Uncertainty in the platform market: The information asymmetry perspective

Abstract

The platform market, where a platform serves as both market maker and regulator, has received increasing attention in recent years. Despite great success, the inherent uncertainty of the platform market has hindered its overall development. Previous papers have studied uncertainty by focusing on either sellers or products, ignoring a platform's significant effects. To fill this void, we propose and validate a new dimension of uncertainty in the platform market: platform uncertainty. To examine the systematic dimensions of uncertainty in the platform market and reveal its consequences and antecedents, we utilize the perspective of information asymmetry. Structural equation modeling is used to build a theoretical framework, and we then conduct a survey among 352 consumers of a leading commerce platform in China to collect our data. We use the partial least squares (PLS) method to validate our hypotheses. Our empirical analysis provides the results that follow: First, we confirm that platform uncertainty is not only distinct from seller uncertainty and product uncertainty but also impacts both of these aspects. Consumers' perceived platform uncertainty positively influences their perceived seller uncertainty and product uncertainty. Consequently, these three dimensions of uncertainty negatively influence consumers' purchase intention. We also find that platform uncertainty negatively and indirectly influences consumers' purchase intention by impacting seller uncertainty. We demonstrate that consumers' concerns about a platform's hidden characteristics and opportunistic behavior contribute to platform uncertainty. These two significant antecedents explain much of the variance in platform uncertainty.