We consider the strategic use of information by an online platform to both guide consumer search through its product recommendations and influence sellers' targeting and advertising decisions. The model provides a unified view of personalized product recommendation and targeted advertising on...

Advertising is often delivered through media. The evolution of media technologies has transformed the advertising landscape over time. We present a model to understand this evolution, unveiling the role of media formats in advertising. The model features a media platform's control of a...

An increasingly common practice among media platforms is to provide premium content versions with fewer or even no ads. This practice leads to an intriguing question: how should ad-financed media price discriminate through versioning? I develop a two-sided media model and illustrate that price...

Although social advertising has grown to be one of the major online advertising channels in recent years, its effectiveness is not been fully understood. In this study, we use data from a large-scale field experiment on a major social media platform (WeChat Moments) to investigate how the...

Many products have similar or common attributes and are thus correlated. We show that when these attributes are uncertain for consumers, a complementarity effect can arise among competing products, in the sense that the lower price of one product may increase the demands for the others. This...

We show that some customers systematically purchase new products that flop. Their early adoption of a new product is a strong signal that a product will fail - the more they buy, the less likely the product will succeed. These customers, whom we call ‘Harbingers' [of failure], prefer products...

Although social advertising has become a major online advertising channel in recent years, its effectiveness is not fully understood. In this study, we use data from a large-scale field experiment with a major social media platform (WeChat Moments) to investigate how the display of social cues...

Royalty payment has been under heated debate in both the traditional art market and the newly emerged non-fungible tokens (NFTs) markets. In this paper, we investigate the role of royalty payments in the trading market with creators and buyers and explore how NFT platforms should design royalty...

There is substantial academic interest in modeling consumer experiential learning. However, (approximately) optimal solutions to forward-looking experiential learning problems are complex, limiting their behavioral plausibility and empirical feasibility. We propose that consumers use cognitively...

This paper examines firms' product policies when they sell an add-on (e.g., Internet service) in addition to a base product (e.g., hotel rooms) under vertical differentiation (e.g., four- vs. three-star hotels). I show that the role of an add-on differs; higher-quality firms prefer to sell it as...