forbes.com
Platform Endorsements Boost Sales for Both Endorsed and Unendorsed Services
A field experiment shows Amazon's Choice-style endorsements increase endorsed service sales by 41% and unendorsed service sales by 3.1%, driven by consumer perception of higher platform quality; 67% of the overall order increase comes from unendorsed services.
- What factors contribute to the positive spillover effect of platform endorsements on unendorsed services?
- This unexpected positive spillover effect on unendorsed services is attributed to consumers perceiving higher overall platform quality when endorsed products are present. This perception drives increased engagement and purchases across the platform, benefiting both endorsed and unendorsed sellers.
- How does Amazon's Choice-style platform endorsement impact overall platform revenue and sales of both endorsed and unendorsed services?
- A recent field experiment on a major online freelance platform revealed that Amazon's Choice-style endorsements significantly boost both endorsed and unendorsed service sales. Endorsed services saw a 41% sales increase, while unendorsed services experienced a 3.1% rise, with 67% of the overall order increase stemming from unendorsed services.
- How can platforms optimize their endorsement strategies to maximize revenue and user engagement while ensuring fairness and avoiding anti-competitive concerns?
- Platforms can optimize endorsement strategies by targeting users most responsive to endorsements, maximizing returns. Further research could explore the optimal allocation of endorsements across different service categories and price points to further enhance platform revenue and user engagement.
Cognitive Concepts
Framing Bias
The headline and introduction emphasize the positive findings of the study, highlighting the increased sales and user engagement resulting from platform endorsements. The framing is largely optimistic and focuses on the benefits for both endorsed and unendorsed services, potentially downplaying any potential drawbacks. The positive framing is further reinforced by the concluding paragraph emphasizing the "win-win" scenario.
Language Bias
The language used is largely neutral and objective, using data and statistics to support claims. However, phrases such as "badge of honour" and "win-win scenario" introduce a slightly positive and celebratory tone. While not overtly biased, these phrases could subtly influence reader perception.
Bias by Omission
The article focuses primarily on the effects of platform endorsements on sales and user engagement, neglecting potential negative impacts such as the creation of monopolies or the potential for manipulation of the algorithm. While acknowledging concerns from merchants and policymakers, a more in-depth exploration of these concerns would strengthen the analysis. The lack of discussion on the criteria for choosing endorsed products is also a significant omission.
False Dichotomy
The article presents a somewhat simplistic view of the impact of platform endorsements, focusing heavily on the positive spillover effects while downplaying potential negative consequences or alternative interpretations. It frames the situation as a "win-win" without fully acknowledging potential complexities and counterarguments.