and colleagues attending the UCL School of Management reading group for their feedback. We thank Jeanine Schouwenaars for assisting us in collecting data. We thank Gianvito Lanzolla for his editorial guidance as well as several anonymous reviewers who pushed us to improve upon our work. All mistakes are our own. THE COEVOLUTION OF PLATFORM DOMINANCE AND GOVERNANCE STRATEGIES: EFFECTS ON COMPLEMENTOR PERFORMANCE OUTCOMESMulti-sided platforms such as Apple's App Store and Valve's Steam become increasingly dominant when more end users and complement producers join their ecosystems. Despite their importance to a platform's overall success, however, we know little about complement producers and how they are affected by a platform's dominance trajectory: How does a platform's increasingly dominant market position affect performance outcomes for complementors? We explore this question by conducting a multiple case study on four market leading platform ecosystems over several years. We discover that, as a platform becomes increasingly dominant, the platform sponsor's governance strategies shift from being largely supportive of the wider complement population to becoming more selective and geared toward end users. These changes are associated with shifts in complementor performance outcomes.Though the value created at the overall ecosystem level increases as a platform gains dominance, average demand for individual complements decreases and becomes progressively concentrated. Furthermore, we find that prices for complements decline while the costs complementors incur increase. These findings are particularly salient in the context of digital platform ecosystems, where platform sponsors can seamlessly alter their technological infrastructures and implement changes to extend and solidify their dominant positions.

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Research Summary Freemium products require widespread diffusion for their success. One way to do this is by incorporating social features (e.g., multiplayer functionality, virtual collaboration, ridesharing), which can generate network effects and result in a product becoming a superstar. However, social features can be a double‐edged sword: When demand potential for freemium products is large, social features can significantly boost a product's appeal resulting in more adoption, more usage, and more in‐app purchases; but when demand potential is constrained, network effects might fall short and users may feel they are missing out on key aspects of the product. We test this dynamic on a sample of 9,700 digital games on Steam. Findings contribute to our understanding of network effects, freemium strategies, and superstar products in platform markets. Managerial Summary Freemium has become a popular business model among firms competing on digital platforms. Freemium products require widespread diffusion because most consumers do not pay for premium upgrades. One way to stimulate a product's diffusion is by incorporating social features (e.g., multiplayer functionality, virtual collaboration, ridesharing). Social features can boost a product's appeal resulting in more adoption, more usage, and more in‐app purchases. Our analysis of 9,700 digital PC games on Steam reveals that the efficacy of incorporating social features importantly depends on the number of users on the platform itself. Social features can help freemium products become a superstar when the platform's installed base is large, but they hinder a freemium product's success when the platform's installed base is small.

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