Multi-sided Market Research Articles

Fairness perceptions and payoff allocation preferences in the online food order and delivery industry: Evidence from a real experiment

Amid concern about the welfare implications of the revenue share model between food service establishments (FSEs) and food delivery companies (FDCs), academic contributions have been mostly theoretical. Within a conceptual framework of fairness, our empirical study provides a perspective from the third party in the multi-sided market: the consumer. Following an incentivized payoff allocation experiment with 500 English food consumers, we make three observations: (1) participants prefer to make allocations to FSEs as opposed to FDCs, (2) participants who perceive fairness as a social construct (honesty, responsibility) derive the most disutility from advantageous inequality and the least disutility from disadvantageous inequality in relation to FSEs, and (3) participants who perceive fairness as a structural construct (processes, outcomes) prefer more equal payoff allocations to FSEs and FDCs. The perception of price unfairness in the online food order and delivery industry is apparent, speaking to the need to find market and policy solutions.

Competitive dynamics in a multi-sided mobile payment platform market: an agent-based modeling perspective

PurposeThe purpose of this research is to develop a comprehensive model to better understand competitive dynamics between mobile payment providers in a multi-sided market featuring customers and merchants. This is undertaken by modeling customers performing financial transactions with merchants while two mobile payment systems (MPS) providers deploy different strategies to compete for market share.Design/methodology/approachThe authors developed an agent-based simulation model using the NetLogo environment. The simulation featured two competing platform providers, 1,000 customer agents and 50 merchant agents. Past research, interviews and surveys were conducted to accurately model the behavior of the agents. Each simulation run lasted for 50 time periods. A total of 1,024 experimental conditions were designed to model different competitive environments, and 50 replications were conducted for a total of 51,200 experiments.FindingsThe simulation model provides insight into MPS platform providers’ competitive strategies by simultaneously modelling socioeconomic interactions between customers, merchants and MPS.Research limitations/implicationsFrom a methodological perspective, the paper contributes a comprehensive model that can be used to study competitive dynamics between competing platforms in a multi-sided market. From the perspective of competitive strategies, the results show that pricing alone is not sufficient to influence MPS diffusion. Interactions between pricing, customers’ risk perception, perceived security and ease of use of the platform create unexpected same-side and cross-side network effects, which affect MPS diffusion.Practical implicationsWhile pricing remains a crucial lever for MPS to compete for market share, they should focus on enhancing customers’ and merchants’ trust and reduce their risk perception. This can be done through the improvement of the user experience of their platform, development of educational materials and marketing campaigns that address concerns around security, data breaches and perceived risk.Originality/valueThe paper is a direct response to a recent call for action on studying competition between MPS platforms by simultaneously modelling the socio-economic behavior of heterogeneous consumers and merchants. The proposed agent-based simulation model can be used to provide insights into competitive strategies and as a building block for subsequent research in this area.

온라인플랫폼 사업자의 자사우대 행위의 위법성에 대한 소고

In December 2023, the Fair Trade Commission announced that it would introduce the tentatively named ‘Platform Fair Competition Promotion Act’ to pre-designate ‘dominant online platforms’ and prohibit abuse of their market dominant position. The fundamental question is whether online platforms’ self-preferencing can be considered subject to regulation under competition law, and what are the standards for judging its illegality. These controversies include what is the basis for recognition of market dominant position in the online market under the current legal system and whether self-preferencing can be included as a regulatory type of abuse of market dominant position. The Monopoly Regulation and Fair Trade Act prohibits abusive practices of market dominant Position in the relevant market, resulting in the effect of restricting competition. But, it is not easy to determine whether a market dominant position exists or whether there is a competition restriction effect in online platform market. Despite this situation, the Fair Trade Commission is establishing legislative policies to preemptively determine dominant online platforms and prohibit their abusive practices. However, the limitations of the use of the SSNIP test in online platforms did not overcome in ‘the Naver shopping case’, and the theory of monopoly leveraging, which is intended to be applied to determine the effect of restricting competition, has virtually lost its value in the United States, and the related discussions in the EU are different from the judgment standards established in ‘the Posco case’ in Korea. Considering the characteristics of the online platform market, which has the possibility of infinite competition in a multi-sided market without regional restrictions due to technological development, and the efficiency enhancing effect that the various services provided by online platforms will bring, regulation of the online platforms must be cautious.

Price fairness in the online food delivery industry: a structural equation model of consumer perceptions

ABSTRACT There exist concerns about the fairness of the revenue share model between food service establishments and delivery companies, which often charge a commission rate of 20–30%. As the third party in the multi-sided market, the perception of food consumers may have bearing on potential market and policy solutions. With 500 survey responses from English food consumers, we inform perceptions of interactional, procedural, distributional, and overall price fairness in the online food order and delivery industry. On average, there is a 5% difference in perceptions of the actual commission rate (20%) and a fair commission rate (15%). Per the results of a structural equation model, procedural fairness and distributional fairness respectively have negative and positive relationships to overall price fairness. Interactional fairness is not related significantly to overall price fairness.

Ascending-price mechanism for general multi-sided markets

We present an ascending-price mechanism for a multi-sided market with a variety of participants, such as manufacturers, logistics agents, insurance providers, and assemblers. Each deal in the market may consist of a combination of agents from separate categories, and different such combinations are simultaneously allowed. This flexibility lets multiple intersecting markets be resolved as a single global market. Our mechanism is obviously-truthful, strongly budget-balanced, individually rational, and attains almost the optimal gain-from-trade when the market for every allowed combination of categories is sufficiently large. We evaluate the performance of the suggested mechanism with experiments on real stock market data and synthetically produced data.

How do you cope? Online medical consultation service uncertainty, coping strategies, and subsequent payment

Online medical consultation (OMC) based on a multisided market model is an increasingly popular healthcare service; however, encouraging consumers to continuously use the service and make an additional payment for service upgrades is challenging. One of the key inhibitors of such payments is consumers’ perceived uncertainty about OMC services. It is necessary to understand how consumers cope with OMC service uncertainty. Drawing on a theory contextualization approach, we identify three categories of service uncertainty relevant to the OMC from the literature, which are further contextualized in the qualitative and survey studies. Moreover, by adapting three well-established coping mechanisms (i.e., problem-focused, emotion-focused, and avoidance), we examine how healthcare consumers employ OMC-specific coping strategies when faced with OMC service uncertainty, as well as how these strategies impact subsequent payment for service upgrades. We tested our research model through a series of OMC consumer surveys along with structural model analyses. The results show that high OMC service uncertainty reduces problem- and emotion-focused coping strategies but increases the avoidance strategy. The perceived value of OMC moderates the effect of uncertainty on both problem-focused coping and avoidance. Emotion-focused coping is positively associated with subsequent payment intention, whereas avoidance has a negative impact.

Free Digital Labor as a New Form of Exploitation: A Critical Analysis

The notion of Free Digital Labor has emerged at the center of scientific debate with the advent of platform capitalism. This notion denotes the apparently free activity that users perform on digital platforms, producing, often unknowingly, data without any monetary remuneration. It is therefore particularly useful in signaling the progressive loss of a clear distinction between working time and leisure time. The paradigmatic example of the valorization of these activities is provided by Google and Facebook. Their accumulation system is based on a multi-sided market logic, in which the extraction of user data is combined with online advertising. Recent debate has raised several objections to the notion of Free Digital Labor. Our aim is to clarify the terms of the debate and to revive the relevance of the notion of Free Digital Labor through a historical and theoretical analysis of the transformations of the relationship between capital and labor.

Streaming culture and a new wave of institutionalisation of audience measurement in China

This article examines the unfolding re-institutionalisation of audience measurement as the streaming culture reshapes the television industry in China. Following a brief introduction of the institutionalisation of the ratings culture, I examine how streaming platforms are reconfiguring audience measurement by tracing how various metrics are defined, used and valued by different platforms, in different contexts and across time. The analysis reveals continuing and new forms of informalities despite signs of convergence towards the use of algorithmic metrics, which are closely connected to streaming service providers’ self-serving interest in a multi-sided market. Next, I discuss how the disruption of the state’s near-monopoly in audience measurement in the traditional television industry breaks the regulatory inertia. I explain the dual-approach to institutional intervention by the state – the regulation of metric commodities through mandated calibration, and the launch of an official system as market alternative and policy instrument. I argue that the state intervention – through governance of and with algorithms – constitutes adaptive cultural governance serving ‘mass’ audience construction, and the regulation doubles up as a market response to serve the state’s intention to reclaim power in and over the market.

Platform based Innovation Ecosystems: Value Network Configuration Perspective

A platform-based innovation ecosystem links multiple markets and their corresponding stakeholders for joint value creation and innovation around a platform, and it is critical for the platform sponsor to manage the configuration efficiently for maximized value and survival. Through a multi-case study, we propose a configurational framework for platform ecosystems to analyze multi-stakeholder business structures, boundary decisions and their relationships. We define the context as for-profit business networks that leverage a digital platform to create multi-sided market circumstances and to engage partners as well as customers in joint innovation and value creation. Empirically we study five small to mid-sized digital information and communication technology platforms and their ecosystems. The discoveries elaborate on the four characteristic configurations and activities involved in the platform ecosystem management, and show configurational differences between open, semi-open, and closed innovation ecosystems. We propose the value-network configurations for the ecosystem, upstream producer, downstream consumer, and partner driven scenarios. Contradicting the existing literature, we argue that complementarities are created by two different producer actors and the consumption is influenced by two different downstream actors. We also argue that an internal production platform can be considered a platform ecosystem for innovation in the case of the extensive use of external knowledge and resource sources. The results extend the understanding of a platform ecosystem as a multi-layered configuration, and show what are the roles of different functions in the multi-layered structure.

On Contractual Power of Digital Platforms

Digital markets and platforms are increasingly important in commercial life, and the way contracts are formed between users and platforms in multi-sided markets raise many important legal issues. This article interrogates the nature of multi-sided market contracting, and raises questions regarding the binding of users to standard terms, especially extensive limitations of liability. Platforms also govern the terms between supply and demand sides, many of which are standardised and not necessarily bargained for by users on the platform. This gatekeeper role should entail a heightened level of responsibility. Digital markets, platforms, gatekeepers, contractual formation, contractual exclusions, limitations of liability

Consumer preferences for network liquidity and opponent quality in online poker

ABSTRACT Several online gambling platforms use marketplace business models where the operator facilitates wagers between players instead of directly banking games. There is a large theoretical literature on marketplace business models, but there is little empirical evidence that suggests how it may apply to gambler preferences or behavior. This study contributes to the understanding of consumers in gambling markets by testing multi-sided market theory in online poker. Using data collected from a diverse sample of online poker players (n = 719), this study empirically demonstrates how players value game availability and product quality. Our results show evidence of diminishing marginal returns to scale and benefits from product differentiation across a range of conditions found in the market. Consumers prefer that operators grow their networks when size is sufficiently small but would prefer more focus on the types of players added to games as the network grows. From a policy perspective, these findings provide support for using multi-sided market theory as a framework for taxation and licensure in gambling products.

Short Video Activism With and on Douyin: An Innovative Repertoire of Contention for Chinese Consumers

This article examines consumer video activism tactics in China and their impact on Chinese consumers and society. Drawing upon 56 semistructured interviews and a case study analysis of Chinese online consumer protest in 2018, we argue that short-video-activism tactics have become an innovative repertoire of contention for Chinese consumers and Douyin, the “sister app” of TikTok, has become a real-time updated database of this repertoire. Using Douyin as a case study, we argue that it plays three key roles in mediating Chinese consumer activism: a techno-cultural construct that affords highly heterogeneous users to present everyday experiences via short videos; a multisided market that profoundly affects the tactics consumers choose to amplify their voices; and a governing entity that both moderates content for its users and simultaneously is subject to government regulations.

Towards a Socio-Cognitive View on Digital Platform Firms: An Organizational Identity Perspective

In this paper we induce novel theory on the idiosyncratic nature and consequences of organizational identity in digital platform firms—i.e., intermediaries enabling interaction between market sides—such as Uber or Airbnb. Specifically, based on an inductive multi-case study, we distill four archetypes of organizational identities of digital platform firms, characterized by organization members’ idiosyncratic construals of their firm’s domain identity, i.e., traditional or transformative, and role identity, i.e., facilitator or connector, respectively: traditional facilitator, transformative facilitator, traditional connector, and transformative connector. We further induce nomological propositions as to how identity-infused patterns of interpretation render these firms to differ regarding their predominant multi-sided customer understanding and organizational structure as well as the openness of their platform design. Overall, we contribute by introducing a socio-cognitive perspective of digital platform firms, which enhances and challenges the so far predominantly transactional view on this central phenomenon of the digital economy, and show how this perspective opens up new ways to describe and explain differences between digital platforms. In particular, our organizational identity lens and thereon based theoretical framework provide hitherto unexplored cues into explaining interfirm variance in central elements of digital platform structure and patterns of behavior. Keywords: Digital platform; digital transformation; ecosystem; organizational identity; multi-sided market

New Media, Digitalization, and the Evolution of the Professional Sport Industry.

The professional sport industry achieved tremendous success in the traditional broadcast media age, established a multi-sided market and an effective business model for revenue growth. However, the emergence and proliferation of the new media technologies have drastically changed the media landscape, creating a much more complicated cross-media environment that unites popularity and personalization, structure and agency. Such a changing environment creates transformations within the professional sport industry, and adapting to these transformations will lead to the evolution of the professional sport industry and its success in the digital media age.

Retailer’s Dual Role in Digital Marketplaces

Digital marketplaces have entered the retail sector and have proven to be a successful business model compared to traditional retailing. Established retailers are increasingly launching digital marketplaces as well as participating in marketplaces of pure online companies. Retailers transforming to digital marketplaces orchestrate formerly independent markets and enable retail transactions between participants while simultaneously selling articles from their own assortment to customers in the digital marketplace (dual role). A retailer’s dual role must be supported by retail information systems. However, this support is not explicitly represented in existing reference architectures for retail information systems. Thus, we propose to develop a reference architecture for retail information systems that facilitates the orchestration of supply- and demand-side participants, selling their own articles, and providing innovation platform services. We apply a design science research approach and present nine architectural requirements that a reference architecture for a multi-sided market business model in retail needs to fulfill (dual role, additional participants, affiliation, matchmaking, variety of services, innovation services, smart services, aggregated assortment, and boundary resources) from the rigor cycle. From the first design iteration, we propose four exemplary, conceptual architectural patterns as a solution for the requirements (matchmaking for participants, innovation platform services, boundary resources, and aggregated assortment). These patterns can form a conceptual reference architecture that guides the design and implementation of information systems.

A Platform and Multisided Market for Translational, Software-Defined Medical Procedures in the Operating Room (OP 4.1): Proof-of-Concept Study.

BackgroundAlthough digital and data-based technologies are widespread in various industries in the context of Industry 4.0, the use of smart connected devices in health care is still in its infancy. Innovative solutions for the medical environment are affected by difficult access to medical device data and high barriers to market entry because of proprietary systems.ObjectiveIn the proof-of-concept project OP 4.1, we show the business viability of connecting and augmenting medical devices and data through software add-ons by giving companies a technical and commercial platform for the development, implementation, distribution, and billing of innovative software solutions.MethodsThe creation of a central platform prototype requires the collaboration of several independent market contenders, including medical users, software developers, medical device manufacturers, and platform providers. A dedicated consortium of clinical and scientific partners as well as industry partners was set up.ResultsWe demonstrate the successful development of the prototype of a user-centric, open, and extensible platform for the intelligent support of processes starting with the operating room. By connecting heterogeneous data sources and medical devices from different manufacturers and making them accessible for software developers and medical users, the cloud-based platform OP 4.1 enables the augmentation of medical devices and procedures through software-based solutions. The platform also allows for the demand-oriented billing of apps and medical devices, thus permitting software-based solutions to fast-track their economic development and become commercially successful.ConclusionsThe technology and business platform OP 4.1 creates a multisided market for the successful development, implementation, distribution, and billing of new software solutions in the operating room and in the health care sector in general. Consequently, software-based medical innovation can be translated into clinical routine quickly, efficiently, and cost-effectively, optimizing the treatment of patients through smartly assisted procedures.

How Does an Incumbent News Media Organization Become a Platform? Employing Intra-Firm Synergies to Launch the Platform Business Model in a News Agency

ABSTRACT Digital platforms have disrupted traditional news organizations, with new platform-based models gaining ground. However, the incumbents can defend their positions and reap the benefits of multi-sided market structures by establishing a platform business model themselves. We examine a case study of the Austrian News Agency (APA), which gradually formulated a strategy that resulted in a platform-based business model. Platform features were strategized and innovated over time and in phases, with the intent of creating value for customers on both sides of the platform. We found that APA’s platform transformation was enabled by a visionary value proposition backed by a trusted institution’s legitimacy and a co-operative organizational model that provided added incentives for the participating news media companies. The strategy and the business model emerged on the basis of external developments and internal realizations concerning the feasibility of the new platform strategy. Based on our results, we develop a framework for an incumbent strategy formation process towards a platform business model. This framework demonstrates the incumbent organization’s emergent, as well as deliberate, strategic ability to introduce platform features into its business model, based on unique intra-firm synergies with established parts of the business, and highlighting a potential for “incumbent advantage.”

A multi-sided market of personal data resource allocation: An empirical study of China’s car-hailing platform

The current rapid development of online car-hailing services creates a serious challenge to the existing paradigm of market governance and antitrust policy. However, the debate on the market structure of the car-hailing platform requires more empirical evidence to uncover its functions. This research adopts an interdisciplinary methodology based on computer science and economics, and including software reverse engineering tools applied to the interoperability of the terminal application and resource allocation model, to demonstrate the topological market structure of personal data resources allocation in China’s car-hailing industry. Within the discussion of the hybrid nature of technology and economy, the analysis results clearly show that China’s car-hailing platform services present a multi-sided market structure when seen from the perspective of personal data resource allocation. Personal data resource (PDR), that is considered an essential market resource, is applied as an asset transferred unhindered between platforms via the application programming interface, and thus, creating a new market allocation mechanism. The connection between the car-hailing platforms and social media platforms is an essential aspect of the market competition in the domain. As applications of online platforms increase in the global context, this research offers a new perspective in personal data resource allocation with implications for the governance of the platform economy.

Post-IPO Scaling Challenge and Delisting

Scaling up is important for many reasons. Yet, growth may bring not only the benefits of scaling but also its potential complications. This study examines the relationship between firm growth rate and survival especially focusing on how it could be influenced by business model complexity. Examining this question in internet firms circa 2000s, this study offers new insights on the effect of fast growth rate of post-IPO ventures. We found that in general a faster growth rate can improve survival but that relationship beyond a certain point, will reverse. Having a business model that operates in a multi-sided market, having a high level of complexity, also increases failure risk and shifts the optimal growth rate to be lower compared to operating in a single-sided market.

Data access as a big competitive advantage: evidence from China's car-hailing platforms

PurposeThe online platform is one of the essential components of the platform economy that is constructed by a large scale of the personal data resource. However, accurate empirical test of the competition structure of the data-driven online platform is still less. This research is trying to reveal market allocation structure of the personal data resource of China's car-hailing platforms competition by the empirical data analysis.Design/methodology/approachThis research is applying the social network analysis by R packages, which include k-core decomposition and multilevel community detection from the data connectedness via the decompilation and the examination of the application programming interface of terminal applications.FindingsThis research has found that the car-hailing platforms, which establish more constant personal data connectedness and connectivity with social media platforms, are taking the competitive market advantage within the sample network. Data access discrimination is a complementary method of market power in China's car-hailing industry.Research limitations/implicationsThis research offers a new perspective on the analysis of the multi-sided market from the personal data resource allocation mechanism of the car-hailing platform. However, the measurement of the data connectedness requires more empirical industry data.Practical implicationsThis research reveals the competition structure that relies on personal data resource allocation mechanism. It offers empirical evidence for governance, which is considered as the critical issue of big data research, by reviewing the nature of the data network.Social implicationsIt also reveals the data convergence process of the social system and the technological system.Originality/valueThis research offers a new research method for the real-time regulation of the car-hailing platform.