Optional Verification and Signaling in Online Matching Markets: Evidence from a Randomized Field Experiment

2023 | Information Systems Research | Citations: 0

Authors: Shi, Lanfei; Viswanathan, Siva

Abstract: Online matching platforms lack common informational mechanisms such as ratings a ... Expand

Abstract: Online matching platforms lack common informational mechanisms such as ratings and reviews that serve to reduce information asymmetry in transactional platforms. The lack of verified information about participants further exacerbates issues of information asymmetry in such markets. This study focuses on a novel role of verification in such matching markets—its ability to serve as a credible signal for a user when such verification is made optional and visible to other users. In collaboration with a leading online dating platform with no reputation mechanisms and where most of the information is self-disclosed, we design and conduct a randomized field experiment to examine not only who chooses to verify but also, the effectiveness of such optional verification for different types of users. Interestingly, we find that users on the two sides use the same signal very differently. Males act consistent with the conventional prediction of signaling, with high-type males being more likely to opt in to verification. As for females, we find that medium-type females are the most likely to opt in to verification as compared with high-type females. We also find that such differential opt-in decisions are related to the differences in the credibility of the existing key attribute of each side (viz., income for males and beauty for females). In examining the outcomes of verification, we find that verified users receive more contacts from higher-type users, with the high-type males and medium-type females benefitting the most. More interestingly, we find that verified users become more proactive and reach out to more and better potential partners. Further, the introduction of this voluntary verification facilitates desirable matching outcomes and benefits the platform as a whole. These findings have useful implications for research as well as practice. History: Ravi Bapna, senior editor. Supplemental Material: The online appendix is available at https://doi.org/10.1287/isre.2022.1194. Collapse

Topics: online dating LinkedIn anonymity data breach privacy

Methods: experimental group deep learning survey experiment robustness check

Theories: signaling theory lemon market theory economic theory

Bypassing Performance Optimizers of Real Time Bidding Systems in Display Ad Valuation

2022 | Information Systems Research | Citations: 1

Authors: Christopher, Ranjit M.; Park, Sungho; Han, Sang Pil; Kim, Min-Kyu

Abstract: Demand-side platforms (DSPs) that purchase digital ad space using real-time bidd ... Expand

Abstract: Demand-side platforms (DSPs) that purchase digital ad space using real-time bidding (RTB) systems employ “black-box” performance optimizers to adjust bids at run time. Advertisers using field experiments to estimate the marginal value of display ads need to contend with the selective targeting of users by optimizers that adjust bids to target users with a greater propensity to respond favorably (i.e., click or conversion). In this paper, we propose an alternative approach for advertisers who choose to bypass their DSP’s performance optimizers for the purpose of assessing the value of their ads. We show that external frequency caps that set upper limits on the number of ad impressions outside the purview of bidding algorithms can serve as a suitable instrumental variable. Eliminating performance optimizers allows the advertiser to value ads without relying on the support services of the DSP with the added benefit of a broader customer reach and a markedly lower cost. As the focal advertiser disables performance optimizers, any overbidding or underbidding vis-à-vis competition that employs them results in a negative correlation between the numbers of ad impressions won and their underlying quality in real time. Using two large-scale randomized field experiments in different geographies (United States and Asia) and different devices (PC and mobile), we validate the proposed approach and report a positive effect of ad impression count after adjusting for net negative bias. Collapse

Topics: Tencent QQ marketing management online advertising electronic commerce mobile application

Methods: experiment experimental design instrumental variables estimation field experiment regression analysis method

Detrimental Collaborations in Creative Work: Evidence from Economics

2022 | Organization Science | Citations: 0

Authors: Vakili, Keyvan; Teodoridis, Florenta; Bikard, Michaël

Abstract: Prior research on collaboration and creativity often assumes that individuals ch ... Expand

Abstract: Prior research on collaboration and creativity often assumes that individuals choose to collaborate to improve the quality of their output. Given the growing role of collaboration and autonomous teams in creative work, the validity of this assumption has important implications for organizations. We argue that in the presence of a collaboration credit premium—when the sum of fractional credit allocated to each collaborator exceeds 100%—individuals may choose to work together even when the project output is of low quality or when its prospects are diminished by collaborating. We test our argument on a sample of economists in academia using the norm of alphabetical ordering of authors’ surnames on academic articles as an instrument for selection into collaboration. This norm means that economists whose family name begins with a letter from the beginning of the alphabet receive systematically more credit for collaborative work than economists whose family name begins with a letter from the end of the alphabet. We show that, in the presence of a credit premium, individuals may choose to collaborate, even if this choice decreases output quality. Thus, collaboration can create a misalignment between the incentives of creative workers and the prospects of the project. Collapse

Topics: productivity collaborative work IT career individual productivity database system

Methods: instrumental variables estimation descriptive statistic cluster analysis ordinary least square experimental group

Not Registered? Please Sign Up First: A Randomized Field Experiment on the Ex Ante Registration Request

2021 | Information Systems Research | Citations: 6

Authors: Huang, Ni; Mojumder, Probal; Sun, Tianshu; Lv, Jinchi; Golden, Joseph M.

Abstract: Online commerce websites often request users to register in the online shopping ... Expand

Abstract: Online commerce websites often request users to register in the online shopping process. Recognizing the challenges of user registration, many websites opt to delay their registration request until the end of the conversion funnel (i.e., ex post registration request). Our study explores an alternative approach by asking users to register with the website at the beginning of their shopping journey (i.e., ex ante registration request). Guided by a stylized analytical model, we conducted a large-scale randomized field experiment in partnership with an online retailer in the United States to examine how the ex ante request affects users’ registration decisions, short-term customer conversions, and long-term purchase behaviors. Specifically, we randomly assigned the new users in the website’s incoming traffic to one of two experimental groups: one with an ex ante registration request preceding the ex post request (treatment) and the other with only an ex post registration request (control). Our results show that the ex ante request leads to an increased probability of user registration; that is, the users in the treatment group, on average, are 58.08% relatively more likely to register with the website than those in the control group. Furthermore, the ex ante request leads to significant increases in customer purchases in the long run. Based on our estimation of the local average treatment effects, the ex ante registered users are 10.89% relatively more likely to make a purchase, place a 16.76% relatively greater number of orders, and generate 13.22% relatively higher total revenue for the firm in the long run. Finally, the ex ante request also does not impact customer conversion in the short-term. Further investigation into the long-term and short-term effects provides suggestive evidence on several potential mechanisms, such as firm-initiated interaction and screening of low-interest users. Our study provides managerial implications to the e-commerce websites on customer acquisition and contributes to the research on IT artifact design. Collapse

Topics: website electronic commerce electronic mail business-to-consumer marketing management

Methods: experimental group experiment mathematical model field experiment randomized field experiment

The Effect of Binge-Watching on the Subscription of Video on Demand: Results from Randomized Experiments

2020 | Information Systems Research | Citations: 0

Authors: Godinho de Matos, Miguel; Ferreira, Pedro

Abstract: We analyze the outcomes of two randomized field experiments to study the effect ... Expand

Abstract: We analyze the outcomes of two randomized field experiments to study the effect of binge-watching on subscription to video on demand. In both cases, we offered access to subscription VoD (SVoD) to a random set of households for several weeks and used another random set of households as a control group. In both cases, we find that the households that binge-watch TV shows are less likely to pay for SVoD after these free trials. Our results suggest that binge-watchers deplete the content of interest to them very quickly, which reduces their short-term willingness to pay for SVoD. We also show that recommendation reminders aimed at widening the content preferences of households offset the negative effect of binge-watching and lessen the concerns of binge-watchers with lack of content refresh. We discuss that these recommendation reminders may help content providers manage supply costs, which may otherwise become prohibitive with frequent updates to SVoD catalogs. Collapse

Topics: digital service video streaming service willingness to pay recommender system Netflix

Methods: experiment experimental group survey robustness check instrumental variables estimation

People You May Know: Friend Recommendation, Network Formation, and Online Community Participation

2020 | International Conference on Information Systems | Citations: 0

Authors: Wang, Lin

Abstract: Friend recommendation has become a standard design in social media platforms ove ... Expand

Abstract: Friend recommendation has become a standard design in social media platforms over the years, however, its behavioral consequences remain empirically unaddressed. In this paper, we report on a large-scale randomized field experiment carried out on KWAI. Our findings reveal that friend recommendation affects the user’s egocentric network formation. It helps users build larger, more reciprocal, denser, and more diversified egocentric networks, and the effects accumulate over time. On the other hand, friend recommendation motivates users to be more active, engaging more in content contribution, content consumption, and social interaction. We leverage the causal forest method and find younger users, male users, users from big cities, users from urban areas, and users who are at the beginning of building social networks respond more favorably to friend recommendations. Our heterogeneous treatment analysis reveals critical insights for social media platforms in customizing friend recommendation functions for different user groups. Collapse

Topics: online community social network social media user behavior digital platform

Methods: experimental group randomized field experiment experiment computational algorithm machine learning

Complementarity and Cannibalization of Offline-Toonline Targeting: A Field Experiment on Omnichannel Commerce

2020 | Management Information Systems Quarterly | Citations: 0

Authors: Xueming Luo; Yuchi Zhang; Fue Zeng; Zhe Qu

Abstract: As the online channel is crucially important, traditional offline retail stores ... Expand

Abstract: As the online channel is crucially important, traditional offline retail stores seek to induce their existing consumers to buy online with incentives (i.e., offline-to-online targeting). However, it is debatable whether such targeting is truly effective. While advocates argue that online shopping should complement a firm’s store channel, critics counter that doing so may result in cannibalization. Drawing on the channel interplay literature and considering customers’ travel costs, we examine whether and how inducing online shopping complements or cannibalizes a firm’s offline sales. Using a randomized field experiment on over 11,200 customers of a large department store, we provide causal evidence for both the complementarity and cannibalization effects of online and offline channels. Offline-to-online targeting engenders higher online purchases (as intended) than no targeting. The local average treatment effects models suggest that once induced to buy online, consumers who live near the retailer’s physical store tend to increase their offline spending and total sales by 47% (i.e., complementarity effects for nearby consumers). However, for consumers who live far away from the brick-and-mortar store, inducing them to buy online can backfire by reducing offline and total sales by approximately 5.7% for each additional kilometer of distance (i.e., cannibalization effects for distant consumers). Explorations of these mechanisms suggest that distant consumers who are induced to buy online may fail to return to shop in the offline store and purchase less experiential category products with a smaller basket size than other customers, thus leading to a negative net impact on the total sales. These findings alert managers to the dangers of improper targeting and investment in information technology and the importance of consumer heterogeneity for omnichannel commerce across online and offline channels. Collapse

Topics: electronic commerce IT investment online banking virtual reality accounting

Methods: randomized field experiment experimental group field experiment experiment robustness check

Understanding Security Vulnerability Awareness, Firm Incentives, and ICT Development in Pan-Asia

2020 | Journal of Management Information Systems | Citations: 0

Authors: Zhuang, Yunhui; Choi, Yunsik; He, Shu; Leung, Alvin Chung Man; Lee, Gene Moo; Whinston, Andrew

Abstract: This paper investigates how the awareness of a security vulnerability index affe ... Expand

Abstract: This paper investigates how the awareness of a security vulnerability index affects firms’ security protection strategy and how the information awareness effect interacts with firm incentives and country-wide information technology (IT) development level. The security index is constructed based on outgoing spams and phishing website hosting, which may serve as an indicator of a firm’s security controls. To study whether security vulnerability awareness causes firms to improve their security, we conducted a randomized field experiment on 1,262 firms in six Pan-Asian countries and regions. Among 631 randomly selected treated firms, we alerted them of their security vulnerability index and their relative rankings compared to their peers via advisory emails and websites. Difference-in-differences analyses show that compared with the controls, the treated firms improve their security over time, with a statistically significant reduction of outgoing spam volume according to one of the data sources but not phishing website hosting. However, a statistically significant reduction in phishing website hosting was observed among non-web hosting firms, suggesting that firms’ underlying incentives play an important role in the treatment effect. Lastly, exploiting the multi-country nature of the data, we found that firms in countries with high information and communications technology (ICT) development are more responsive to our intervention because they have higher IT capabilities and more resources to resolve security issues. Our study provides cybersecurity policymakers with useful insights on how firm incentives and ICT environments play roles in firms’ security measure adoption. Collapse

Topics: email spam electronic mail phishing phishing website IT security threat

Methods: experiment experimental group principal component analysis data transformation field experiment

Theories: lemon market theory

The App Updating Conundrum: Implications of Platform’s Rating Resetting on Developers’ Behavior

2019 | International Conference on Information Systems | Citations: 0

Authors: Gutt, Dominik; Neumann, Jürgen; Jabr, Wael; Kundisch, Dennis

Abstract: Given the importance of online reviews, digital platforms regularly redesign rev ... Expand

Abstract: Given the importance of online reviews, digital platforms regularly redesign review systems to enhance platform performance. A unique platform governance aspect of the Apple App Store review system is their resetting of apps’ overall ratings each time app developers release an update. This means that with each update apps have to rebuild their reputation from scratch. Using panel data from the Apple App Store, we analyze the effects of developers’ updating behavior and of the rating resetting on subsequent app performance. Using an instrumental variable approach, we distinguish between feature and maintenance updates, and whether the app update is the developer’s choice or driven by the platform. We find strong indications for divergent effects on app performance subject to the type of update and its source. This suggest that developers can use updating as a strategic instrument and that platform governance has an impact on the strategic importance of this instrument. Collapse

Topics: mobile application iOS mobile application market digital distribution platform governance

Methods: instrumental variables estimation statistical hypothesis test F-test longitudinal research regression analysis method

Connecting Customers and Merchants Offline: Experimental Evidence from the Commercialization of Last-Mile Pickup Stations at Alibaba

2019 | International Conference on Information Systems | Citations: 0

Authors: Han, Brian Rongqing; Sun, Tianshu; Chu, Leon Yang; Wu, Lixia; Xu, Yinghui

Abstract: Many e-commerce platforms have established extensive networks of last-mile stati ... Expand

Abstract: Many e-commerce platforms have established extensive networks of last-mile stations as their logistics infrastructure. In this study, we investigate how this last-mile infrastructure may serve as an offline platform for commercial activities (e.g., free sample distribution) to connect customers and merchants. In collaboration with Alibaba, we design two large-scale experimental studies and provide the first evidence on how platforms can leverage the walk-in traffic (organic interaction) and prompt nearby customers through online intervention (induced interactions) to improve customers’ online engagement with the merchants and offline utilization of logistics infrastructure. Collapse

Topics: logistics management electronic commerce advertising management mobile application big data

Methods: experimental group experiment field experiment propensity score matching longitudinal research