagues varied the response offered to over 20,000 catalog customers if they called and ordered an item that was unavailable. The firm involved immediately changed its policies upon receiving the findings.

In other research Professor Simester has examined how firms can use customer satisfaction measures in employee incentive schemes and recently studied how Continental Airlines used group incentives to raise performance. His work on marketing channels explains why procurement hinders coordination and he is currently investigating factors that contribute to channel conflict and determine the allocation of ownership in a channel relationship.

Prior to joining M.I.T. Professor Simester taught at the University of Chicago. He holds a Ph.D. in Management Science from MIT. He also has a law degree as well as graduate and undergraduate degrees in commerce from the University of Auckland, New Zealand. Admitted to the bar in 1990, he is a Barrister and Solicitor of the High Court of New Zealand.

Professor Simester has published widely and has won several awards for his research. He is an Area Editor of Marketing Science and Quantitative Marketing and Economics; an Associate Editor at Management Science; and is on the Editorial Board of the Journal of Marketing Research.

A number of research papers and other information about the work of Professor Semester are published online.