2011- Working Papers: Marketing

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Multi-homing in two-sided markets:  An empirical inquiry in the video game console industry, 51 pp.
V. Landsman and S. Stremersch
(Working Paper No. 17/2011)

Two-sided markets are composed of platform owners and two distinct user networks that either buy or sell applications for the platform. This paper focuses on multi-homing—the choice of an agent in a user network to utilize more than one platform. It examines, in the video game console industry, the conditions affecting seller-level multi-homing decisions on a given platform. Furthermore, it investigates how platform-level multi-homing of applications affects the sales of the platform. The authors show that increased platform-level multi-homing of applications hurts platform sales, a finding consistent with literature on brand differentiation, but they also show that this effect vanishes as platforms mature or gain market share. The authors find that platform-level multi-homing of applications affects platform sales more strongly than does the number of applications. Furthermore, among mature platforms, an increasing market share leads to more seller-level multi-homing, while among nascent platforms, seller-level multi-homing decreases as platform market share increases. These findings prompt scholars to look beyond network size in analyzing two-sided markets and provide guidance to both (application) sellers and platform-owners.

 

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Telling ourselves and others who we are:  The role of brands, 48 pp.
L. Lasry, D. Ariely and R. Shachar
(Working Paper No. 21/2011)

People use brands not only for their functional attributes, but for their symbolic attributes as well. The symbolic attributes of a brand enable the individual who uses it to express, or signal, her identity. While most previous research has focused on the reasons people use brands and on the effects that this brand usage has on others, the aim of the current research is to explore whether, and how, a brand can produce a change in the user's own behavior and perceptions, and to explore the underlying mechanism of these effects. The current research aims to demonstrate that the consumer's behavior and perceptions depend (in the sense of causality) on the “personality” of the brand(s) s/he consumes and it's social visibility. Specifically, within the identity-signaling framework, the current research distinguishes between two types of signaling through brand usage: Private signaling, wherein signaling is visible to the user only, and Public signaling, wherein signaling is visible to others as well. We further examine these signaling effects under various conditions, such as desirable and undesirable as well as voluntary and involuntary signaling.  A series of eight studies, designed to explore research questions, is presented. The first study (A) demonstrates some counterintuitive results that show that identity signaling has a significant effect on the user's self-perception not only through public signaling, but even through private signaling (visible to the self only). Furthermore, results from study A demonstrate that the identity-signaling effect on the user can occur under an involuntary, compulsory, task. The first study also presents and validates a new experimental methodology for demonstrating identity-signaling effects; Study B replicates the results of study A, and elaborates by demonstrating the signaling effect on user's actual behavior. Furthermore, study B results suggest that the signaling effect on behavior is mediated by user's perception of others. Alternative explanations are then eliminated both theoretically (dissonance), and experimentally (reactance - study C, and priming - study D) and Studies E, F and G directly test and confirm the different aspects of this hypothesis, and provide deeper and more specific insight into the psychological mechanism. Finally, Study H examines the effects of free choice of the signaled identity (versus a compulsory task). The findings provide researchers, policy-makers, consumers, and marketers with an additional new understanding of the effects that brand usage has on the user's behavior and perceptions, and of a brand’s ability to influence them.

 

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