Does premium subscription pay off? Evidence from online dating platform

Abstract

While freemium business model is gaining increasing popularity, we are still unclear about how the IT-enabled premium features affect users' behavior. We study this question in the context of an online dating platform. Drawing support from the framework of purchase funnel, we decompose individuals' online dating behavior into three stages, including consideration, evaluation, and matching. We construct a daily panel dataset consisting of users' premium subscription information, micro-level behavioral data, and demographic information. Using propensity score matching in combination with difference-in-differences estimator, we evaluate the causal impact of premium subscription on users' behavior during the whole dating process. We find that premium adoption leads to an increase in outcomes at each stage. Namely, after subscribing premium, users visit more profiles, approach more people through private messages, and achieve more matches. However, premium features do not appear to enhance the efficiency of finding a match. This study extends the literature on freemium business model and online dating by investigating how the IT-enabled targeted search and information collection influence people's online dating behavior.

Publication Title

International Conference on Information Systems 2018, ICIS 2018

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