【公开学术报告】Off-Platform Threats in On-Demand Services

Off-Platform Threats in On-Demand Services

Guest Speaker:    Dr. Juan HE (National University of Singapore)

Date & Time:             9:30-11:00 (Beijing Time), Thur. 2nd, Dec. 2021

Zoom Meeting:   835 375 40770（Password: 974821）

Click Link:           https://us02web.zoom.us/j/83537540770 

ABSTRACT

Online platforms that provide on-demand services are often threatened by the phenomenon of leakage, where customer-provider pairs may decide to transact “off-platform” to avoid paying the platform commissions. What are the principal characteristics of services that render the platform more (or less) vulnerable to leakage? What are effective managerial levers that the platform can use to curb leakage? To address these questions, we develop two game-theoretical models that capture service providers' and customers' decisions on whether to conduct their business on or off the platform. In the base model, we assume that customers are equipped with information to select their desired providers on the platform, whereas in the extension, we assume that customers are randomly matched with available providers by the platform. Our analysis characterizes the conditions under which platform leakage occurs and explains the driving forces behind leakage, including provider pool sizes, average valuation of services, the cost of waiting and variability of arrivals and service times. Our results suggest that platforms can counter leakage by re-designing customer waiting process to reduce their perceived waiting cost and investing in provider training or tools to upskill providers. In addition, our comparative analysis of both information structures provides directional guidance about when information provision to customers is advantageous for the platform.