Quantitative Marketing 1: Online platforms
(A2024-119603)

AUTHORS

Daniela Schmitt, Nova School of Business and Economics; Dominik Papies, University of Tübingen; Alina Ferecatu, Rotterdam School of Management, Erasmus University; Rafael P. Greminger, University College London, School of Management; Iris Steenkamp, Bocconi University; Yiting Deng, University College London; Xu Zhang, London Business School; Vladimir Pavlov, University College London

ABSTRACT

In the data-rich business landscape, effective decision-making hinges not just on data volume, but on the ability of firms and analysts to extract valid and actionable insights. Quantitative marketing, at the intersection of marketing, economics, statistics, and machine learning, therefore, remains pivotal in this era of data-driven decision-making. Against this backdrop, we aim to stimulate the application of advanced empirical methods and innovative quantitative marketing approaches within the EMAC community through a series of 5 special sessions. The four papers involved in this special session shed light on the trends emerging around online platforms, specifically with regards to privacy protection, accessibility and information asymmetry, pricing regimes, and wealth effects. In the first paper, the authors study the impact of privacy protections on consumers' purchasing behavior. Using Apple’s App Track Transparency (ATT) policy as an external shock and estimating a causal forest model within the difference-in-differences framework, the findings show that iPhone users spent more, used more coupons, and made more purchases through the brand's own mobile app post ATT. The results suggest that when consumers have control over their privacy, their trust is enhanced, which, in turn, can lead to a higher responsiveness to promotions. The second paper studies the impact of endorsements on online platforms. Using a generalized synthetic control method, the authors analyze a comprehensive panel dataset from an online doctor consultation platform and find that platform endorsement leads to higher demand for endorsed doctors. In turn, endorsed doctors raise their online service prices and quantity. The added services are paid services, even substituting some previously free services, raising concerns about healthcare accessibility and inequality. The third paper investigates the profit implications of centralized prices versus price recommendations for peer-to-peer platforms and the buyers and sellers operating on them. One of the findings reveals that platforms are not necessarily better off with centralized prices. When the variance of aggregate demand is large, price recommendations can be sustained in equilibrium and are often more profitable for the platform. The authors show that although price recommendations seem to encourage lower prices among sellers due to increased competition, this is not always the case. The fourth paper states that marketing research has often overlooked income effects. The authors examine online news subscription and consumption patterns, leveraging a price promotion of an online news platform and reveal an unexpected negative correlation between wealth and preference. Contrary to conventional models, reduced prices surprisingly led to increased consumption for some individuals, prompting exploration into these findings' implications for marketers and researchers.