Strategic Investments for Platform Launch and Ecosystem Growth: A Dynamic Analysis

2023 | Journal of Management Information Systems | Citations: 0

Authors: Anderson Jr., Edward G.; Parker, Geoffrey G.; Tan, Burcu

Abstract: Multi-sided platforms must make decisions on both pricing and engineering invest ... Expand

Abstract: Multi-sided platforms must make decisions on both pricing and engineering investment and must continually adjust them as the platform scales over its lifecycle. Engineering investments can be allocated to features that improve a platform's standalone value, social features to take advantage of same-side network effects, or integration tools and boundary resources to facilitate third-party content creation. Guidance in the academic or practitioner literature is not granular. Moreover, relevant normative economic models that consider externalities are rarely dynamic. Hence, there is a gap in knowledge about how to best balance tradeoffs between different strategic decisions throughout the entire platform lifecycle. To begin to address this gap, we explore normative strategies for coordinating pricing and engineering investment decisions on a continuous basis under different ecosystem conditions. We build a simulation model informed by economics and marketing theory and perform extensive sensitivity analyses on key parameters in different ecosystem scenarios over a multi-period lifecycle. We find that pricing and investment strategies must continuously change to perform optimally. In particular, strategies that are most effective at launch often differ from those that are most effective during scaling as well as those most effective at maturity. We also find that the optimal strategy depends strongly on the monetization model and market aversion to price changes. Lastly, we specifically examine four different industry segments: mobile platforms, social media, the sharing economy, and business-to-business. The results provide evidence that the trajectory of platform pricing and investment strategies should greatly differ depending on industrial context. Collapse

Topics: price management digital platform social media decision making business-to-business

Methods: simulation sensitivity analysis system dynamics optimization model conjoint analysis

Theories: control theory marketing theory

UNDERSTANDING USER’S TRUST FORMATION ON MULTI-SIDED E-COMMERCE PLATFORMS

2023 | European Conference On Information Systems | Citations: 0

Authors: Benz, Carina; Oberländer, Rebekka; Riefle, Lara

Abstract: With the ever-growing popularity of online shopping, platform environments prov ... Expand

Abstract: With the ever-growing popularity of online shopping, platform environments providing access to products by multiple sellers increasingly attract users. To reduce information asymmetry and enhance user trust, platform actors provide signals such as star reviews to demonstrate their trustworthiness. This work investigates the influence of trust signals from different sources (on the platform itself vs. on external third-party review sites) and for different targets (platform provider vs. seller) on users' trust formation in multi-sided e-commerce platforms. We conduct a choice-based conjoint analysis based on data from 81 participants. Our results show that users weigh external signals stronger than internal ones when building trust. Also, trust signals for sellers have a higher impact on users' trust than platform provider signals. Signal discrepancies between internal and external reviews are especially harmful to the platform provider. These insights extend prior knowledge on trust formation and its impacting factors on e-commerce platforms. Collapse

Topics: online review electronic commerce digital platform internet technology website

Methods: conjoint analysis experiment survey survey design factorial experiment

Theories: signaling theory

The Cost of Free: The Effects of “Wait-for-Free” Pricing Schemes on the Monetization of Serialized Digital Content

2023 | Management Information Systems Quarterly | Citations: 0

Authors: Choi, Angela; Rhee, Ki-Eun; Yoon, Chamna; Oh, Wonseok

Abstract: Leveraging a combination of analytical frameworks and empirical assessments, th ... Expand

Abstract: Leveraging a combination of analytical frameworks and empirical assessments, this study investigates the effects of wait-for-free (WFF) pricing schemes on the monetization of serialized, digital entertainment content, which has become increasingly pervasive on online platforms. WFF pricing is a strategy in which consumers are given the option to either wait a certain amount of time to acquire digital content at no cost or pay to consume it immediately. We evaluate the extent to which habit formation and presentbiased preferences driven by the consumption of addictive stock affect individual consumers' willingness to wait (or pay) for content, which, in turn, determines the efficacy of WFF pricing. We also examine the conditions under which consumers switch from waiting for free content to instantaneously purchasing content. Our findings indicate that WFF pricing increases the sales of serialized digital content, generating new demand from customers who would otherwise forgo participation in the market. In addition, the pricing design effectively generates sustained profits in the long run. We found that most consumers who initiate a purchase either upon initial market entry or upon switching continue to purchase as new episodes become available. Moreover, the results indicate that as a user accumulates free episodes of a specific series, given extended waiting periods, the likelihood of their conversion from a wait-for-free customer to an instant-purchase customer increases. In particular, WFF pricing effectively augments the willingness to pay of low-valuation consumers as habit formation builds up through time with the free consumption of serialized content. One free episode can elevate the likelihood of consumer purchase by up to 13%. However, as the number of free episodes consumed goes beyond a threshold, the likelihood of conversion decreases. We conclude with a discussion of managerial implications that can help content providers monetize their serialized digital content products. Collapse

Topics: price management consumer behavior advertising management digital good customer satisfaction

Methods: mathematical model robustness check econometric modeling proportional hazards model survival analysis

Theories: behavioral economics

A Bitter Pill to Swallow? The Consequences of Patient Evaluation in Online Health Question-and-Answer Platforms

2023 | Information Systems Research | Citations: 0

Authors: Chen, Chen; Walker, Dylan

Abstract: Online health question-and-answer (Q&A) platforms (OHQPs), where patients post h ... Expand

Abstract: Online health question-and-answer (Q&A) platforms (OHQPs), where patients post health-related questions, evaluate advice from multiple doctors, and direct a bounty (monetary reward) to their most preferred answer, have become a prominent channel for patients to receive medical advice in China. To explore the quality of medical advice on these platforms, we analyzed data on patients’ evaluation of ∼497,000 answers to ∼114,000 questions on one of the most popular OHQPs, 120ask.com, over a three-month period. We assembled a panel of independent physicians and instructed them to evaluate the quality of ∼13,000 answers. We found that the quality of medical advice offered on the platform was high on average, and that low-quality answers were rare (6%). However, our results also indicate that patients lacked the ability to discriminate advice quality. They were as likely to choose the best answer as the worst. The medical accuracy of patient evaluation was worse in critical categories (cancer, internal medicine) and for vulnerable subpopulations (pediatrics). Given that millions of patients seek medical advice from OHQPs in China annually, the social and economic implications of this finding are troubling. To understand how patients evaluate advice, we trained deep neural networks to think like patients, allowing us to identify patients’ positive and negative responses to different heurist cues. Although our results indicate that OHQPs perform well, we identified several concerns that should be addressed through platform design and policy changes. Because the Q&A process lacks peer review mechanisms, signals of advice quality are not conveyed to patients, forcing them to rely on heuristic cues, which cannot effectively guide them toward the best advice. We also found that the platform reputation metric was not correlated with the quality of the advice giver’s advice, may effectively encourage patients to select lesser quality medical advice, and increased the risk of moral hazard for malicious players to intentionally provide less accurate but more agreeable advice for personal gain. Our analysis revealed bad actors on the platform, including drug promoters and spammers. Finally, we found that OHQPs exacerbated care avoidance. We discuss several potential policy changes to address these shortcomings. History: Param Singh, Senior Editor; Idris Adjerid, Associate Editor. Supplemental Material: The online appendix is available at https://doi.org/10.1287/isre.2022.1158. Collapse

Topics: decision making local interpretable model agnostic explanation digital platform health information system pandemic

Methods: artificial neural network psychometrics survey deep learning natural language processing

Theories: lemon market theory

Online Information Filtering: The Role of Contextual Cues in Electronic Networks of Practice

2023 | ACM SIGMIS Database | Citations: 0

Authors: Fadel, Kelly J.; Jensen, Matthew L.; Meservy, Thomas O.

Abstract: Online forums sponsored by Electronic Networks of Practice are commonly used to ... Expand

Abstract: Online forums sponsored by Electronic Networks of Practice are commonly used to exchange information related to problem solving, but the quality of solutions posted on forums can vary widely. To assist knowledge seekers, most forums offer contextual cues that signal solution quality, such as endorsements by the question poster, experts, or other community members. However, the influence of these cues on information-filtering decisions, particularly when presented simultaneously, remains poorly understood. This study draws on signaling theory to develop hypotheses about how four cue dimensions-source, valence, format, and volume-shape information filtering on an online forum. Results from three choice-based conjoint studies show that some sources are more influential than others and that positive cues weigh more heavily on filtering decisions than negative cues. Results also show that cues tend to be more influential when they employ a more granular format and reflect the input of a larger number of individuals. Collapse

Topics: decision making information storage and retrieval system logistics management website information exchange

Methods: conjoint analysis survey statistical hypothesis test literature study theory development

Theories: signaling theory

"YOU CAN'T ALWAYS GET WHAT YOU WANT": EXAMINING EMPLOYEES' PREFERENCES AND JOB SATISFACTION IN AGILE TRANSFORMATIONS

2023 | European Conference On Information Systems | Citations: 0

Authors: Fischer, Mareike; Heinz, Matthias; Schlereth, Christian; Rosenkranz, Christoph

Abstract: Agile transformations cause fundamental changes to work designs. To better unde ... Expand

Abstract: Agile transformations cause fundamental changes to work designs. To better understand resistance to transformations, we shed light on employee preferences and the consequences of team and work organization changes for job satisfaction. Using the stated preference method "pairwise comparisonbased preference measurement", we examine our hypothesis on job satisfaction in agile vs. traditional team and work organization. Furthermore, we relate job satisfaction to the gap between perceived and preferred forms of such organizations. In summary, we identified team organization as the most important dimension in agile transformations. For requirements engineering, the distance between employee preferences and the perceived status quo was particularly large. Further, we found evidence that a larger distance between team and work organization preferences and perceptions negatively influenced job satisfaction. Collapse

Topics: job satisfaction marketing management IT personell turnover business model new product development

Methods: survey statistical hypothesis test linear regression analysis conjoint analysis Student's t-test

Framing as an App-Design Measure to Nudge Users Toward Infection Disclosure in Contact-Tracing Applications

2023 | European Conference On Information Systems | Citations: 0

Authors: Ghaffar, Abdul Muqeet; Widjaja, Thomas

Abstract: Contact-tracing applications are only effective in countering pandemics when tw ... Expand

Abstract: Contact-tracing applications are only effective in countering pandemics when two conditions are fulfilled: A) they are widely adopted, and B) users voluntarily disclose their infection to warn others. While much research has investigated how contact-tracing applications should be designed and promoted to motivate app-adoption, little is known about how to increase voluntary infection disclosures. To increase the voluntary infection disclosure among app-users, our joint research project with the core development team of a contact-tracing application relied on the theory of message framing to investigate how to nudge users toward infection disclosure in contact-tracing applications. Based on a mixed method research design consisting of 15 workshops with the core development team of the contact-tracing application and a conjoint study among 139 users of a European contact-tracing application we show that message framing can be a useful approach to increase the voluntary infection disclosure in contact-tracing applications. Collapse

Topics: privacy mobile application pandemic self efficacy internet technology

Methods: survey conjoint analysis mixed method survey design Student's t-test

Motivating User-Generated Content: The Unintended Consequences of Incentive Thresholds

2023 | Management Information Systems Quarterly | Citations: 0

Authors: He, Liuyi; Luo, Jifeng; Tang, Yisong; Wu, Zhiyan; Zhang, Han

Abstract: While monetary rewards have been widely used by online platforms to motivate us ... Expand

Abstract: While monetary rewards have been widely used by online platforms to motivate user-generated content (UGC) contributions, users may not always demonstrate the expected behaviors. Unintended consequences of reward policies, exemplified by unchanged or reduced UGC contributions, may occur. Through two natural experiments, this study investigates the implications of providing users with an incentive structure that rewards users' continued contribution according to the volume of UGC. Using a unique data set on two completion-contingent incentive programs from a popular online aesthetic medicine platform, we examine user responses to reward thresholds. We found that after users reach a threshold to obtain a monetary reward, they are less likely to continue contributing UGC, suggesting a minimal-effort effect. Our findings indicate that social approval from peers helps to mitigate unintended user responses to monetary reward policies. We also observed that monetary rewards primarily improve the quality and website traffic of low-to moderate-quality contributions. Collapse

Topics: unintended consequence website online community social norm intrinsic motivation

Methods: experimental group natural experiment robustness check computational algorithm simulation

Competing for Temporary Advantage in a Hypercompetitive Mobile App Market

2023 | Management Information Systems Quarterly | Citations: 0

Authors: James, Tabitha; Qiao, Zhilei; Shen, Wenqi; Wang, G. Alan; Fan, Weiguo

Abstract: Hypercompetitive mobile app stores are characterized by rapid innovation and in ... Expand

Abstract: Hypercompetitive mobile app stores are characterized by rapid innovation and intense competition. App firms must vie for temporary competitive advantage through competitive actions such as releasing product improvements. We study how competitive indicators influence a particular competitive actionapp updates-in a mobile game app market. Our results reveal that app firms take action to improve or sustain their temporary competitive advantage, updating their apps when there are opportunities to capitalize on popularity (e.g., rank and rating volume are increasing) and when their apps' advantages are threatened (e.g., customer ratings are decreasing). We also find that app updates are released in response to competitors' actions-specifically, when competitors update their apps and new competitors enter ranking lists. Moreover, our findings show that app firms release app updates when an app's customer rating volume is increasing or when an app firm's portfolio of game apps is less diverse, relative to its competitors. We conduct additional analyses that show that older app firms are responsive to more competitive indicators than younger ones and major updates are primarily used to respond to serious threats to apps' competitive positions. Overall, our results indicate that app updates are competitive actions used to improve or sustain temporary advantage when competitive indicators reveal opportunities to improve or threats to apps' competitive positions. Collapse

Topics: mobile application mobile application market digital distribution innovation management packaged software

Methods: robustness check instrumental variables estimation computational algorithm archival research longitudinal research

Cultural Roots of Entrepreneurship: Evidence from Second-Generation Immigrants

2023 | Organization Science | Citations: 0

Authors: Kleinhempel, Johannes; Klasing, Mariko J.; Beugelsdijk, Sjoerd

Abstract: Does national culture influence entrepreneurship? Given that entrepreneurship an ... Expand

Abstract: Does national culture influence entrepreneurship? Given that entrepreneurship and the economic, formal institutional, and cultural characteristics of nations are deeply intertwined and co-vary, it is difficult to isolate the effect of culture on entrepreneurship. In this study, we examine the self-employment choices of second-generation immigrants who were born, educated, and currently live in one country, but were raised by parents stemming from another country. We argue that entrepreneurship is influenced by durable, portable, and intergenerationally transmitted cultural imprints such that second-generation immigrants are more likely to become entrepreneurs if their parents originate from countries characterized by a strong entrepreneurial culture. Our multilevel analysis of two independent samples—65,323 second-generation immigrants of 52 different ancestries who were born, were raised, and live in the United States and 4,165 second-generation immigrants of 31 ancestries in Europe—shows that entrepreneurial culture is positively associated with the likelihood that individuals are entrepreneurs. Our results are robust to alternative non-cultural explanations, such as differences in resource holdings, labor market discrimination, and direct parent-child linkages. Overall, our study highlights the durability, portability, and intergenerational transmission of entrepreneurial culture as well as the profound impact of national culture on entrepreneurship. Supplemental Material: The online appendix is available at https://doi.org/10.1287/orsc.2022.1645. Collapse

Topics: entrepreneurship human resource management accounting national culture database system

Methods: hierarchical linear modeling survey robustness check descriptive statistic instrumental variables estimation

Theories: theory of economic development