Online, pure-labor service platforms (e.g., Zeel, Amazon Home Services, Freelancer.com) represent a multibillion-dollar market. An increasing managerial concern in such markets is the opportunistic behavior of service agents who defect with customers off platform for future transactions. Using multiple methods across studies, the authors clarify why and when platform exploitation occurs. The authors uncover the major problem it is for platforms and the financial liability that it causes. Interestingly, the results indicate that high-quality, long-tenured service agents enhance platform usage, but customers also are more likely to defect with such agents. Platform exploitation also increases with greater customer–agent interaction frequency (i.e., building stronger relationships). This phenomenon decreases agents’ platform usage due to capacity constraints caused by serving more customers off platform. 

Online innovation communities encourage innovators to build upon others’ prior work (i.e., remixing). This generative user innovation necessitates new theorization to better understand the interplay between characteristics of the source innovation and the community’s collective motivation. Motivation is a heightened concern in online communities where contributors often select which problems warrant their effort. This study improves our understanding of how the community’s motivations compel remixing and impact two aspects of the depth of these remixes (improvement and differentness). Using data from thingiverse.com, we show that established motivations for user innovation (enjoyment, learning, use-value) motivate remixing, but learning and use-value’s effects are moderated by source innovation quality.  We also demonstrate that originality of the source object has an inverted-U relationship with remixing; innovations need to be novel, but not drastically different from expectations to generate a remix response from the community. 

Many platform markets consist of both a platform device (e.g., video game console) and corresponding software (e.g., video games). In such markets, new software introductions influence incumbent software sales. New entrants may directly cannibalize incumbents. However, entrants may also create an indirect halo impact by attracting new platform adopters, who then purchase incumbent software. To measure performance holistically, this article introduces a method to quantify both indirect and direct paths and determine which effect dominates and when. Results show that the direct impact often results in cannibalization which generally increases when the entrant is a superstar or part of a franchise. For the indirect halo impact, superstar entrants significantly increase platform adoption, which can help all incumbents. Combining the direct and indirect impacts, only new software that is both a superstar and part of a franchise increases platform adoption sufficiently to overcome direct cannibalization and achieve a net positive effect on incumbent software; all other types of entrants have a neutral or negative overall effect.

Platform-based industries are characterized by indirect network effects, wherein the utility of the platform (e.g., computer), and thus its sales, increases as more complements (e.g., software) become available. In platform markets, new product entrants and firms with smaller indirect networks are at a major disadvantage. Managers have been given little guidance on how to decrease their dependence on indirect network effects and still grow their markets. We examine the impact of platform envelopment—an innovation strategy in which one platform absorbs the main functionality of another (e.g., video game consoles absorbing the functionality to play DVDs)—on indirect network effects and the platform’s dependence on complementary software.  Our contribution lies in answering two critical questions. First, how can platforms decrease their dependence on indirect network effects stemming from complementary products? Second, how can platform envelopment help platforms better compete in the focal (non-enveloped) industry? We demonstrate that platform envelopment makes the platform less sensitive to software supply, a phenomenon we call decreasing indirect network sensitivity.  We find that the presence of platform envelopment not only increases demand for the platform but also decreases the importance of software supply to platform demand. 

This study is the first attempt to examine the effect of electronic word of mouth (user reviews) relative to expert reviews on movie going decisions. For the first time, we use time varying data on expert reviews. We find that expert ratings matter much more for movie going decisions than user ratings and volume.  Our data also shows that experts tend to be more critical but more consistent in their reviews than users. We find that experts, but not eWOM, affect wide release movie going, contrary to industry thinking. Finally, we show that experts’ reviews matter most when consumers and critics are in closer agreement about the quality of the film. 

We examine an increasingly popular open innovation practice called “design crowdsourcing”, wherein firms seek external inputs in the form of functional design solutions for new product development from the “crowd”. We investigate conditions under which managers crowdsource design and whether such decisions subsequently boost product sales. We find that three concept design characteristics—perceived usability, reliability, and technical complexity—are associated with the decision to crowdsource design. Further, we find that design crowdsourcing is positively related to unit sales and that this effect is moderated by the idea quality of the initial product concept. Using a change-score analysis of consumer ratings, we find that design crowdsourcing enhances perceived reliability and usability. We discuss the strategic implications of involving the crowd, beyond ideation, in helping transform ideas into effective products.

Proprietary retailer-sponsored web panels are growing in popularity.  We examine specific ways in which retailers may benefit from the creation of web panels and participation of customers in them.  A quasi-experiment conducted in the field with a large online retailer using eighteen months of data and a difference-in-differences estimation approach reveals significant economic benefits to the retailer from web panels beyond generation of useful customer information.  Web panel participation increased number of purchases by panel customers by 17%, cross-buying by 14%, and customer profitability by 36%. Contrary to conventional wisdom advocating moratoriums for respondents, we find that for web panelists answering each survey (up to a maximum of 27 in nine months) led to incremental positive effects with no evidence of tapering or reversal. Our results extend prior research and managerial implications regarding the question behavior effect by showing that proprietary web panels yield a substantial positive economic impact for retailers.