Workshop’s Topic: Social media influencers are a major source of information from which consumers can collect product quality signals before purchasing in today’s markets. While financially sponsored content has been the focus of regulatory scrutiny, the non-financial strategies in influencer marketing remains largely underexplored. This research studies the impact of embargoes - a non-financial strategy extensively used by firms to control the natural and timing of information disclosure by social media influencers on information provision and consumer choice. We construct a unigue panel dataset in the context of video games. Our data include the daily sales and followers of the top games on Steam, a leading gaming platform, and over 300,000 YouTube videos from top gaming influencers reviewing these games. Utilizing natural language processing techniques, we created an embargo index to quantify the influence of embargoes on social media content. Our analysis reveals that social media content under a greater influence of embargoes tends to be less informative and uses more positive language. Interestingly, we find that embargoes have a positive return in that social media content under a greater influence of embargoes is more effective in generating consumer followership and sales, even after controling for product quality. These findings suggest that consumers are not sophisticated enough to correctly infer product quality from social media content with missing information. We discuss the implications of our findings for information disclosure.

Time and Location: 10:00 AM (GMT+8), Room A523 (School of Management)

Language: Bilingual (Chinese and English)