Category Archives: Cases

Cases

Behind the scenes at a famous bakery in San Francisco: Why people watch the process

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Boudin Bakery at Fisherman’s Wharf is well known for its sourdough bread. Many visitors stop by to enjoy clam chowder served in a sourdough bowl.

What is Sourdough?
Ever since 1849, we have been baking San Francisco Sourdough according to the Boudin family’s time-honored methods. Our secret: the mother dough, an ancient method of making bread rise using only the wild yeast present in the local environment, “caught” from the air and cultivated with a mixture of water and flour. Surviving only in our fog-cooled climate, our mother dough imparts a flavor and texture unlike any other bread in the world.

When I visited, I noticed many people were watching how the bread was made.

Inside the building, several bakers were mixing flour, shaping dough, and baking loaves behind large glass windows. Many people stood outside, quietly observing. They were interested in the process, not just the final food. I was curious about why people care about how something is made.

Usually, marketers focus on product benefits. However, consumers may pay greater attention to how a product is made. There could be two reasons. First, they may want to avoid harmful ingredients and look for safety. Second, they may want to give credit to those who work hard.

Regardless of the reasons, marketers should not focus only on product outcomes. They should also make the production process more visible and highlight the makers’ effort. Showing what happens behind the scenes can have a strong impact on how people see the product.

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Reference 1

Kruger, J., Wirtz, D., Van Boven, L., & Altermatt, T. W. (2004). The effort heuristic. Journal of Experimental Social Psychology, 40(1), 91–98.

The research presented here suggests that effort is used as a heuristic for quality. Participants rating a poem (Experiment 1), a painting (Experiment 2), or a suit of armor (Experiment 3) provided higher ratings of quality, value, and liking for the work the more time and effort they thought it took to produce. Experiment 3 showed that the use of the effort heuristic, as with all heuristics, is moderated by ambiguity: Participants were more influenced by effort when the quality of the object being evaluated was difficult to ascertain. Discussion centers on the implications of the effort heuristic for everyday judgment and decision-making.

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Reference 2

Morales, A. C. (2005). Giving firms an “E” for effort: Consumer responses to high-effort firms. Journal of Consumer Research, 31(4), 806–812.

This research shows that consumers reward firms for extra effort. More specifically, a series of three laboratory experiments shows that when firms exert extra effort in making or displaying their products, consumers reward them by increasing their willingness to pay, store choice, and overall evaluations, even if the actual quality of the products is not improved. This rewarding process is defined broadly as general reciprocity. Consistent with attribution theory, the rewarding of generally directed effort is mediated by feelings of gratitude. When consumers infer that effort is motivated by persuasion, however, they no longer feel gratitude and do not reward high-effort firms.

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Reference 3

Norton, M. I., Mochon, D., & Ariely, D. (2012). The “IKEA Effect”: When labor leads to love. Journal of Consumer Psychology, 22(3), 453–460.

In four studies in which consumers assembled IKEA boxes, folded origami, and built sets of Legos, we demonstrate and investigate boundary conditions for the IKEA effect-the increase in valuation of self-made products. Participants saw their amateurish creations as similar in value to experts’ creations, and expected others to share their opinions. We show that labor leads to love only when labor results in successful completion of tasks; when participants built and then destroyed their creations, or failed to complete them, the IKEA effect dissipated. Finally, we show that labor increases valuation for both “do-it-yourselfers” and novices.

Cases

Three personal insights from Stanford’s AI Index report

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I recently attended the 2025 AI Index report seminar hosted by Stanford’s HAI (Human-Centered Artificial Intelligence). Nestor Maslej, the report’s research manager, presented key findings that offered a look at how AI is reshaping our world. I came away three new insights: one technical, one economic, and one social.

First, AI is now outperforming humans in most complex tasks. From image classification to scientific reasoning and multimodal benchmarks, there are fewer tests left that can challenge AI systems. Maslej noted that the real challenge now is designing problems that are difficult enough to measure AI’s limits.

Second, AI adoption in business is accelerating rapidly. In 2024, 78% of companies reported using AI. This is a jump from 55% in 2023. This is because AI helps non-expert workers perform better, narrows skill gaps within teams, and boots overall productivity.

Third, global perceptions of AI differ widely. In countries like China (83%) and South Korea (66%), most people view AI as more beneficial than harmful. In contrast, optimism is lower in the U.S. (39%) and Canada (40%).

AI’s rise feels inevitable, but how we repspond to it will matter as well.

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Reference

2025 AI Index Report – Full report.pdf
2025 AI Index Report – Full video

Introduction to the AI Index Report 2025

Welcome to the eighth edition of the AI Index report. The 2025 Index is our most comprehensive to date and arrives at an important moment, as AI’s influence across society, the economy, and global governance continues to intensify. New in this year’s report are in-depth analyses of the evolving landscape of AI hardware, novel estimates of inference costs, and new analyses of AI publication and patenting trends. We also introduce fresh data on corporate adoption of responsible AI practices, along with expanded coverage of AI’s growing role in science and medicine.

Since its founding in 2017 as an offshoot of the One Hundred Year Study of Artificial Intelligence, the AI Index has been committed to equipping policymakers, journalists, executives, researchers, and the public with accurate, rigorously validated, and globally sourced data. Our mission has always been to help these stakeholders make better-informed decisions about the development and deployment of AI. In a world where AI is discussed everywhere—from boardrooms to kitchen tables—this mission has never been more essential.

The AI Index continues to lead in tracking and interpreting the most critical trends shaping the field—from the shifting geopolitical landscape and the rapid evolution of underlying technologies, to AI’s expanding role in business, policymaking, and public life. Longitudinal tracking remains at the heart of our mission. In a domain advancing at breakneck speed, the Index provides essential context—helping us understand where AI stands today, how it got here, and where it may be headed next.

Recognized globally as one of the most authoritative resources on artificial intelligence, the AI Index has been cited in major media outlets such as The New York Times, Bloomberg, and The Guardian; referenced in hundreds of academic papers; and used by policymakers and government agencies around the world. We have briefed companies like Accenture, IBM, Wells Fargo, and Fidelity on the state of AI, and we continue to serve as an independent source of insights for the global AI ecosystem

Cases

When computers and gestures made music

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At Stanford University’s Bing Concert Hall, I experienced a performance by SLOrk, the Stanford Laptop Orchestra. Instead of traditional instruments like piano or violin, students used laptops, software, and motion-sensitive controllers. They sat on cushions arranged in a circle, manipulating sound with gestures and code.

I listened most attentively to one piece titled Bay Area Rain. It was inspired by memories of rainstorms. The music was chaotic and captured the feeling of rain.

What surprised me was not sound itself. The performers moved slowly, sometimes standing, sometimes kneeling. The lighting changed from purple to red. Everything was outside of what I imagined a concert to be.

I thought music made by computers could not have emotion. But after the concert, I felt strangely awake. The performance did not fit into any known category, yet powerful.

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Reference

Greb, F., Schlotz, W., & Steffens, J. (2018). Personal and situational influences on the functions of music listening. Psychology of Music, 46(6), 763-794.

On the one hand, the majority of research on the functions of music listening focuses on individual differences; on the other hand, a growing amount of research investigates situational influences. However, the question of how much of our daily engagement with music is attributable to individual characteristics and how much it depends on the situation is still under-researched. To answer this question and to reveal the most important predictors of the two domains, participants (n = 587) of an online study reported on questions regarding the situation, the music, and the functions of music listening for three self-selected situations. Additionally, multiple person-related variables were measured. Results revealed that the influence of individual and situational variables on the functions of music listening varied across functions. The influence of situational variables on the functions of music listening outweighed the influence of individual characteristics. On the situational level, main activity while listening to music showed the greatest impact, while on the individual level, intensity of music preference was most influential. Our findings suggest that research on music in everyday life should incorporate both – individual and situational – variables determining the complex behavior of people interacting with music in a certain situation.

Cases

Be present, not automatic: A computer-free cafe

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Cafe Venetia is a local coffee shop in Palo Alto. It serves Italian-style coffee including cafe lattes and espresso.

What makes this cafe special is its computer-free rule. On the patio wall, there is a sign that says “Computer Free Zone.” Each outdoor table has a small plate that reads “Computer-Free Table.”

The cafe encourages people to be present: read a book, have a conversation, or watch people pass by. The owner probably believes coffee should be enjoyed without the distraction of meetings or emails.

It is interesting that big tech companies like OpenAI and Google pull us deeper into virtual worlds, while a café in their own hometown encourages us to stay present.

Without these computer-free rules, we might easily get pulled into digital distractions through classic platforms like YouTube, Instagram, and TikTok, or newer AI agents like ChatGPT, Gemini, and Claude. Today, we need rules to create distance from the virtual world and enjoy something “unique, meaningful, and authentic.”

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Reference 1

Sun, J. J., & Pham, M. T. (2025). What Makes Consumption Experiences Feel Special? A Multi-Method Integrative Analysis. Journal of Consumer Research, ucaf033.

This article addresses a simple theoretical question of high substantive relevance: What makes a consumption experience special in a consumer’s mind? To answer this question, the authors report an extensive multi-method investigation involving a grounded theory analysis of numerous consumer narratives and in-depth interviews, a field survey, a scale development study, a natural language processing analysis of more than 3 million Yelp reviews, a preregistered multi-factor causal experiment (and its preregistered replication), a blind comparison of hundreds of matched visual Instagram posts by third-party observers, and several small application studies. The findings converge in identifying three major psychological pillars of what makes consumption experiences feel special to consumers, each pillar involving different facets: (a) uniqueness, which arises from the rarity, novelty, irreproducibility, personalization, exclusivity, ephemerality, and surpassing of expectations of the experience; (b) meaningfulness, which pertains to the personal significance of the experience in terms of symbolism, relationships, self-affirmation, and self-transformation; and (c) authenticity, which relates to the perceived genuineness and realness of the experience in terms of its psychological proximity to some original source, iconicity, human sincerity, and connection to nature. As illustrated in the General Discussion, the findings have important substantive implications for the engineering of hedonic consumption experiences.

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Reference 2

Brown, K. W., & Ryan, R. M. (2003). The benefits of being present: mindfulness and its role in psychological well-being. Journal of personality and social psychology, 84(4), 822.

Mindfulness is an attribute of consciousness long believed to promote well-being. This research provides a theoretical and empirical examination of the role of mindfulness in psychological well-being. The development and psychometric properties of the dispositional Mindful Attention Awareness Scale (MAAS) are described. Correlational, quasi-experimental, and laboratory studies then show that the MAAS measures a unique quality of consciousness that is related to a variety of well-being constructs, that differentiates mindfulness practitioners from others, and that is associated with enhanced self-awareness. An experience-sampling study shows that both dispositional and state mindfulness predict self-regulated behavior and positive emotional states. Finally, a clinical intervention study with cancer patients demonstrates that increases in mindfulness over time relate to declines in mood disturbance and stress.

Cases

Why is 이정후 more expensive than Jung Hoo Lee?

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At Oracle Park, I watched the San Francisco Giants play the San Diego Padres. Jung Hoo Lee, a former star in the Korean baseball league stole a second base that day.

During a break in the game, I noticed a non-Korean person wearing a jersey with his name in Korean (이정후) printed in bold Korean letters on the back. It was not J. H. Lee.

Later, back at home, I went to mlbshop.com out of curiosity. The official Nike t-shirt with “J. H. Lee” was priced at $44.99. But the same shirt, with “이정후” on the back, cost $49.99. It was five dollars more and sold out.

I checked the prices of other players’ shirts. Matt Chapman’s shirt also cost $44.99. Logan Webb’s was slightly cheaper at $39.99. Jorge Soler, who is no longer on the team, was listed for just $19.99. Among them, the version with Korean script was the most expensive.

From a marketing perspective, this price difference reflects the interesting psychology of fans. One reason could be uniqueness. Fans might want to be unique and choose the Korean version to feel rare. Another reason might be authenticity. Wearing the player’s name in his native language could feel more genuine. Finally, there might also be a sense of community. Wearing the Korean version might signal a shared cultural identity.

Fans often sacrifice convenience and pursue originality. They want to express identity, value, and/or a sense of belonging.

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Reference

Smith, R. K., Vandellen, M. R., & Ton, L. A. N. (2021). Makeup who you are: Self-expression enhances the perceived authenticity and public promotion of beauty work. Journal of Consumer Research, 48(1), 102–122.

Although consumers put substantial effort toward their appearance, engaging in beauty work is often seen as inauthentic, posing challenges for beauty companies that increasingly rely on social media-driven product promotion where authenticity perceptions are consequential. This article draws on existentialist notions of authenticity (wherein the true self is created rather than innate) to explore how framing beauty work as self-expression alters others’ perceptions and, in turn, marketing outcomes. First, an archival analysis of Instagram posts demonstrates that rebranding beauty work as self-expression is positively associated with word-of-mouth about beauty products. Six studies then test how motivational information alters perceptions of people who engage in beauty work. Lowered authenticity perceptions arise from observers’ default assumption that beauty work is motivated by self-enhancement and serves primarily to conceal appearances. By contrast, self-expression enhances authenticity by leading others to see beauty work as a form of creation rather than concealment. This pattern extends to when people engage in a variety of beauty work transformations but not when beauty work is designed to restore appearances or is framed as connected to the innate self. These findings provide insight into judgments of authenticity and the management of a stigma associated with product use.

Cases

The power of routine over the paradox of choice

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When I went skiing with my brother for the first time in South Lake Tahoe, he suggested we stop by Jalisco’s Taqueria, a Mexican restaurant he liked. The name “Jalisco” is a mark of quality since the region is known as the soul of Mexican cuisine and the birthplace of tequila.

At first, I did not find this restaurant appealing. The menu stretches across the wall and is hard to follow. It is packed with tacos, tortas, burritos, à la carte items, chips, and sauces. It is not minimal. As research on the paradox of choice suggests, too many options overwhelmed me.

But I noticed that the complex menu did not seem to bother other customers. People ordered confidently as if they already knew what they wanted. In fact, every time I go to the ski resort, I stop by and order the same burritos. It has become a routine for me.

When something becomes a routine, decisions happen automatically. I go to the same restaurant, order the same food, and leave satisfied every time. Routine, like an AI agent, takes over the work of deciding.

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Reference

Iyengar, S. S., & Lepper, M. R. (2000). When choice is demotivating: Can one desire too much of a good thing?. Journal of personality and social psychology, 79(6), 995.

Current psychological theory and research affirm the positive affective and motivational consequences of having personal choice. These findings have led to the popular notion that the more choice, the better—that the human ability to manage, and the human desire for, choice is unlimited. Findings from 3 experimental studies starkly challenge this implicit assumption that having more choices is necessarily more intrinsically motivating than having fewer. These experiments, which were conducted in both field and laboratory settings, show that people are more likely to purchase gourmet jams or chocolates or to undertake optional class essay assignments when offered a limited array of 6 choices rather than a more extensive array of 24 or 30 choices. Moreover, participants actually reported greater subsequent satisfaction with their selections and wrote better essays when their original set of options had been limited. Implications for future research are discussed.

Cases

How creative packaging turns an ordinary candle into something extraordinary

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At the Seattle-Tacoma International Airport, I stopped by a souvenir shop featuring local designers. One product package caught my eye: a candle sealed inside a sardine can. It was one of the most unexpected and playful mismatches between form and function I have seen.

Designs like this stand out. But are they effective? Research suggests that consumer responses to such mismatches depend on the type of product. For functional products, incongruent designs can enhance preference. For experiential products, however, congruent designs are better. In other words, mismatch works best when the product is seen as utilitarian.

Yet this sardine-can candle, clearly a hedonic product, seems to challenge the logic. Despite its experiential nature, the mismatch in form adds charm.

The real question is whether the surprise created by the product package fade after the first glance or continues through the purchase experience. This souvenir suggests it endures. I bought two candles partly to appreciate the creativity the designers put into it. The unexpected packaging not only captures attention but also transforms the ordinary into something curiously extraordinary.

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Reference

Noseworthy, T. J., & Trudel, R. (2011). Looks interesting, but what does it do? Evaluation of incongruent product form depends on positioning. Journal of Marketing Research, 48(6), 1008-1019.

Marketers struggle with how best to position innovative products that are incongruent with consumer expectations. Compounding the issue, many incongruent products are the result of innovative changes in product form intended to increase hedonic appeal. Crossing various product categories with various positioning tactics in a single meta-analytic framework, the authors find that positioning plays an important role in how consumers evaluate incongruent form. The results demonstrate that when a product is positioned on functional dimensions, consumers show more preferential evaluations for moderately incongruent form than for congruent form. However, when a product is positioned on experiential dimensions, consumers show more preferential evaluations for congruent form than for moderately incongruent form. Importantly, an increase in perceived hedonic benefits mediates the former, whereas a decrease in perceived utilitarian benefits mediates the latter. The mediation effects are consistent with the view that consumers must first understand a product’s functionality before engaging in hedonic consumption.

Cases

From ketchup to barbecue sauce: Heinz’s condiment set

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At Heavenly ski resort and Kirkwood ski resort, a full set of colorful condiments stood quietly near the dining area. They include ketchup, mustard, mayonnaise, ranch, barbecue sauce, and even Bull’s Eye sauce. All were arranged in a neat row of colorful pumps, like Lego.

I noticed that every container, no matter the flavor, was marked with the same brand, Heinz. I always thought Heinz was only about ketchup, its hero product. But here, it offered more than that.

Usually, consumers determine the success of brand extension. But in this case, the producer takes the lead. By offering a well-designed and complete set, Heinz makes it easy for lodge managers to decide. Once the managers accept the set, skiers follow. They cannot select a different kind of mustard like Dijon, or switch to another brand. Brand extension may not be shaped only by end users like us, but rather co-created by those in the middle who make the decisions behind the scenes.

The same rule applies to the student cafe in Stanford. There is a set of container of mayonnaise, ketchup, and mustard with Heinz and then there are a few Tabasco pumps.

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Reference

Aaker, D. A., & Keller, K. L. (1990). Consumer evaluations of brand extensions. Journal of marketing, 54(1), 27-41.

Two studies were conducted to obtain insights on how consumers form attitudes toward brand extensions, (i.e., use of an established brand name to enter a new product category). In one study, reactions to 20 brand extension concepts involving six well-known brand names were examined. Attitude toward the extension was higher when (1) there was both a perception of “fit” between the two product classes along one of three dimensions and a perception of high quality for the original brand or (2) the extension was not regarded as too easy to make. A second study examined the effectiveness of different positioning strategies for extensions. The experimental findings show that potentially negative associations can be neutralized more effectively by elaborating on the attributes of the brand extension than by reminding consumers of the positive associations with the original brand.

Cases

What art does that AI can’t

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I watched Tell Them We Were Here at the McMurtry Building at Stanford. It is a documentary about artists living and working in San Francisco.

One woman started by talking with prisoners. Later, she made a podcast called Ear Hustle with someone in prison. It won a Peabody Award.

One man has pushed a sewing machine on wheels through downtown San Francisco every month for 15 years. He mends clothes for free. He is not a tailor, but he wants to help.

One woman became known for drawing colorful lines. She gave her time and money to paint a big wall in San Francisco.

This 90-minute documentary made me stop and question. Why do these artists offer their talent so freely, expecting nothing in return? Am I overlooking something more meaningful that I should be pursuing?

As Melissa Kirsch wrote in The New York Times,

“The best art makes us question the received ideas we’ve internalized and, just maybe, offers us ideas for living differently”

I often move between two minds, and lately this swing feels even more intense. When I attend AI seminars, efficiency becomes my top priority. When I speak with museum curators, I feel drawn to beauty or simply to helping others. Art and AI seem to sit at opposite ends of the spectrum.

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Reference

Lasaleta, J. D., Sedikides, C., & Vohs, K. D. (2014). Nostalgia Weakens the Desire for Money. Journal of Consumer Research, 41(3), 713–729.

Nostalgia has a strong presence in the marketing of goods and services. The current research asked whether its effectiveness is driven by its weakening of the desire for money. Six experiments demonstrated that feeling nostalgic decreased people’s desire for money. Using multiple operationalizations of desire for money, nostalgia (vs. neutral) condition participants were willing to pay more for products (experiment 1), parted with more money but not more time (experiment 2), valued money less (experiments 3 and 4), were willing to put less effort into obtaining money (experiment 5), and drew smaller coins (experiment 6). Process evidence indicated that nostalgia’s weakening of the desire for money was due to its capacity to foster social connectedness (experiments 5 and 6). Implications for price sen- sitivity, willingness to pay, consumer spending, and donation behavior are dis- cussed. Nostalgia may be so commonly used in marketing because it encourages consumers to part with their money.

Cases

What I learned as a startup judge: Prototyping for products, insight for services

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I had the honor of judging four runner-up teams in Track 2 at the Sunstone Innovation Challenge at CSU Long Beach. Together with three other judges, we reviewed business plans and live pitches.

Photo: Institute for Innovation & Entrepreneurship (Instagram)

The four teams presented ideas and shared insights on product-market fit (PMF), market size (TAM, SAM, SOM), and go-to-market strategies across channels. They also laid out pre-launch timelines and key metrics to measure success.

Photo: Shelley Takahashi

Our judging rubric covered from market opportunity and business model to market validation and team structure. Each judge brought a unique perspective, focusing on aspects such as the scalability and/or financial strength of the business model.

I observed that understanding materials and experience with prototyping were critical when teams developed product concepts, and a deep understanding of customer needs was essential when generating service concepts.

Photo: Shelley Takahashi

Ultimately, the team, “Rise and UnWind,” was finalized with its clever idea of a coffee shop by day and speakeasy by night, supported by the team’s experience in the F&B industry.

Photo: Institute for Innovation & Entrepreneurship (Instagram)

To succeed with venture capitalists, founders must carefully balance solving real customer problems with delivering practical and workable solutions.

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Reference

Blank, S., & Dorf, B. (2020). The startup owner’s manual: The step-by-step guide for building a great company. John Wiley & Sons.