The Spillover of Spotlight: Platform Recommendation in the Mobile App Market

42 Pages Posted: 13 Feb 2019

See all articles by Chen Liang

Chen Liang

Arizona State University (ASU), W.P. Carey School of Business, Department of Information Systems, Students

Zhan (Michael) Shi

Arizona State University (ASU) - W.P. Carey School of Business

T. S. Raghu

Arizona State University - W. P. Carey School of Business

Date Written: September 28, 2018

Abstract

Many e-commerce platforms offer editor-curated recommendation to help consumers overcome the difficulty of discovering and evaluating new products. While it is well recognized that the spotlight generated by editor recommendation has a positive effect on the sales of featured products, there is much less understanding in the literature on whether the spotlight influences the sales of other products that are not featured but are related to the featured products, and how this externality varies depending on the specific relationship between the featured and non-featured products. By leveraging a novel dataset collected from the mobile app market, this paper systematically investigates the spillover effect of platform-provided editor recommendation on three groups of related apps: apps by the same developer, apps with similar functionality, and the same app marketed on a different platform. We distinguish the two mechanisms that potentially drive the externality: the exposure spillover and the quality endorsement spillover. We find that the overall spillover effect is positive for all three groups, but the underlying mechanisms are different. For the apps by the same developer and the same app on a different platform, we find a significantly positive spillover of exposure, but the spillover of quality endorsement is weaker across platforms than within the same platform; for the functionally similar apps, the evidence on spillover of exposure is weaker than that for the other two groups and the spillover of quality endorsement is statistically insignificant. In addition, we also find the strength of the spillover effect depends on the salient characteristics of the featured apps such as price and user rating.

Keywords: platform recommendation, spillover effect, product discovery, mobile app market

Suggested Citation

Liang, Chen and Shi, Zhan (Michael) and Raghu, T. S., The Spillover of Spotlight: Platform Recommendation in the Mobile App Market (September 28, 2018). Available at SSRN: https://ssrn.com/abstract=3327901 or http://dx.doi.org/10.2139/ssrn.3327901

Chen Liang

Arizona State University (ASU), W.P. Carey School of Business, Department of Information Systems, Students ( email )

Tempe, AZ
United States

Zhan (Michael) Shi (Contact Author)

Arizona State University (ASU) - W.P. Carey School of Business ( email )

Tempe, AZ 85287-3706
United States

T. S. Raghu

Arizona State University - W. P. Carey School of Business ( email )

Farmer Building 440G PO Box 872011
Tempe, AZ 85287
United States

HOME PAGE: http://https://wpcarey.asu.edu/people/profile/192381

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