Based on an exploratory multiple-case study in two platform ecosystems, we develop a process theory that explains how and why different ways of practicing ecosystem-wide governance are more or less successful in navigating the tension between cocreated value and governance costs. Our process theory shows that how ecosystem-wide rules and values are practiced considerably varies and changes over time. Initially, governance practices follow ecosystem-wide rules; if and how practices shift toward going beyond the rules hinges on specific necessary conditions. Irrespective of which governance route is taken, the tension between cocreated value and governance costs is more successfully addressed if practices are sensitive to ecosystem-wide values. The online appendix is available at https://doi.org/10.1287/isre.2017.0701 .

Thomas L. huber is an assistant professor of information systems at the Institute of Information Systems at the university of bern, Switzerland. he received his Ph.D. in information systems from the university of bern, Switzerland. his current research focuses on the dynamics of IS governance and control. he has published several papers in conference proceedings such as the International conference on Information Systems, European conference on Information Systems, Americas conference on Information, EGOS (European Group for Organizational Studies) colloquium and chapters in two books (one on IS outsourcing and one on theory-guided modeling and empiricism in IS research).Thomas A. Fischer is head of the cIO Office at Franke Management, Switzerland. he received his Ph.D. in information systems from the university of bern, Switzerland. Previously, he worked as a senior consultant for Pricewaterhousecoopers. his research has focused on governance and control in IS outsourcing relationships. he has published several papers in conference proceedings, such as the International conference on Information Systems and European conference on Information Systems and chapters in two books (one on IS outsourcing and one on theory-guided modeling and empiricism in IS research).Jens Dibbern is a professor of information systems at the university of bern, Switzerland. his Ph.D. in information systems is from the university of Mannheim, Germany. his research focuses on outsourcing, offshoring, and design of collaborative systems for supporting distributed work. his previous works were published in MIS Quarterly, Journal of the Association of Information Systems, IEEE Transactions on Engineering Management, ACM SIGMIS Database, Information & Management, and others. he is past associate editor of MIS Quarterly and is currently on the editorial boards of ACM SIGMIS Database, MIS Quarterly Executive, Business & Information Systems Engineering, and Journal of the Association for Information Systems.ruDy hirschheim is the Ourso Family Distinguished Professor of Information Systems at Louisiana State university, baton rouge. he was previously on the faculties of the university of houston, Templeton college-Oxford, and the London School of Economics. his Ph.D. in information systems is from the university of London. his articles have appeared in numerous journals, including MIS Quarterly, Information SystemsThe first and the second author contributed equally to this work.absTracT: This paper develops a process model of how and why complementarity and substitution form over time between contractual and relational governance in the context of information systems outsourcing. Our analysis identifies four distinct process patterns that explain this formation as the outcome of interaction processes between key elements of both contractual and relational governance. These patterns unveil the dynamic nature of complementarity and substitution. In particular, we show that the relationship between contractual and relational governance oscillates b...

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In software platform ecosystems, the technological and structural peculiarities vest the platform owner with an extremely powerful position that puts any complementor at the mercy of the platform owner's actions. Paradoxically, it