Promotional Strategies on Online Platforms

Abstract

This dissertation studies various promotional strategies on online platforms by investigating their empirical impact and comparing different policies by analytic models. In three different context, product sampling on e-commerce platforms, online sales with limited inventory, and sampling campaigns on crowdfunding platforms, I delve into the mechanisms behind these promotional strategies to derive reliable explanations on their effects. In my first essay, I study the signaling effect of sampling size in physical goods sampling via online channels. By building a novel structural model, I find that sampling size serves as a positive signal of product quality, and the signaling effect moderated by product types. Further simulation on sampling threshold can help the platform control the scale of the sampling campaign. In my second essay, I study inventory disclosure policies for online sales with limited inventory. I compare the performance of several existing policies and propose a new policy which is optimal under mild conditions. I also simulate relative improvements of these policies in the numerical study. In the third essay, I study the sampling campaign in crowdfunding markets. Leveraging a structural model, I find that sampling campaign raises the awareness of more backers on the focal project but lowers backers’ utility of supporting the project in later stages of the campaign. I also analyze the effect of several signals in the campaign and discuss the aggregated impact of sampling on demand in each stage of the sampling campaign.