INFORMATION TRANSPARENCY AND USER BEHAVIOR IN EMERGING ONLINE MARKETPLACES: EMPIRICAL STUDIES OF SOCIAL MEDIA AND OPEN INNOVATION MARKETS
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Web 2.0 and social media have significantly increased the amount of information available to users not only about firms and their offerings, but also about the activities of other individuals in their networks and markets. It is widely acknowledged that this increased availability of information is likely to influence a user's behavior and choices. However, there are very few systematic studies of how such increased information transparency influences user behavior in emerging marketplaces. My dissertation seeks to examine the impact of increased information transparency - particularly, information about other individuals - in two emerging platforms. The first essay in my dissertation compares online "social" marketing on Facebook with "non-social" marketing and examines their relative impacts on the likelihood of adoption, usage and diffusion of an "App". While social marketing - wherein a user gets to see which of her other friends have also "liked" the product being marketed- is one of the fastest growing online marketing formats, there are hardly any studies that have examined the value of the social aspect of such marketing. I find that social marketing is associated with increased app adoption, usage, and diffusion as compared to non-social marketing. The study also uncovers interesting tradeoffs between the effects of different types of "social" information on user behavior outcomes. The second essay examines the behavior of contestants in an open innovation design marketplace, wherein firms seek solutions from a crowd through an online contest. The study examines how the availability of information about other contestants as well as the availability of feedback information provided to others by the contest holder, impacts a focal contestant's behavior and outcomes. I find that contestants adopt different strategic behaviors that increase their odds of winning the contest under the different information-transparency regimes. The findings have interesting implications for the design of online contests and crowdsourcing markets. Overall, my dissertation provides a deeper understanding of how the visibility of different types of information in online platforms impacts individual behaviors and outcomes.