Wendy Liu
Wendy Liu, associate professor of marketing and Jerome Katzin Fellow at the Rady School of Management, is a trailblazing researcher with a deep and longstanding interest in consumer decision making. Her scholarship is held in high esteem by fellow scholars at Rady, and at institutions around the country and abroad.
Understanding Consumer Behavior
Questioning assumptions. Revealing insights.
Consumers of every stripe, from the top 1 percent to those struggling to make ends meet, are faced with daily decisions on how to spend their time and money.
Wendy Liu’s research spans a fascinating array of topics in consumer behavior. Is planning beneficial for you? Does self-control help you reach your goals? Does paying for a health service make it more valuable in the eyes of the consumer? How can charitable organizations succeed in garnering more donor support?
In recognition of her impressive scholarship, Liu was named Jerome Katzin Fellow in 2020. The fellowship supports Rady faculty whose research promises to extend our knowledge on how to advance the health and wellness of people and communities.
A curious student of the world
Born and raised in Beijing, Liu also spent formative years in Sydney and Berlin. Witnessing the differences in wealth, culture and economic institutions planted the seed for her later interest in economics and psychology.
“To hop around and see things — it was eye opening,” she says. “I was exposed to different people, institutions, social structures in all these places. It made me open minded, curious and interested in people. It also helped with being creative and thinking about things from a slightly different angle.”
Liu entered Stanford University as an undergrad during the dot-com boom. In an environment where everyone she met was thinking about starting a company, she gave little thought to entering academia. After graduation with dual majors in Economics and Mathematical and Computational Science, she went to work for a boutique management consulting company in the Bay Area.
As she dug into her work, Liu found herself wanting to learn more about how to approach business problems that required a deep understanding of data patterns. She audited a Ph.D. seminar on Consumer Behavior at the Stanford Graduate School of Business taught by pioneering behavioral marketing researcher Itamar Simonson. The next step was enrolling in the Ph.D. program at Stanford GSB.
While in the Ph.D. program, Liu attended the Choice Symposium, a gathering of leading scholars in human choice behavior and decision making.
“It made a huge difference. Everyone was talking about choices, how consumers think about the marketplace, how they think about products, how they make decisions. I loved every discussion.”
Economic judgment, preferences and choice became Liu’s research focus. After completing her Ph.D., she joined the UCLA Anderson School of Management faculty. She became a Rady faculty member in 2010.
Unconventional wisdom
When you examine Liu’s body of work, you will discover that she’s always questioning long-held and widely accepted notions of what’s good for the consumer.
In the paper “Is Planning Good for You? The Differential Impact of Planning on Self-Regulation,” Liu and her collaborator Claudia Townsend of the University of Miami explore the impact of planning, often promoted by life coaches, therapists and well-meaning friends and family as a tool for achieving goals, whether getting a college degree, losing a few inches around the waist or decluttering your home.
Contrary to popular belief, Liu and Townsend found that planning sometimes had the effect of derailing people from their health and financial goals. When people realized how far they were from the endpoint, even when their goal was reasonable, they were more likely to give up on what they set out to accomplish.
The findings have implications for self-control as an interventional tool in various aspects of life, says Liu.
“Our motivation system doesn’t work like that. People don’t just make a plan and carry out the plan. Self control tools need to be more sophisticated.”
Liu’s research on the emotional effects of self-control has yielded similarly fascinating insights. In her study “Grapes of Wrath: The Angry Effects of Self Control” published in the Journal of Consumer Research, Liu and fellow researcher David Gal of the University of Illinois Chicago found that exerting self-control led to broad angry behaviors such as preference for movies with anger themes and greater interest in faces exhibiting anger.
“You don’t get the pleasure and you feel resentful,” says Liu.
Time and money
A significant part of Liu’s research has focused on how people think about and spend two precious resources – time and money.
“There are two ways to think about time,” says Liu. “One way is that it’s money, it’s an economic resource. The other way is that it’s an experience that’s emotional, it’s life. It’s what you live through.”
Liu explored the question of how people perceive time and money in her study “The Happiness of Giving,” co-authored with Stanford scholar Jennifer Aaker. She found that donors give more to a charity when the initial ask is for volunteering their time.
“Because time has emotional and meaningful associations, you want to activate that when you ask for any sort of contribution. You can then follow up with asking for money.”
In another study of time and money with fellow Rady faculty member Uri Gneezy and Rady Ph.D. student Gal Simitzsky, Liu found that the way an employment opportunity is presented – as a project with a fixed lumpsum payment versus a project with a fixed number of hours of work – had an effect on how workers priced their time in exchange for money. When people were offered fixed hours, they were less likely to be concerned with the nature of the work to be performed, whether enjoyable or painful. On the other hand, when the money offered was fixed, their focus shifted to how they spent their time and the nature of the work and became more sensitive to whether the work is enjoyable or painful.
As a result, for jobs of larger scale and of greater pain, workers tend to put a higher price on their time under contracts defined by lumpsum pay compared to those defined by fixed hours.
“This paper speaks to how we should be thinking about time for workers,” says Liu. “When the work time is presented as fixed, it may diminish wellbeing for the worker due to their neglect of the nature of the work. Ideally you want the worker to be sensitive to whether the work is interesting or tedious.”
A teacher who’s making a difference
Ever vigilant about industry trends in marketing and the needs of hiring companies, Liu has structured the M.B.A. elective she teaches on consumer behavior as a class on customer insights, a vital function in companies today. She provides her students with a framework of discussion for what data and insights companies need and how they should interpret results.
“I make it really interactive. It’s very much a discussion with students. You are always debating various aspects of the problem. At the same time, it’s not a free-thinking exercise. It’s a nice combination of disciplined thinking and making judgement calls.”
Liu also teaches the Ph.D. class in consumer behavior.“I try to embody the philosophy that I teach. All of us in the marketing department do a really good job of showing students what it’s like to do cutting edge research in marketing.”
Liu frequently hears from her former students who are thriving in private industry, academia and in their own entrepreneurial ventures. They are messages of gratitude for what they learned in her classes.
“I couldn’t be happier. You can’t beat that,” says Liu with a smile that lights up her face. “That’s the most gratifying part of the job – to see the difference you have made in your students. That’s what we are here for.”
What is it about the Rady School that Liu finds most appealing?“People here have a very youthful energy that I love. It goes with our entrepreneurial spirit. There’s real friendliness, an openness in our culture. At the same time everyone is super smart and engaged in research and teaching. They are always interested in each other’s work. It’s a very vibrant intellectual environment.”
Liu has served on various committees at Rady as well as the broader UC San Diego community. She is a sought-after speaker at national and international marketing conferences. Currently on the UC San Diego Arts Communications Advisory Committee, Liu is working with colleagues in the Arts to create a website and communication strategy to better promote the visual and performing arts of the university.
“I like having a concrete impact. Being useful to a good cause is very satisfying. I am interacting with all these artists, musicians and faculty in the arts departments and I get to put on my Mad Men hat, my marketer hat. It’s great to be able to help people and use your expertise to make a difference.”
Health Matters
Looking ahead, Liu wants to build on her research in health care. She’s buoyed by her experience of collaborating with researchers from UC San Diego Health.
“I would like to push forward on that front,” says Liu. “We studied whether different ways of paying for genomic testing led to different downstream consequences. We found that when there’s a copay, people are more likely to take the follow up tests. That’s a good illustration of how pricing and marketing affect health outcomes.”