Jingcun Cao
Published: 2020
Total Pages: 129
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In my dissertation, I study the impact of interventions on the market structure dynamics and users' behavior with two essays. In the first essay, I investigate how import policy relaxation on foreign products will affect the dynamics of the market structure or the competitive relationships between domestic and foreign products with a natural experiment. In 2012, the Chinese government suddenly relaxed the import quota on foreign movies, increasing the number of foreign movies to be imported by an extra 70%. I find foreign movies of different quality tiers have differentiated effects on the sales of domestic movies. Moreover, the policy relaxation helps expands the market of domestic movies. Overall, this study sheds light on the impact of an influential policy relaxation on the market dynamics of a large emerging market. In the second essay, I further explore the impact of intervention on individual users' choice. Mobile app firms of non-advertising-based services face significant challenges when monetizing their free services. In practice there are two commonly adopted monetization strategies: (1) a soft-landing strategy, with limited free service provided to current users when it starts to charge, or (2) a hard-landing strategy, where all free services are terminated and only paid users retain access to the service. I implement large-scale randomized field experiments to test the effects of providing limited free services to existing users on their subscription willingness. Results suggest that users are more willing to subscribe in the hard landing condition. It also suggests that providing extra exclusive secondary offerings to subscribers hurts their subscription willingness because of the high evaluability of its low value. Further, a positive interaction effect exists between providing limited free services and exclusive secondary offerings due to the exclusivity value to paid users in the soft landing condition.