Information Use under Quality Uncertainty and Its Impact on the Success of Digital Goods Production

Amy Wenxuan Ding (emlyon business school)

The wide application of digital technologies has created an enriched digitized environment and changed many people’s lifestyles. People playing on their handheld devices and absorbed in online digital goods are ubiquitous. Such a digitized environment also provides a free and open playing field for average people to pursue various innovative digital activities such as digital goods production.

However, users face severe uncertainty on both the general quality and taste-match quality of digital goods, considering the lack of formal training of many average people as producers and the lack of standard criteria for producing such goods. So far, little is known about how users deal with the severe dual quality uncertainty issue in a digitized environment, which in turn influences producers’ successes in digital goods production in both short and long terms.

This research presents a novel theory-based AI model to address these issues. Empirical testing using real-world data provides strategies to users on quality inference, and offers actionable knowledge to  producers and the platform on how to design effective signal devices to build their user bases and earn revenue in the short and long runs.

This study thus sheds light on IT-enabled production by average individuals in digital goods markets.