Hybrid governance of digital platforms: Exploring complementarities and tensions in the governance of peer relationships

Abstract

How do platforms integrate governance mechanisms that promote inherently distinct rules and incentives to manage peer relationships? Digital platforms combine market and community-based mechanisms to govern peer-to-peer interactions for value creation. However, these governance mechanisms play unique roles and interact in distinctive ways, thus shaping how platforms can leverage them for the governance of peer relationships. Through an analysis of sharing platforms, we identify under what conditions particular couplings of market and community mechanisms facilitate a stable governance configuration. We uncover how platforms leverage complementarities and avoid tensions among a set of core and elaborating governance mechanisms. The findings show that market and community mechanisms and their interactions constrain platform governance in different ways. When platforms have strong commercial identities and offerings, implement strict assurance instruments, or develop strong social institutions, they confine core mechanisms to a single governance structure and prevent innovative configurations. However, under specific conditions, platforms explore complementarities between market and community mechanisms which lead to either mixed or highly mixed governance configurations. The study uncovers platforms’ possibilities and constraints in developing stable governance configurations which hybridize market and community mechanisms.