Lateral Exchange Markets: How Social Platforms Operate in a Networked Economy

Abstract

Lateral exchange markets (LEMs) are sites of technologically intermediated exchange between actors occupying equivalent network positions. To develop an enriched understanding of these markets, the authors develop a more broad-based and differentiated understanding of peer-to-peer, sharing, and access-based markets. They focus on two key axes: the extent of (1) consociality and (2) platform intermediation. Drawing on these attributes, the authors theoretically deduce four ideal types—Forums, Enablers, Matchmakers, and Hubs. Each type provides value in a different way: Forums connect actors, Enablers equip actors, Matchmakers pair actors, and Hubs centralize exchange. Twenty organizational cases reveal insights into the failure, adaptation, and success of LEMs. Lateral exchange markets shift responsibility for personal and exchange security to relevant personal actors, to institutions, or to the governing algorithms of technology platforms. Extending the general proposition that sociality increasingly infuses market logics, the findings suggest a new frontier in which social resources and software platform algorithms interact as operand resources whose negative consequences (e.g., opportunism) require careful management through assurances and institutional arrangements matched to the type of LEM operation.

No one rides for free! Three styles of collaborative consumption

“…Araujo et al, 2010), and particularly "concerned markets" where "the economic and the social writ large are intricately entwined" (Geiger et al, 2014, p. 2) such as in the collaborative consumption context. Perren and Kozinets (2018) also argued that P2P markets are embedded with "consociality" and market norms, which can lead to social but commoditized, opportunistic, and ephemeral relationships.…”

“…Most collaborative consumption practices are made easier by online platforms such as Airbnb facilitating accommodation rental (Bucher et al, 2016;Habibi et al, 2016;Huber, 2017;Zervas et al, 2017), or LeBonCoin facilitating goods rental and second-hand sales (Herbert and Collin-Lachaud, 2017;Parguel et al, 2017;Philip et al, 2015). The main activities of a dual-sided platform relate to optimizing the exchange organization between peers and their competitive objectives (i.e., two distinct but interdependent value propositions are formulated), designing a governance system, while creating trust and reducing the perceived risk of P2P exchanges de Rivera et al, 2017;Einav et al, 2016;Kumar et al, 2018;Muzellec et al, 2015;Perren and Kozinets, 2018;Rochet and Tirole, 2006). Herbert and Collin-Lachaud (2017) also found that collaborative consumption is a repertoire of practices unified by a unique practice style dominated by activities linked to commercial exchange, but that these transactions are also associated with the alternative ideas of community, gift-giving, solidarity, and generosity.…”

“…Previous research on the sharing economy employed netnography, as activities are facilitated digitally and platforms gather communities of members interacting online (Corciolani and Dalli, 2014;Gollnhofer et al, 2016;Martin et al, 2015;McArthur, 2015;Perren and Kozinets, 2018;Scaraboto, 2015). Netnography is a research method situated between the vast searchlights of big data analysis and the close readings of discourse analysis (Kozinets, 2015), used here to provide insights on the ridesharing culture, experiences, and interactions between participants (e.g., communal exchanges, online rules, practices, innovative forms of collaboration and organization, and manifestations of creativity).…”

“…Third, collaborative consumption is facilitated by online platforms (e.g., BlaBlaCar, Airbnb) that enable the peer-to-peer (P2P) exchange of privately owned underutilized assets (e.g., seats, accommodation) with no employees involved (e.g., Benoit et al, 2017;Hamari et al, 2016;Zervas et al, 2017). Most empirical research on the sharing economy is concerned with the traditional B2C facets of the phenomena, whereas this paper focuses on the P2P collaborative consumption practices that deserve more academic attention (Kumar et al, 2018;Oyedele and Simpson, 2018;Perren and Kozinets, 2018). Belk (2014bBelk ( , p. 1595 emphasized that "sharing is a phenomenon as old as humankind, while collaborative consumption and the 'sharing economy' are phenomena born of the Internet age."…”

“…Critics argue that private resources were already shared in close social circles (e.g., ridesharing among friends, hitchhiking) before online platforms incorporating social relations into matchmaking business models and misusing the words sharing and community (Belk, 2014a(Belk, , 2017Scholz and Schneider, 2016). As such, several studies have described ideological tensions across sharing economy practices, between market-mediated exchange norms with aspects of profitmaximization, self-interest, and utilitarianism; and non-market social norms with elements of solidarity, mutuality, generalized reciprocity, and communal belonging (Albinsson and Perera, 2012;Eckhardt and Bardhi, 2016;Habibi et al, 2016;Herbert and Collin-Lachaud, 2017;Martin et al, 2015;Perren and Kozinets, 2018;Scaraboto, 2015;Schor et al, 2016). For instance, BlaBlaCar rebranded its ridesharing platform with a more mature visual identity emphasizing the personal connections (e.g., conversations), high levels of trust (almost as much as close social circles), and enriching exchanges between its community members, while hoping to justify its criticized commission (considered increasingly expensive for a "super low-cost travel network") with evermore convenient and efficient search functions (Butt D'Espous et al, 2018).…”