Strategic Platforms in the Digital Age

Platforms, or intermediaries that serve two distinct user groups in a market, are becoming increasingly common in ecommerce and digital marketing since the advent of web 2.0. This dissertation examines the role of three platforms that facilitate marketing interactions between two distinct user groups. In the first essay, Daily Deal Websites as Matchmakers, I examine the role that daily deal websites (e.g., Groupon, LivingSocial) serve in matching consumers and vendors. Specifically, I am interested in how competition between multiple platforms may segment both sides of the markets and allow each daily deal website to play the role of matchmaker. However, I also show that segmenting both sides of the market is difficult and this may explain the demise of many of these websites. In the second essay, Crowdfunding as a Vehicle for Raising Capital and for Price Discrimination, I investigate an entrepreneur’s optimal decision to set instruments available in a crowdfunding (e.g., Kickstarter, Indiegogo) campaign (campaign goal and funder reward). I find that conditional upon market conditions, consumers’ interest in the proposed product, and the entrepreneur’s need to fund the product through crowdfunding, that the entrepreneur may choose to set his instruments to either raise capital or to price discriminate. In the third essay, Setting Artist Royalties on Music Streaming Platforms, I investigate how a streaming platform (e.g., Spotify, Apple Music) may choose to set its royalty to attract artists to the platform. I explore when the streaming platform may choose to exclude high valuation artists