Research

The rapid development of digital technologies enables new digital business models and creates alternative organizational forms. I study digital technologies and business models that exacerbate coordination difficulties among different players. Such coordination problems occur when players' interests diverge due to competition, cannibalization, preference heterogeneity, or information asymmetry. My research addresses a critical managerial challenge: how to coordinate the efforts of heterogeneous participants (with varying or even conflicting interests) to maximize total value creation? Combining empirical methods and analytical modeling, my research seeks to improve the value creation process through the design of information and coordination strategies.

My research starts with the role of e-Commerce in the multi-channel value chains, but has gradually moved towards multi-sided platforms as firms are transforming themselves into platforms (illustrated in the chart below). My works in these two closely related contexts share the common theme: designing information strategies to coordinate individual efforts when participants’ interests are not fully aligned. 

> Externalities & Coordination in Platform Ecosystems

In this context I study competition and coordination on digital platforms, where platform owners strive to coordinate the competing interests of individual participants in value co-creation. The coordination problem can occur vertically (platform owner vs. suppliers, suppliers vs. consumers) or horizontally (suppliers vs. suppliers, consumers vs. consumers). 

There are a variety of platforms across different industries. I focus on the coordination problem but do not restrict myself to a specific methodology or empirical setting. To enhance the generalizability of the findings, my research has covered several types of nascent platforms:

• Mobile app platforms (e.g., Android and iOS): competition and spillovers between first-party apps and third-party apps (Li and Agarwal 2017)

• Crowdfunding platforms (e.g., Kickstarter and DonorsChoose): coordination of individual efforts to maximize funding success under network externalities (Li, Duan and Ransbotham 2020) and preference heterogeneity (Song, Li and Sahoo 2021)

• On-demand delivery platforms (e.g., DoorDash, Grubhub and Uber Eats): cross-channel substitution and spillovers (Li and Wang 2021a; Li and Wang 2021b)

I combine multiple methods to gain complementary managerial insights: 1) analytical modeling (to investigate strategic interactions among players on the platforms, particularly when no good data source is available), 2) econometrics (to study firm strategies and consumer behavior leveraging large-scale longitudinal data), 3) structural models (to evaluate alternative platform policies), 4) machine learning (to identify nonlinear relations and hidden patterns leveraging the massive amount of unstructured data), and 5) field experiments (to establish causal effects and pin down the exact mechanism).

> Channel Conflict & Coordination in Digital Value Chains

In this context I study supplier encroachment, where an upstream supplier uses new distribution channels (e.g., online direct channel and e-Commerce store) to encroach on a downstream partner's business (intermediary channel). This phenomenon is observed in a number of industries. Just to name a few: retailing (e.g., manufacturers using online stores to sell directly to consumers); service (e.g., airlines/hotels offering their own reservation channel bypassing intermediaries); media (e.g., Disney introducing its own streaming service Disney+ bypassing Netflix); and mobile app ecosystems (e.g., Google/Apple releasing first-party apps for Android/iOS competing with third-party apps, Li and Agarwal (2017)).

The supplier's direct channel may hurt or help the downstream partner, creating substantial coordination issues in cross-channel interactions, such as information acquisition and sharing (Li, Gilbert and Lai 2014), multi-channel pricing (Li, Gilbert and Lai 2015), collaborative service provisions and social responsibility (Wang and Li 2021). 

I am particularly interested in the information issues (information acquisition, information sharing, and transparency) when firms simultaneously engage in cooperative and competitive interactions. For instance, Walmart has been well known for its willingness to share private demand/inventory information with suppliers. However, would Walmart still share such information with suppliers who can also sell through their direct channel? Would supplier encroachment change Walmart’s incentives to build its information advantage? These puzzling questions push me to investigate the interplay between material flow and information flow in the context of multi-channel value chains. The insights from my research provide implications for the optimal design of a firm’s information systems and data sharing strategies.

Publications (Google Scholar)

• • Ningning Wang and Zhuoxin Li. 2021. Supplier Encroachment with a Dual-Purpose Retailer, Production and Operations Management, Forthcoming.

  • Zhuoxin Li, Gang Wang and Harry J. Wang. 2021. Peer Effects in Competitive Environments: Field Experiments on Information Provision and Interventions, MIS Quarterly, 45(1), pp. 163-191.

  • Yicheng Song,  Zhuoxin Li and Nachiketa Sahoo. 2021. Matching Returning Donors to Projects on Philanthropic Crowdfunding Platforms. Management Science, Forthcoming.

  • Zhuoxin Li, Jason A. Duan and Sam Ransbotham. 2020. Coordination and Dynamic Promotion Strategies in Crowdfunding with Network Externalities, Production and Operations Management, 29(4), pp. 1032-1049.

  • Zhuoxin Li and Ashish Agarwal. 2017. Platform Integration and Demand Spillovers in Complementary Markets: Evidence from Facebook’s Integration of Instagram, Management Science, 63(10), pp. 3438–3458.

  • Zhuoxin Li, Stephen M. Gilbert and Guoming Lai. 2015. Supplier Encroachment as an Enhancement or a Hindrance to Nonlinear Pricing, Production and Operations Management, 24(1), pp. 89-109.

  • Zhuoxin Li, Stephen M. Gilbert and Guoming Lai. 2014. Supplier Encroachment under Asymmetric Information, Management Science, 60(2), pp. 449-462.

Selected Working Papers

• • Zhuoxin Li and Gang Wang. 2021a. The Role of On-Demand Delivery Platforms in Restaurants.

  • Zhuoxin Li and Gang Wang. 2021b. Regulating Powerful Platforms: Evidence from Commission Fee Caps in On-Demand Services.

  • Zhuoxin Li. 2021. Competition and Externalities in Online Charitable Crowdfunding.

  • Grace Gu and Zhuoxin Li. 2021. Technology Fragmentation, Platform Investment, and Complementary Innovation.

  • Raveesh Mayya and Zhuoxin Li. 2021. Growing Platforms by Adding Complementors without Consent.