Essays on Investment Behavior in Online Social Platforms

University of Minnesota Ph.D. dissertation. 2018. Major: Business Administration. Advisor: Mani Subramani. 1 computer file (PDF); 109 pages.Interpersonal interactions have been the cornerstone of research in a variety of disciplines, including psychology, sociology, economics, and management. Naturally, any fundamental shift in this regard can have far-reaching research and practical implications. In the last decade or so, one such shift has been the emergence of online platforms. By building on the advances in the internet technologies, online platforms have emerged as the new routes for interactions between different social entities, ranging from individuals to governments. For instance, Facebook and MySpace allow individuals to form online social networks, share personal information through various forms of content, and create groups and communities. LinkedIn and GlassDoor extend the same functionalities to professional networks through which individuals can seek employment, know more about a potential employer, and review their current and past employers. Twitter allows users to share news at a speed that, at times, outperforms the traditional news media. The considerable variation in the activities, which online platforms facilitate is matched by the array of research questions that different literature streams have examined. For social psychologists, the central research question is how different stimuli ingrained in most human interactions play out in online platforms. As McFarland and Ployhart (2015) argue, this research question has a potential to not only theoretically distinguish online social platforms from traditional, offline social contexts but also formulate an extensive program for future research. Regarding interpersonal exchanges in organizational settings, research questions of interest include how online platforms shape the exchanges between internal as well as external stakeholders such as knowledge sharing among employees (Wu, 2013), and customer engagement using online platforms (Kumar et al., 2016). Next, scholars have also attempted to extend established economic mechanisms, including matching markets (Horton, 2014; Hitsch, Hortaçsu, and Ariely, 2010) and network effects (Katona, Zubcsek, and Sarvary, 2011) to online platforms. Lastly, by their very nature, online platforms align with the study of social networks. Kane et al. (2014) have posited a series of research questions, adopting the social network analysis (SNA) lens for studying online platforms. Evidently, online platforms have opened newer research avenues across multiple fields. The present dissertation contributes to this body of work. The increasing economic activity happening in the digital space is our primary motivation. Perhaps no other instance underscores this trend more than the online investment and financial platforms (Lee & Shin 2018). The rising prominence of these platforms is also reflected in the recent calls for research explicitly targeted towards “Fintech” (Gomber, Kauffman, & Weber 2015; Hendershott et al., 2017). Such platforms are particularly interesting because they allow users to carry out a personal activity in a highly visible and transparent setting. For instance, Venmo broadcasts a user’s personal transactions, including bill and rent payments to her network. Kiva and Prosper publicize the amount of money that each investor has given to a Crowdfunding campaign (Lin & Viswanathan 2015). Social trading platforms allow users to broadcast their investment decisions in stocks and Forex (Glaser & Risius, 2017). Clearly, one observes that personal investment decisions and actions are increasingly taking place in a social domain. Given this transition, it is worthwhile to examine whether and how a focal user’s investments are susceptible to other users’ investment actions and decisions (Burtch, Ghose, & Wattal, 2013). The dissertation addresses this question through a series of related empirical studies

Falling from Digital Grace: Participation in Online Software Contests Following Loss of Status

We focus on the effects of status loss on decisions to participate in subsequent contests in online coding platform. We advance the relevant literature in several ways. First, by considering the effects of status loss on resource expenditure, we depart from the prior status literature, which has predominantly looked at performance implications of the status loss. Second, because of the voluntary nature of online contests, we demonstrate how the effects of status loss manifest when permanent exit or abstention is possible. This aspect marks another departure from situations common to the prior work, wherein work demands persist regardless of status changes. Lastly, recognizing that status changes may be endogenous to one\u27s past resource expenditure, we study exogenous variation in status, exploiting a natural experiment wherein status assignments were adjusted overnight by the platform operator, in a manner completely independent of individuals\u27 prior activities, resulting in sudden loss of statu

Relational Embeddedness, Herding, and Tie Persistence

Recent studies on social network structures have focused on tie persistence as a distinct outcome in a tie life cycle. Tie persistence refers to continuity of a network tie across at least two consecutive time periods. We contribute to this body of knowledge by empirically comparing the influence of relational embeddedness and herding on tie persistence. We find that while both the mechanisms increase the likelihood of tie persistence, their co-presence creates a substitution effect. We find that individuals prefer to rely on relational embeddedness of a tie than following the crowd. Lastly, we also demonstrate the distinctiveness of tie persistence from other tie-related outcome by estimating the same effects for tie restoration. We discuss the implications of our findings for literature on social ties

Effect of Crisis Colocation on Online Prosocial Behavior

In this study, we examine how a project owner’s colocation with a crisis influences the chances of their project securing requisite funding. Our study draws upon and extends several streams of work, particularly the importance of owners’ location and the role of crisis in online prosocial behavior, namely online donations. Further, we project and empirically test an important theoretical tension. On the one hand, the altruism effect predicts that beneficiaries colocated with a crisis will likely attract more donations. On the other hand, the bystander effect indicates that donors may perceive lower importance of their contribution as the responsibility of aiding the affected gets distributed. Thus, the effect of crisis colocation on the beneficiary’s project is equivocal, requiring empirical assessment. We address this tension empirically using the occurrence of a hurricane as the external crisis coupled with coarsened exact matching. Drawing on a donation platform dataset that facilitates schools in the US to seek funds, we find empirical support for the bystander effect. Additionally, we find that the baseline effect is contingent on the racial makeup of the beneficiary’s location and the extent to which a crisis occurs abruptly. Our study has implications for the theory and practice of managing online prosocial behavior

The Influence of Status on Evaluations: Evidence from Online Coding Contests

In many instances, online contest platforms rely on contestants to ensure submission quality. This scalable evaluation mechanism offers a collective benefit. However, contestants may also leverage it to achieve personal, competitive benefits. Our study examines this tension from a status-theoretic perspective, suggesting that the conflict between competitive and collective benefits, and the net implication for evaluation efficacy, is influenced by contestants’ status. On the one hand, contestants of lower status may be viewed as less skilled and hence more likely to make mistakes. Therefore, low-status contestants may attract more evaluations if said evaluations are driven predominantly by an interest in collective benefits. On the other hand, if evaluations are driven largely by an interest in personal, competitive benefits, a low-status contestant makes for a less attractive target and hence may attract fewer evaluations. We empirically test these competing possibilities using a dataset of coding contests from Codeforces. The platform allows contestants to assess others’ submissions and improve evaluations (a collective benefit) by devising test cases (hacks) in addition to those defined by the contest organizer. If a submission is successfully hacked, the hacker earns additional points, and the target submission is eliminated from the contest (a competitive benefit). We begin by providing qualitative evidence based on semi-structured interviews conducted with contestants spanning the status spectrum at Codeforces. Next, we present quantitative evidence exploiting a structural change at Codeforces wherein many contestants experienced an arbitrary status reduction unrelated to their performance because of sudden changes to the platform’s color-coding system around contestant ratings. We show that status-loser contestants received systematically more evaluations from other contestants, absent changes in their short-run submission quality. Finally, we show that the excess evaluations allocated toward affected contestants were less effective, indicating status-driven evaluations as potentially less efficacious. We discuss the implications of our findings for managing evaluation processes in online contests

Effect of Status-based Gamification on User Engagement: Evidence from A Randomized Field Experiment

Although a plethora of mobile applications (Online platforms) use game design elements that imbibe a sense of excitement and achievement, there appears to be a research gap addressing the user’s susceptibility to Status Characteristics of the opponent in (dyadic) competitive digital environments. Through the online experiment on a mobile e-learning application, we are seeking to assess whether diffuse (e.g., gender) and specific status characteristics (e.g., competency) of the opponent influence user engagement. This research study aims to contribute to the literature on online gamification, user engagement, and status characteristic theory

What are Social Information Signals Worth? Evidence from Randomized Field Experiments

In this study, we examine how does social information drive user engagement in e-learning platforms. We model two distinct outcomes related to user engagement: content consumption CC (e.g., watching a video) and content organization CO (e.g., adding a video to a playlist). We examine two types of social information signals, which are distinguished based on the source: peer actions (PA) and expert recommendation (ER). We employ a series of field experiments on a mobile e-learning application to tease out the causal influence of PA and ER information signals on CC and CO. Our results indicate that the two information signals exert uneven influence, driving CC but not CO actions of user. These finding presents an important boundary condition for the influence of social information signals across the user engagement ladder. The study contributes to recent discussion on the potential value and impact of revealing information signals about other users’ behavior in digital platforms