Essays on the Management of Online Platforms: Bayesian Perspectives

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2020-08-06
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Virginia Tech
Abstract

This dissertation presents three essays that focus on various aspects pertaining to the management of online platforms, defined as "digital services that facilitate interactions between two or more distinct, but interdependent sets of users (whether firms or individuals) who interact through the service via the Internet" (OECD, 2019). The interactions benefit both the users and the platform. Managing online platforms involves developing strategies for one or more of three value adding functions: (a) lowering search costs for the parties connecting through the platform, (b) providing a technology infrastructure that facilitates transactions at scale by sharing both demand and supply side costs; and (c) locating other audiences or consumers for the output that results from the transaction. The platform manager must manage these value adding functions. Thus, one important management task is to recognize potential asymmetries in the economic and/or psychological motivations of the transacting parties connected through the platform. In this dissertation, I empirically examine these issues in greater detail.

The first essay, "Incentivizing User-Generated Content—A Double-Edged Sword: Evidence from Field Data and a Controlled Experiment," addresses the conundrum faced by online platform managers interested in crowdsourcing user-generated content (UGC) in prosocial contexts. The dilemma stems from the fact that offering monetary incentives to stimulate UGC contributions also has a damping effect on peer approval, which is an important source of non-monetary recognition valued by UGC contributors in prosocial contexts.

The second essay, "Matching and Making in Matchmaking Platforms: A Structural Analysis," examines matchmaking platforms, focusing specifically on the problem of misaligned incentives between the platform and the agents. Based on data from the Ultimate Fighting Championship (UFC) on fighter characteristics, and pay-per-view revenues associated with specific bouts, we identify the potential for conflicts of interest and examine strategies that may be used to mitigate such problems.

The third essay, "Matching and Making in Matching Markets: A Managerial Decision Calculus," extends the empirical model and analytical work to a class of commonly encountered one-sided matching market problems. It provides the conceptual outline of a decision calculus that allows managers to explore the revenue and profitability implications of adaptive changes to the tier structures and matching algorithms.

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Keywords
Platforms, User-generated content (UGC), Crowdsourcing Contest, Matchmaking Platforms, Empirical Matching Model, Decision-calculus.
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