IT Enabled Sophistication Banking

Globalization of financial markets resulting from both IT (particularly internet standards) and increasing homogeneity of regulation has strongly affected the environment, financial services companies are operating in. Given these changes on the market, innovation is not a choice, but a necessity to survive. Observable today, however, are defensive strategies and poor service quality. In this paper based on investments in trust relationships with customers we propose Sophistication (fit) Banking enabled by IT and qualified staff. While traditional markets are characterized by shrinking margins and declining shareholder values, which can easily be explained by considering the digital character of financial products, new intermediaries for customer-centered Sophistication (fit) Banking have the opportunity of becoming spiders in the web and increasing shareholder values constantly

Design of Review Systems – A Strategic Instrument to shape Online Reviewing Behavior and Economic Outcomes

As online reviews play a decisive role in consumers’ purchase decisions, e-commerce platforms are using review systems strategically to obtain a competitive advantage. However, the strategic potential can only be leveraged if the review system is designed appropriately. Research on the design of review systems and the effects of design choices has not yet been summarized or synthesized in a review article. We aim to close this gap by providing a scoping review. In our synthesis we posit that the design of review systems moderates the impact of online reviews on economic outcomes and the factors that drive the formation of reviews. After reviewing current research findings, we identify gaps and provide a research agenda covering three key themes: Design features, environments, and devices

Reviewing from a Distance: Uncovering Asymmetric Moderations of Spatial and Temporal Distances Between Sentiment Negativity and Rating (Forthcoming at Management Information Systems Quarterly)

How does reviewing a consumption experience from a psychological distance affect one’s online rating? Prior literature has found a positivity bias in the reviewing behaviors of consumers when they evaluate an experience from a spatial and/or temporal distance, e.g., a restaurant visit in another city. However, these results do not account for the unique context of online reviews, which involves publicly associating oneself with a (potentially negative) experience in front of others. Analyzing a dataset from a large online review platform, which enables us to observe reviewers as locals or as travelers, we find that the previously documented positivity bias is not present for consumption experiences that are characterized by a negative sentiment. Instead, we find that online ratings for negative experiences by travelers (i.e., reviewed from a psychological distance) are systematically lower than ratings for similar experiences by locals. Our analysis suggests that these results can be attributed to psychological distance enabling travelers to distance themselves from these experiences and thus allowing them to publicly associate themselves with lower ratings. These results improve our theoretical understanding of online reviewing behavior and help online review platforms in their efforts to de-bias their ratings

My Reviews are taken away, what about my Reputation? The Asymmetric Impact of Resetting the Review History on Mobile App Platforms

Online reviews turn less informative when a product’s attributes change over time, as is the case for digital goods such as apps. This limits the relevance of existing reviews for reputation building. As part of their platform governance, digital platforms have grappled with this relevancy problem, and in response, have explored various mechanisms to overcome it. One such distinctive mechanism in the context of apps is resetting online review history with the release of each app update. This resetting mechanism ensures that an app’s crowd-sourced reputation is based only on online reviews and their aggregated metrics, which are reflective of the latest app release. The worry is, however, that such resetting may result in a complete loss of app reputation upon updating. In this paper, we study the implications on app performance from this governance mechanism that resets an app’s online review history with each update. We are fortunate that a main player in the app platform market implemented such a mechanism, allowing us to empirically study economic consequences of tying this resetting mechanism with app updating. We exploit an instrumental variable approach that enables us to establish causality in our analysis. We identify asymmetrical impact across apps when their crowd-sourced reputation is reset. Our results show that for the small group of paid apps, updating has only a marginal impact on performance, if any. For the sizeable group of free apps, the results are more nuanced. Top-ranked “superstar apps” benefit from updating. All remaining free apps, however, take a big hit, which we attribute to their reputation being reset. We find that within this latter group some apps lose more than others contingent on their prior reputation. Our results help inform developers about their software updating strategies and app platforms about their governance choices to avoid adverse implications

On the Effectiveness of Self-Contained Reward Systems to Incentivize User-Generated Content (Under Review)

Many digital platforms rely on reward systems to incentivize the production of user-generated content. These platforms frequently resort to financial or peer-based reward systems. Both systems have drawbacks and limitations. Financial rewards such as vouchers can crowd out effort of the content contributor and induce a positivity bias to the user-generated content. Peer-based rewards, which are conditional on upvotes from peers, are used when crowds identify the best contribution or curation. Because online review platforms aim at incentivizing a variety of contributions at scale, they can hardly apply peer-based reward systems. It is undetermined whether gamification systems designed for self-contained rewards—where reviewers receive points and badges for their activities unconditional on upvotes from peers—can effectively circumvent these drawbacks and limitations. To empirically address this question, we draw on a data set of online reviews from Google Maps and Tripadvisor that we matched on a site level. Our identification strategy hinged on a natural experiment of Google’s self-contained reward system, Local Guides, being restructured such that particular reviewing activities were rewarded with more points. We found that self-contained reward systems avoid effort crowding out and positivity bias but do incentivize the production of user-generated content. Beyond that and in contrast to our expectation, we detected substantial positive spillover effect to the unincentivized task of submitting a rating without a textual review. Furthermore, we documented that the effectiveness of self-contained rewards differs across low- and high-expertise reviewers. Most importantly, our study shows that peer-based incentive mechanisms are no prerequisite for effective nonfinancial reward systems, and applying self-contained reward systems circumvents many negative side effects associated with financial rewards