A paper by Alexey Rusakov and Tim Meyer (University of St. Gallen) received the Best Proposal Award for Rigor in Research by the Competitive Strategy Interest Group at this year’s Strategic Management Society conference.
Alexey Rusakov and Tim Meyer (University of St. Gallen) received the Best Proposal Award for Rigor in Research by the Competitive Strategy Interest Group at this year’s Strategic Management Society conference for their paper “Selective Promotion of Complements on Online Auction Platforms: Evidence from the Automotive Industry”
They study how online auction platforms can promote idiosyncratic, short-lived goods where traditional advertising fails. The empirical setting is the car auction platform Cars & Bids, where the platform owner releases promotional reviews on YouTube. These videos are treated as shocks to buyer attention. Analyzing over 9,000 auctions on “Cars & Bids” and over 44,000 auctions on the competing platform “Bring a Trailer”, the authors show that a promotional review raises the final sale price of a featured car by about 35% on average, and significantly increases bidding activity, especially within the first hour of the auction. To mitigate selection bias in which cars get promoted, the authors use an instrumental variable strategy—based on the geographical proximity of review locations to the platform owner’s residence. The authors also track spillover effects: similar cars listed at the same time benefit from increased attention, particularly for videos with higher view counts, but there is no evidence of spillovers to the rival platform. This shows that the benefits of promotion remain largely within the focal platform.
