Two Essays on Value Creation in Platform Market

My two essays explore marketing strategies and problems associated with value creation in platform market. In essay 1, I study online, pure-labor service platforms (e.g., Zeel, Amazon Home Services, Freelancer.com). An increasing managerial concern in such platforms is the opportunistic behavior of service agents who defect with customers off platform for future transactions, labeled as platform exploitation. Using multiple studies (e.g., Interviews, Secondary data analysis, Experiments), the findings suggest that high-quality, long-tenured service agents may 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. These effects are stronger as service price increases (as higher prices equate to more fee savings), as service repetitiveness increases, and as the agent's on-platform customer pool comprises more repeat and more proximal customers. Finally, I provide managerial strategies to combat platform exploitation. In essay 2, I study bundling in product platform market (e.g., videogame-console bundle). Previous research largely focused on examining effects of introducing such bundles. Yet, few studies look at the strategic considerations regarding the bundle choice. In this research, I examine two important factors of system products, namely product lifecycle and network competitive position, that impact bundle introduction. Unlike previous research that assume a single firm decision, I utilize a two-sided matching approach that assumes hardware and software makers as independent and jointly making bundle decisions, thus both sides' preferences are considered. By analyzing a dataset of US video game industry that contains console-game bundles between 1995 and 2015, I found that bundling a high-quality or a new game at the later stage of console lifecycle can significantly increase payoff for both sides and bundling a high-quality game when a console is a market underdog (with least market share) can also enhance payoff for both. Whereas, bundling a new game with an underdog console may only benefit console maker but hurt game developer.