Multi-sided Platforms Research Articles

Erratum to “Multi-sided platforms and innovation: A competition law perspective”

Erratum to “Multi-sided platforms and innovation: A competition law perspective”

Emergence of Multi-Sided Platforms: A Value-Based Perspective in Digital Health

The present paper aims at understanding the emergence process of a multi-sided digital platform by applying the value-based perspective of (digital) health. While new emerging multi-sided platforms (MSPs) play a critical role in the shift towards digital health, with the prevailing interest in the established and mature platforms, the platform emergence phenomenon is almost neglected. Existing research on MSPs has mainly focused on the value and growth of established platforms enabled by network effects and the aggressive attraction of more new users. Exploring the case of the Safe Steps healthcare MSP, the present paper revealed the fine-grained process of the MSP emergence that consists of the three phases, namely, 1) platform activation, 2) platform scale-up, and 3) shared values merger. Moreover, we found that shared between the platform actors’ values are the drivers of the platform emergence, platform actors’ attraction, and value creation. The present research contributes to the digital platforms literature, specifically, platforms emergence. Moreover, the paper put the break into an understanding of the nature of value creation of an MSP health platform.

Managing Multi-Sided Platforms: Platform Origins and Go-to-Market Strategy

Multi-sided platforms (MSPs) are becoming increasingly important in contemporary economies. This special issue of California Management Review aims to stimulate collective discussion among researchers and practitioners on advancing diverse types of MSPs and on better understanding their future development. This article analyzes five contributions to this special issue and explores the growth trajectories of MSPs. There are three types of platforms: born-platform, platform-born adjacent, and incumbent-born. And they rely respectively on three market entry strategies: market creation, market broadening, and market deepening. This article also spotlights the coopetition dynamics of the platforms.

Gaining Influence within Ecosystems and Platforms

Research on organizational ecosystems and multi-sided platforms has recently attracted a lot of scholarly interest. The structure of technological interdependencies varies across ecosystems, resulting in different governance and market structures. In this symposium we will not present a dichotomy between “decentralised” ecosystems and “centralised” platforms. Instead, we bring together ecosystems and platforms research by highlighting different types of interdependencies and by examining how organizations gain influence within these different ecosystem structures. Decentralized Innovation Platforms Presenter: Aija Elina Leiponen; Cornell U. Presenter: Llewellyn D W Thomas; IESE Business School Presenter: Qian Wang; Cornell SC Johnson College of Business Dominant Complementors: The Problem and a Solution Presenter: Natalie Jane Burford; INSEAD The Impact of Aggregators on the Performance of Companies Inside a Platform Presenter: Eduardo Boada; IE Business School Presenter: Juan Santalo; IE Business School Technology Disclosure Restrictions, Structural Holes, and Firms' Influence in Innovation Ecosystems Presenter: Qingqing Chen; The Wharton School, U. of Pennsylvania

“We’re Growing!”: How Platform Ventures Grow their User Base through Strategic Growth Announcements

How can providers of multisided platforms grow their user base? A central tenet in platform research is that user growth is driven by increases in a platform’s ecosystem, but this tenet rests on the implicit assumption that potential users attend to and perceive such changes. Such an assumption might be problematic in the case of platforms provided by new ventures (platform ventures) because attracting stakeholder attention generally represents a major challenge for any new venture. In this paper, we aim to address this complication by developing and testing theory about how platform ventures can strategically attract user attention through growth announcements – public claims about the growth of their ecosystem and user base. We study the performance consequences of growth announcements in the market for Massive Open Online Courses (MOOCs), in which new ventures like Coursera and Udacity launched competing MOOC platforms in 2012. Our fixed-effects time series of the monthly user growth of nine competing MOOC platforms between 2012 and 2021 shows that growth announcements substantially drive platforms’ user growth. We find that the benefits of growth announcements are strongly contingent on a platform venture’s pressure to attract attention – reflected in its prominence and the prominence of its direct competitors – and its ability to leverage its existing ecosystem to make compelling growth claims. We discuss how these findings contribute to research on platform strategy and cultural entrepreneurship.

Trade policy with FANG's (aka trade policy and multi-sided platforms)

The recent and rapid rise to prominence of the big-tech firms, collectively known as FANG's, owes much to their multi-sided approach. As economic activity shifts toward these business models, trade-agreements are being extended to ensure free trade in platform based products, guided by the logic and practice familiar from standard models (one-sided markets). Does this prescription automatically carry over to two-sided markets? We show that a world with FANG's can look and behave very differently from the more familiar one-sided setting, it's even possible for tariffs to lower prices, raise consumption and increase global welfare; the opposite of the one-sided result. We empirically explore the conditions for such outcomes and show they arise for a set of products recently added to the WTO's ITA, raising the possibility that policy errors are creeping into international-agreements from following one-sided logic in an increasingly two-sided world.

Intention to use Peer-to-Peer (P2P) Lending: The Roles of Perceived Structural Assurance and Perceived Critical Mass

Peer-to-Peer (P2P) lending platform has enormous potential to improve financial inclusion for people in emerging countries. In this regard, the present study examined the predictors of continuance intention to borrow from P2P lending, especially as a Multi-Sided Platform (MSP) that relied heavily on critical mass to succeed. This research was among the first that analyzed the behavioral intention of P2P lending from the borrower’s perspective by expanding on the technology acceptance model (TAM) with two fundamental latent constructs for MSPs, namely perceived structural assurance and perceived critical mass. This quantitative study used Partial Least Square Structural Equation Modelling (PLS-SEM). Online questionnaires were spread to P2P lending borrowers (n =174) from all over Indonesia to measure the latent constructs. The result revealed that all the exogenous constructs did not have direct relationships with continuance intention to borrow. However, perceived structural assurance and perceived ease of borrowing indirectly affected the endogenous construct through perceived usefulness as the mediating variable. This study also offers some managerial implications for the P2P lending industry.

Multi-sided platforms and innovation: A competition law perspective

We propose a simple theoretical model emphasizing the importance of a multi-sided platform (MSP) in fostering innovation. This model aims to assess the effects of structuring industries around an MSP on innovation dynamics and emphasizes the impact of cross-platform competition. It teaches us how to encourage cross-platform competition in terms of competition policy. The outcome is threefold. To begin, the presence of an MSP is critical for market innovation. Second, our findings indicate that skewed market power in favor of the MSP may stifle innovation in this industry, even if the negative impact on the industry’s rate of innovation is not immediately apparent. Finally, we demonstrate that industries with multiple MSPs have a higher rate of innovation. The model’s conclusions emphasize the critical importance of preserving the contestability of digital markets through competition rules enforcement. Even if the inherent technical characteristics of this industry result in a situation of dominance, competition rules should aim to preserve the possibility of market competition through, among other things, interoperability requirements, data portability requirements, and control of exclusivity clauses.

The multisided complexity of fairness in recommender systems

AbstractRecommender systems are poised at the interface between stakeholders: for example, job applicants and employers in the case of recommendations of employment listings, or artists and listeners in the case of music recommendation. In such multisided platforms, recommender systems play a key role in enabling discovery of products and information at large scales. However, as they have become more and more pervasive in society, the equitable distribution of their benefits and harms have been increasingly under scrutiny, as is the case with machine learning generally. While recommender systems can exhibit many of the biases encountered in other machine learning settings, the intersection of personalization and multisidedness makes the question of fairness in recommender systems manifest itself quite differently. In this article, we discuss recent work in the area of multisided fairness in recommendation, starting with a brief introduction to core ideas in algorithmic fairness and multistakeholder recommendation. We describe techniques for measuring fairness and algorithmic approaches for enhancing fairness in recommendation outputs. We also discuss feedback and popularity effects that can lead to unfair recommendation outcomes. Finally, we introduce several promising directions for future research in this area.

Reward or punish: investigating output controls and content generation in the multi-sided platform context

PurposeE-commerce content platforms are a typical type of multi-sided platform that combines transactions with social media platforms. To solve the managerial dilemma of balancing the tension between control and autonomy of influencers' output performance, this study aims to investigate how exercising output controls through performance rewards and performance punishments impact the quantity and quality of influencers' content generation.Design/methodology/approachChoosing JD WeChat Shopping Circle as the research context and leveraging the introduction of a double commission subsidy policy and a removal policy as quasi-natural experiments, this study applied the difference-in-differences (DID) method to empirically test hypotheses.FindingsPerformance rewards incentivize influencers to generate high-quality content, but such incentivizing effects attenuate over time. Performance punishment drives influencers to generate expected pieces of high-quality content, and such safeguarding effects accentuate over time.Originality/valueThis study proposes output controls as an important form of governance mechanism in multi-sided platforms and substantiates how rewards and punishments as two facets of incentives affect complementors' behaviors. In addition, by distinguishing performance-contingent rewards from completion-contingent rewards, this study helps resolve the mixed findings on the effects of monetary rewards in the user-generated content (UGC) literature.

Multi-sided platforms in competitive B2B networks with varying governmental influence – a taxonomy of Port and Cargo Community System business models

Our knowledge on differences in business model characteristics of thriving and failing Multi-Sided Platforms in competitive B2B networks (B2B-MSP) and potential influences of increasing governmental involvement remains fragmented. This study develops a taxonomy to classify special B2B-MSP with varying governmental influence in the supply chain and transportation context, viz. Port and Cargo Community Systems (CS). Based on the classification of 44 international CS, we identify four archetypes using cluster analysis. The taxonomy provides practitioners with a differentiated view on the configuration options of CS business models including the involvement of governmental institutions, while the presented archetypes contribute an aggregated view of CS business models. The statistical analysis of our results provides initial explanatory approaches on CS business model dimension interdependencies, thereby laying the basis for a deeper understanding of sectoral and geographic differences of B2B-MSP and their diffusion dynamics as well as facilitating a higher contextualization of future research.

A Coat of Many Colours—New Concepts and Metrics of Economic Power in Competition Law and Economics

Abstract The digital economy has brought new business models that rely on zero-price markets and multi-sided platforms nested in business ecosystems. The traditional concept of market power used by competition authorities cannot engage with this new reality in which (economic) power manifests beyond price and output within a relevant market. These developments have culminated in multiple recent calls for a more multidimensional concept of power. Consequently, suggestions over new concepts of power triggering antitrust/regulatory intervention, such as ‘strategic market status’, ‘conglomerate market power’, ‘intermediation power’, ‘structuring digital platforms’, or ‘gatekeepers’ have proliferated to complete, or even substitute, the archetypical concept of market or monopoly power in competition law. However, a theoretical framework for this multidimensional concept of power that can set the basis for new metrics is missing. This article makes three contributions in that direction. First, we conceptualize different forms of (economic) power that go beyond competition within a single relevant market in terms of competition law and economics. Second, we propose new metrics to measure two forms of power: panopticon power and power based on differential dependency between value co-creators. Third, we test the latter and show how they could reduce false positives and false negatives when assessing dominance.

How do entrepreneurs create indirect network effects on digital platforms? A study on a multi-sided gaming platform

ABSTRACT Digital platforms play a central role in today’s market-based competition. To build a successful platform, entrepreneurs must pursue indirect network effects and shape multiple sides of the platform. However, the extant literature provides only a meager understanding of how entrepreneurs can create such indirect network effects. To better understand how this can be done, we conduct a case study that longitudinally traces 16 years of digital game platform growth as the entrepreneurs bring the platform successfully into multiple markets. The analysis advances theorising of the entrepreneurs’ repertoires of moves seeking to increase the number and variety of platform participants conducive to creating indirect network effects. The findings indicate that early moves focus on creating technical solutions that overcome technical challenges and permit platform scaling, whereas later moves seek to create a more flexible and generalisable platform architecture that allows a wider range of interactions. The findings make several contributions to the digital entrepreneurship literature by synthesising a dynamic model of entrepreneurs’ repertoire of competitive moves that will induce indirect network effects.

Financing green technology development and role of digital platforms: Insourcing vs. outsourcing

This paper investigates the green technology development (GTD) problem of a capital-constrained manufacturing entrepreneur who seeks financial support from external and internal multi-sided platforms (MSPs). Following the government's environmental policies, MSPs (i.e., outsourcing and insourcing alternatives) determine their strategies and offer platform-driven solutions to the manufacturing entrepreneur pursuing green innovation. Using benchmark models, we first analyze decisions made by the manufacturing entrepreneur and the MSP under the deregulated scenarios. We then develop a three-level game-theoretical model and sequentially characterize the decision-making behavior of players under three platform power structures. The model outcomes are compared by considering the government's policymaking approach and platforms' power structure. Results reveal that, when coupled with appropriately designed trade-credit and revenue-sharing mechanisms and the government's innovation-based social welfare approach, the internal MSP system always outperforms the external alternative. Our study demonstrates that a win-win agreement among GTD players can only be achieved if the MSPs take the balance of power and remain committed to empowering the initiated sustainable ecosystem. In power struggle scenarios, however, GTD players prioritize the internal MSP over the external MSP. To fulfill the GTD goals, players are encouraged to use their structural and legislative power and adjust their strategies, investment decisions, and power preferences accordingly.

Judging a book by its cover?: analysing the Indian approach to defining platform markets

ABSTRACT One of the challenges before competition law today is to develop criteria for market definition in platform markets. The traditional tests for market definition do not serve to identify the boundaries of competition in multi-sided platforms due to the complexity of competitive constraints operating on each side of the platform. An important question that arises is whether platforms should be defined as one or separate markets on each side. The Competition Commission of India (CCI) has generally defined platform markets from one side only. However, academic literature suggests that certain platform markets should be defined from both sides of the market. This paper argues that the CCI should use a framework of market definition that accounts for interdependencies on both sides of the platform and provides clearer guidance for when platforms may be defined from one or both sides. Applying this framework, the paper finds that the CCI did not account for certain sides of Google’s search platform. This prevented the CCI from evaluating the harm to third party content providers from Google’s conduct. Further, by overlooking the multisided nature of Oyo’s platform in its market definition, the CCI disregarded the sources of power and competition in this market.

Institutional intervention in technology innovation: the struggle to increase mobile payment adoption

PurposePlatform-driven business models have witnessed a significant proliferation in emerging economies. Such initiatives bring cost-effective services to a larger section of the population, given the reach of mobile phones. Drawing insights from the institutional theory and theories on the multisided platform, this paper aims to examine the impact of institutional intervention and platform competition on the initial adoption and continuance intention of platform-based payment services.Design/methodology/approachThe research model is empirically developed through a unique single-case study covering the high-value banknote demonetization in India that was initiated in November 2016. The research is primarily based on archival data and is supported by a limited number of interviews.FindingsThe research finds that institutional interventions (in multiple forms) have increased people’s eagerness to use mobile payment. Supportive institutional environment and common citizen’s increased eagerness for mobile payment usage resulted in the emergence of multiple mobile payment platforms. Moreover, competition among multiple payment platforms positively impacts the continuance intention of users to use mobile payments.Originality/valueThe research supplements the present understanding of the technology adoption challenges. The study highlights that the relative success of technology adoption cannot be attributed only to the users’ economic or technological motives, as embodied in the adoption models. Carefully designed interventions by the institutions can reduce users’ inertia in using new technology and positively influence the emergence of multiple platform-based service providers.

Multi-Sided Platforms – Legal Implications of Definitional Gaps

Multi-Sided Platforms – Legal Implications of Definitional Gaps

Common Typology of Virtual Communities and Multi-Sided Platforms. Analysis of Business Models Using Qualitative System Dynamics

Common Typology of Virtual Communities and Multi-Sided Platforms. Analysis of Business Models Using Qualitative System Dynamics

Examining the effect of radical innovation and incremental innovation on leading e-commerce startups by using expectation confirmation model

The purpose of this study is to compare the effect of strategic entrepreneurship through different innovation approach between two leading digital multi-sided platform (MSP) e-commerce startups, Bukalapak, that use incremental innovation approach, and Shopee that use radical innovation approach to face the business challenge during Covid-19 pandemic. Using structural equation modeling (SEM) with the partial least squares method, the researchers use an extended expectation confirmation model (ECM) from a customer point of view to analyze the effect of the innovation efforts. A questionnaire was distributed to people who purchased a Bukalapak or Shopee online shopping application during the covid pandemic with the purposive sampling method. Finally, the analysis was performed with a total of 300 samples from Bukalapak and Shopee users. The results show that confirmation positively impacts perceived enjoyment, satisfaction, and customer engagement in both Bukalapak and Shopee cases. The results also show that perceived enjoyment and satisfaction engagement positively impact continuance intention as the manifestation of innovation. However, in the Bukalapak case that performs incremental innovation, the customer engagement is insignificant on continuance intention, while it is significant in the Shopee case that performs radical innovation. This study suggests enabling the customers to engage more in an e-commerce platform through a radical innovation approach by providing services beyond e-commerce scope (ex: mini-game, gamification activities, etc.) will likely lead to favorable responses and lasting relationships.

Strategic entrepreneurship for achieving customers repurchase intention amidst pandemic COVID-19 on digital multi-sided platform: A case of Traveloka

The aim of this study is to understand a strategic entrepreneurship on digital multi-sided platform, Traveloka. The variables use is customer service, public service ads, brand image, trust, and repurchase intention. A 110 data collected using Google Form with purposive sampling technique and analyzed using PLS-SEM. The result shows that customer service has a direct and indirect influence through trust on the repurchase intention. Whereas public service ads have no direct and indirect influence on repurchase intention. Trust fully mediates brand image on repurchase intention. This paper contributes to the current understanding of attitudes in the tourism industry within the pandemic period, especially relating to the customer repurchasing behavior towards the online travel agent. The study proved that strategic entrepreneurship is essential to survive in a volatile environment for superior performance.