Intra-platform Competition Research Articles

Channel power in platform businesses

Purpose This paper aims to review the latest management developments across the globe and pinpoint practical implications from cutting-edge research and case studies. Design/methodology/approach This briefing is prepared by an independent writer who adds their own impartial comments and places the articles in context. Findings The study examines how platform businesses exercise power in marketing channels, by exploring the role of intra-platform competition, AI and value co-creation capabilities. Originality/value The briefing saves busy executives, strategists, and researchers hours of reading time by selecting only the very best, most pertinent information and presenting it in a condensed and easy-to-digest format.

ORDERED SEARCH, INTRAPLATFORM COMPETITION AND AN INVISIBLE MARKET BOUNDARY—EVIDENCE FROM CHINESE E-COMMERCE PLATFORMS

Using data from three leading e-commerce platforms in China, we study the impact of the dispersion of sellers’ ranking positions on the price dispersion of homogeneous commodities. The major findings are as follows: The dispersion of the ranking positions of sellers weakens market competition and intensifies price dispersion. The dispersion of ranking positions has a heterogeneous effect on sellers’ pricing strategies with different ranking positions. In addition, under the combined action of search costs and long-tail effects in e-commerce markets, there is an invisible market boundary in online markets.

How e-commerce platforms build channel power: the role of AI resources and market-based assets

Purpose Considering the emergence of e-commerce platforms and their integration into marketing channels, this paper aims to investigate how artificial intelligence (AI) resources – both technological and human – possessed by e-commerce platforms can enhance their channel power by acquiring market-based assets (relational and intellectual). Design/methodology/approach Based on resource-based theory and resource orchestration theory, the authors developed a framework tested using survey data gathered from the sellers, which incorporated six key variables: the e-commerce platform’s AI technology resources and human resources, rational and intellectual market-based assets, intraplatform competition and channel power. The analyses are performed using the regression analysis technique. Findings The empirical findings indicate that both technological and human AI resources are crucial in building channel power. In addition, market-based assets serve as a mediator in this relationship, while intraplatform competition moderates the effect of intellectual market-based assets on channel power negatively. Originality/value This study contributes to the existing literature by exploring how e-commerce platforms’ AI resources affect their channel power. The results offer valuable guidance to managers and researchers on optimizing AI resources to improve channel power.

Business models, consumer data and privacy in platform markets

We examine the drivers of the accuracy of the consumer information collected by a digital platform. In an environment where consumers mind their privacy, we compare a pure-intermediation model, where the platform plays a matching function only, by connecting buyers and sellers, with a hybrid business model, where the platform also introduces its private label to compete with third-party sellers. We show that the platform’s incentive to collect demand information in the two models depends on the intensity of intra-platform competition and on its bargaining power vis-à-vis third-party sellers. When end-users perceive the platform’s private label and the third-party sellers’ products as relatively close substitutes (strong intra-platform competition) and the intermediary has a strong bargaining position in the negotiation with the sellers, it tends to acquire less accurate information under the hybrid model than in the pure-intermediation model, at the benefit of consumer privacy. Otherwise, more information is acquired under the hybrid model. These results shed new light on the link between alternative business models, consumer privacy and information collection in the digital sector, and may help explaining why some platforms tend to protect more consumer privacy than others.

An impact of local loop unbundling on investment in broadband networks

망세분화(local loop unbundling; LLU) 정책의 주요 목표는 신규 기업의 광대역 네트워크 투자를 촉진하는 것이지만, 규제의 실효성에 대한 논쟁이 끊이지 않고 있다. 본 논문에서는 디딤돌 효과 (stepping-stone hypothesis; SSH)에 대한 다음과 같은 기존 연구들의 한계를 보완한다. 첫째로, 설비기반 보급률(facility-based penetration rate)을 종속변수로 설정하여 네트워크 공급자들의 실제 투자의 정도를 반영한다. 둘째로, 비교적 최신 데이터를 추가하고 데이터를 두 기간(제1기와 제2기)으로 구분하여 SSH의 동태적 측면을 분석한다.<BR> 분석 결과, 기존 연구에서와 같이, 플랫폼 간 경쟁(inter-platform competition)은 설비기반 보급률을 증가시키는 것으로 나타났다. 설비기반 플랫폼 내 경쟁(facility-based intra-platform competition)을 촉진하는 망세분화 정책은 제1기와 제2기 모두 기존 기업과 신규 기업에게 네트워크 설비에 대한 충분한 투자유인을 제공하지 않는 것으로 나타났다. 더 나아가서, 서비스기반 플랫폼 내 경쟁(service-based intra-platform competition)은 제1기에는 기존 기업의 투자 유인을 약화시키며, 제2기에는 기존 기업뿐만 아니라 신규 기업의 설비 투자 동기까지 떨어뜨리는 것으로 나타났다. 위와 같은 분석을 바탕으로, 망세분화 정책을 통하여 설비기반 또는 서비스기반 플랫폼 내 경쟁을 도입하는 것이 네트워크 설비 투자를 유발하는데 효과적이지 않은 것으로 판단한다.

Intra-platform competition: the role of innovative and refinement evolution in app success

This study distinguishes between two types of app evolution based on its content: innovative evolution and refinement evolution. Drawing on product innovation and app evolution literature, we reveal the antecedents of those two types of evolution and their impacts on app success. The model was tested using a matched survey and objective data collected from 218 apps on Google Play. The results indicate that online customer monitoring routine is positively associated with both innovative evolution and refinement evolution. Furthermore, while refinement evolution is positively associated with app market performance, innovative evolution exerts its influence on app performance through refinement evolution.

On the Private and Social Value of Consumer Data in Vertically-Integrated Platform Markets

We characterize and compare the private and social incentives to collect consumer data by a vertically-integrated online intermediary who competes with third-party sellers listed on its platform and is required by regulation to share with rivals all the information it gathers. With linear intermediation fees and price competition, the intermediary over-invests in accuracy compared to the social optimum when the intra-platform competition is sufficiently weak and when demand is not too responsive to quality. By contrast, the intermediary tends to under-invest in accuracy when the intra-platform competition is strong enough, and demand is sufficiently responsive to quality. With quantity competition, the intermediary always over-invests in accuracy. Importantly, when consumers exhibit privacy concerns, the over-investment problem worsens, whereas the under-investment problem mitigates. We also investigate the impact of alternative (non-linear) contractual arrangements.

Intra-Platform Competition: Promises and Pitfalls of Platform Research for Organizational Theory

Digital platforms such as Uber, Airbnb, Etsy, and YouTube now play a prominent role in the global economy, and scholars have been quick to take note. Digital platforms have become powerful intermed...

Turning Tables: Understanding When, How, and Why Emerging Platform Complementors Outshine Incumbents

In the platform economy, entrants, despite significant losses, appear to challenge incumbents and alter industry architectures in more profound ways than I might have expected. This paper explores one of these cases, shedding light on when and why power shifts emerge, so that entrants take the driver seat, often with the support of incumbents. This inductive study of the Southeast Asian mobility-as- a-service industry explores how these dynamics unfold. I find that while incumbents often experiment with the new technologies that can lead to platforms, their need to grow consistently with their core offerings and organizational rigidities make them bypass these activities; or sometimes invest in entrants that engage in exploration. Once a platform emerges, incumbents do nothing to challenge it, and often support it, inasmuch as it serves some of their needs. Successful entrants ignore incumbents, while opportunistically pursuing relationships with a host of different actors and focusing on intra-platform competition. With platform leaders emerging, capital market support for entrants makes them oblivious to incumbent response, and incumbents gradually compete between them to support the platforms that ultimately challenge their dominance. This process is amplified by organizational changes, and by the growing role of managers who come from outside of the incumbent industry. Successful platform owners, on the other hand, continue to opportunistically reposition themselves with little regard to the focal sector structure.

Integration of Platform Features and Intra-Platform Competition: A Study in the Video Game Industry

We investigate the effects of complementors using technical features offered for optional integration by the platform operator in their own products. Drawing from three years of game sales data from the popular video game platform, Steam, we find that complementors generally benefit from aligning their product development with the platform. In particular, our results suggest that these benefits differ by the type of complementor. While major game developers increase their sales performance immediately as well as over time, niche complementors increase sales only over time as a result of integrating platform features. However, the effect over time is much stronger for niche complementors. Through our analysis, we argue that the digital technology foundation on which many digital platforms operate matters for intra-platform competition and we discuss these findings in the light of recent work on the digital platform ecosystems. Our study adds to the platform literature by highlighting the effects of integrating platforms features for the intra-platform competition and how these effects differ by the type of complementor.

Untangling Product Complexity on Digital Platforms: Implications for Platform Complementors

Platform-mediated industries have created large markets for complementor firms, resulting in vigorous intra-platform competition among them. On digital platforms, complementor competition tends to focus on products (end users often know the product name but not that of the complementor). Product strategy in platform complementor markets is therefore an important yet understudied topic. A key product strategy dimension is that of product complexity because adding features on digital platforms is facilitated by the intrinsic flexibility of software-based products and low appropriability regimes. Moreover, extant research suggests that product features are a major determinant of the level of demand for a complementor product. This paper addresses this research gap by exploring how product complexity affects the performance of digital platform complementors. We examine complementors’ performances from two perspectives, namely demand and operations, because it is the combination of the two that ultimately drives the impact on complementors’ performances. With regard to demand, we argue that product complexity has a positive association with perceived product quality, but an inverted U-shaped relationship with consumers’ product engagement. With regard to operations, we contend that product complexity increases the frequency of product maintenance while decreasing the speed of product adaptation to platform-wide changes. We test our hypotheses empirically in the context of a health and fitness application ecosystem in the Apple iOS App Store via a multi-method approach. We run panel data analyses on a manually collected dataset, supplemented with two online experiments to explore the underlying mechanisms behind our arguments, and to address endogeneity concerns.

The impact of intra-platform competition on broadband penetration

There has been an extensive debate about the role of broadband access regulation on market outcomes. This paper estimates the impact that the different modes of competition have had on broadband take-up to date, using a data set for EU27 countries. We find that ULL, which is one of main types of access-based competition in Europe, has had a positive impact on broadband take-up. However, the impact of ULL becomes smaller as its share increases. That is, ULL entry is less effective in areas where ULL take up is already high. Further, there is evidence of a crowding out effect between ULL and inter-platform competition. This means that ULL is less effective in enhancing broadband penetration in the areas where alternative networks already have a significant share of broadband lines.

Evolutionary Competition in Platform Ecosystems

Intraplatform competition has received scant attention in prior studies, which predominantly study interplatform competition. We develop a middle-range theory of how complementarity between input control and a platform extension’s modularization—by inducing evolution—influences its performance in a platform market. Primary and archival data spanning five years from 342 Firefox extensions show that such complementarity fosters performance by accelerating an extension’s perpetual evolution.

The stalemate of cable digital switchover: A study of competition effects and deregulation

This paper addresses the phenomenon of delayed cable digitization in Taiwan and reports the results of a longitudinal analysis, determining that (1) inter-platform competition, primarily from internet protocol television (IPTV), generates a strong and positive impact on the digitization of cable service after it acquires numerous customers; (2) the installed cable base induces economies of scale that increase its digital penetration; (3) the overbuild of the equivalent-size rivalry can increase digital adoption, whereas unequal-sized competition might reversely decrease it; and (4) the monthly flat fee charged to customers does not influence digital adoption. In addition, this paper presents a discussion on the policy instruments derived from econometric results. Although repealing the horizontal integration cap in the cable TV industry could generate economies of scale, doing so may encourage monopolization over several franchises. The efficacy of intra-platform competition is reserved only for certain cases. Combining the results of these analyses reveals that inter-platform competition most effectively stimulates cable operators’ digital conversion. Hence, regulators should create a level playing field among various TV platforms, such as equal programming access and open standards, to ensure a high degree of cable digitization

Determinants of broadband access: Is platform competition always the key variable to success?

Previous studies have identified the rivalry among technological platforms as one of the main driving forces of broadband services penetration. This paper draws on data from the Spanish market between 2005 and 2011 to estimate the main determinants of broadband prices. Controlling for broadband tariffs features and network variables, we examine the impact of the different modes of competition on prices. We find that inter-platform competition has no significant effects over prices, while intra-platform competition is a key driver of the prices charged in the broadband market. Our analysis suggests that the impact of different types of competition on prices is critically affected by the levels of development of the broadband market achieved by the considered country.

The Impact of Intra-Platform Competition on Broadband Prices and Speeds

Abstract What type of broadband competition has produced the best results for European consumers? To answer this question, the authors compare different types of competition for their impacts on both price and speed, using data from the EU27 countries for 2008–2011. They examine both inter-platform (DSL, cable, fiber, satellite, and wireless local loop) and intra-platform (unbundled local loop [ULL], bitstream, and resale) competition. The authors find that inter-platform competition and ULL access-based entry are both associated with lower prices and higher speeds, with inter-platform competition having the greater impact, and ULL being the most effective form of intra-platform competition.

The Impact of Intra-Platform Competition on Broadband Prices and Speeds

Abstract What type of broadband competition has produced the best results for European consumers? To answer this question, the authors compare different types of competition for their impacts on both price and speed, using data from the EU27 countries for 2008–2011. They examine both inter-platform (DSL, cable, fiber, satellite, and wireless local loop) and intra-platform (unbundled local loop [ULL], bitstream, and resale) competition. The authors find that inter-platform competition and ULL access-based entry are both associated with lower prices and higher speeds, with inter-platform competition having the greater impact, and ULL being the most effective form of intra-platform competition.

Competition enhancing regulation and diffusion of innovation: the case of broadband networks

Regulating former telecommunications monopolies has often been legally and technically complex. Among other options, incumbent operators were mandated to share, sell or split their infrastructure thus encouraging market entry. Given the importance of broadband technologies, competitive access has become a policy priority. We use data from 167 broadband markets over a period of 11 years. Firm and intra-platform competition on the incumbent’s legacy network (Digital Subscriber Line) accelerate adoption of broadband, whereas competition over different access technologies does not. The duration of the different regulatory effects shows that simpler network changes have a long-lasting yet delayed effect compared to technically demanding ones.

Competition Enhancing Regulation and Diffusion of Innovation: The Case of Broadband Networks

The paper assesses the scope for competition inducing infrastructure regulation in furthering the diffusion of innovation. The paper uses data on the adoption of broadband services comprising a global panel of 167 countries. The effects of different regulatory provisions are assessed. Inter-firm competition in general and intra-platform competition on the incumbent’s DSL network in particular accelerate adoption of broadband, whereas there is little evidence that inter-platform over different access technologies and intra-platform competition on cable have such effects. Retail competition has about a twice as strong effect than local loop unbundling in furthering diffusion. The effect deriving from service competition is more powerful than the effect of provisions that induce competitors in investing. The diffusion enhancing effect from regulatory access provisions however dissipates after 3-4 years. These results are robust under different hypotheses of reverse causality and taking into account regulatory metrics and variable endogeneity.

Access regulation, competition, and broadband penetration: An international study

The evolution of broadband penetration has shown substantial differences between OECD countries. This paper empirically investigates to what extent different forms of regulated competition explain these international differences. It distinguishes three modes of competition between broadband internet access providers that result from regulatory policies: (1) inter-platform competition; (2) facilities-based intra-platform competition; and (3) service-based intra-platform competition. In most countries these forms of competition co-exist although their intensity varies from country to country. Intra-platform competition may differ among countries depending on the degree of mandatory access obligations imposed by the regulator on the dominant network firm. Based on a sample of OECD countries, the analysis finds that inter-platform competition has been a main driver of broadband penetration. The two types of intra-platform competition have a considerably smaller effect on the broadband penetration. Linking these findings back to access regulation suggests that the “stepping stone” or “ladder of investment” theories might not provide the justification to impose extensive mandatory access obligations on DSL incumbents.