Three Essays on Economics of Online Platforms

Abstract

This dissertation consists of three papers related to the economics of online platforms: one on e-commerce shipping, one on sports event attendance, and another on online concert ticket platforms.In the first chapter, we estimate online customer preferences on product price and promised delivery time using transactional level data set from JD.com. We find that promised delivery time has a significant impact on customers’ purchasing decisions. In addition, we find that, on average, female shoppers are more price-sensitive while male customers are more delivery time-sensitive. The gender difference in the delivery time preference continues to exist even after controlling for shoppers’ purchasing power and shopping behavior. The average willingness-to-pay (WTP) for one-day-faster shipping is less than 7 Yuan for female customers but close to 11 Yuan for male customers. In the second chapter, we apply a regression discontinuity design to estimate the local average treatment effect of a win on the attendance of subsequent games in professional basketball. Using National Basketball Association data from seasons 1980-81 to 2017-18, we find that home team fan bases react to recent outcomes, with an increase in attendance of approximately 425 attendants (2.69% of average attendance in close games) following a close win relative to a close loss. The increment is one-eighth of a recent estimate of the superstar effect. We do not find an attendance effect when the visiting team has a recent victory, which rules out externalities. The positive fan base response to narrow home wins relative to narrow losses suggests that recent luck is rewarded in sporting attendance. We discuss possible mechanisms and document a gradual decline in the attendance response that coincides with the rise of alternative means for viewing games and secondary markets for tickets. In the last chapter, we look into the online platform for concert ticket markets. Ticketmaster began listing both primary event tickets and secondary tickets on its marketplace in 2013. Ticketmaster charges a preset service fee for the primary market and a fixed percentage of resale prices for both sellers and buyers. This paper develops a theoretical model to demonstrate how this pricing structure functions as a two-part tariff on ticket scalpers and improves revenue for the platform. Both platform and consumers benefit from an active resale market in some cases, even though the equilibrium may not be socially optimal.