Engineering Digital Sharing Platforms to Create Social Contagion: Evidence from Three Large Scale Randomized Field Experiments
Posted: 10 Feb 2017
Date Written: February 7, 2017
Peer-to-peer information sharing has fundamentally changed customer behavior. More importantly, recent developments in information technologies have enabled digital sharing platforms to influence various granular aspects of this information sharing process. Despite the growing importance of digital information sharing, little research has examined the optimal design choices for a platform seeking to maximize returns from information sharing. My dissertation seeks to fill this gap. Specifically, I study novel interventions that can be implemented by the platform at different stages of the information sharing process. In collaboration with a leading for-profit platform and a non-profit platform, I conduct three large-scale randomized field experiments to causally identify the impact of these interventions on customers’ sharing behaviors as well as the sharing outcomes.
The first essay examines whether and how a firm can enhance social contagion by simply varying the message shared by customers with their friends. Using a large randomized field experiment involving more than 20,000 senders and 50,000 recipients, I find that small variations in message content can have a significant impact on both recipient’s purchase and referral behaviors. Specifically, I find that i) adding only information about the sender’s purchase status increases the likelihood of recipients’ purchase, but has no impact on follow-up referrals; ii) adding only information about referral reward increases recipients’ follow-up referrals, but has no impact on purchase likelihood; and iii) adding information about both the sender’s purchase as well as information about the referral rewards increases neither the likelihood of purchase or follow-up referrals. I then discuss the underlying mechanisms that drive these outcomes.
The second essay studies whether and how a firm can uncover the (self-, other-, or group-regarding) motives underlying an individual’s share and design customized incentive accordingly. I conduct a large field experiment to examine the impact of incentive design on sender’s purchase as well as further referral behaviors. I randomly assign more than 20,000 promotional emails to the sender who shared but did not purchase. I find evidence that incentive structure has a significant, but interestingly opposing, impact on both outcomes. The empirical results also provide valuable insights on senders’ motives in sharing.
The third essay examines whether and how a non-profit platform can design conditional group incentives to motivate donors to donate as a group. In collaboration with a blood bank in China, I combine a large field experiment involving 80,000 donors with a structural model to identify the effect of different interventions on donor’s self-donation and group donation decision. I find nonprofits can stimulate group effects and increase donations, but only with appropriate incentives. In summary, the findings from the three large-scale randomized field experiments offer valuable insights for firms on how to engineer digital platforms to create social contagion. The rich data from experiment also allow me to test the underlying mechanisms at work. In this way, the proposal will also contribute to our theoretical understanding of peer-to-peer information sharing.
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