E-COMMERCE RETAIL OPERATIONS

Pingping Tang

This dissertation consists of three essays that examine key issues in e-commerce operations and digital platform competition. The first essay investigates the effects of Lightning Deal promotions on product performance. Using observational data, we analyze how product characteristics and quality signals influence participation in Lightning Deals and their subsequent impact on sales outcomes. The results show that Lightning Deal participation significantly improves product performance, but these effects are short-lived. We also find diminishing returns to repeated promotions, highlighting the importance of optimizing promotional frequency and timing. The second essay examines the impact of the frequent return indicator, a platform-generated signal that flags products’ return rate exceeds the platform’s suggested return rate for that product category. Using observational data, we analyze how this indicator affects product performance. Our findings suggest that products flagged with the frequent return indicator experience deteriorating performance. Furthermore, promotional activities often amplify the negative effects of the frequent return indicator on product sales. The third essay investigates how advertising spillovers shape firms' equilibrium quantities, prices, and advertising investments by developing a duopoly model in which advertising influences both own and rival demand through direct and spillover effects, and analyzing equilibrium outcomes under Cournot, Bertrand, and mixed Cournot Bertrand competition. We show that competition is not continuous in firm strength. When a market follwer’s market potential is significantly low, it remains largely inactive; once it exceeds a critical threshold, it transitions to active competition, expanding output, advertising, and profitability. Advertising spillovers equalize pre-existing competitive asymmetries, offering an explanation for why advertising advantages in platform markets often reinforce dominance rather than level competition.

E-COMMERCE RETAIL OPERATIONS

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