Tan, G., & Xu, Y. (2023). Competition in Freemium Services. Submitted to RAND Journal of Economics. [Link]
Abstract: We study how firms compete in the freemium strategy with an ad-sponsored free service and a paid premium service. We find that freemium is more likely to arise in equilibrium as the number of firms or the advertising rate increases. The equilibrium price for the premium service, which is affected by the presence of free services through a product-line-extension effect and a revenue-balancing effect, increases with the advertising rate, and may also increase with the degree of competition as the revenue-balancing effect diminishes. Two applications of our analysis, piracy and ad-avoidance technologies, are discussed.
Li, J., Pisano, G., Xu, Y., & Zhu, F. (2022). Marketplace Scalability and Strategic Use of Platform Investment. Management Science. 69(7): 3958-3975. [Link]
Chen, Z., Tan, G., & Xu, Y. (2023). Profitable Provision of Club Goods with Lottery.
Xu, Y. (2022). Delegated Bundling. [Link]
Optimal Mix of Dedicated and Flexible Supply in Digital Marketplaces (with Chiara Farronato)
Multihoming with Ride-Sharing Apps (with Jeffrey Fossett, Michael Luca, and Fiona Scott Morton)
Impact of Emerging LLMs on the Freelancing Market (with Nina Huang and Ping Tang)